Daily Current Affairs : 26-September-2024

India has officially joined the Minerals Security Finance Network (MSFN), a global initiative spearheaded by the United States. This move is significant for India’s growing demand for critical minerals, which are essential for industries like clean energy, electronics, and electric vehicles (EVs).

About the Minerals Security Finance Network (MSFN)

The MSFN is part of the larger Minerals Security Partnership (MSP), created to secure the global supply chains of critical minerals. These minerals, such as lithium, cobalt, nickel, and rare earth elements, are essential for manufacturing advanced technologies, including electric vehicles (EVs) and smartphones. The primary goal of the MSFN is to reduce global dependency on China, which currently controls a large portion of the global supply of these vital minerals.

Key Objectives of MSFN

  • Strengthening Global Cooperation: The MSFN aims to bring together Development Finance Institutions (DFIs) and Export Credit Agencies (ECAs) from member countries. These bodies will work together to fund and support critical mineral projects around the world.
  • Reducing Dependency on China: China controls around 70% of the global rare earth production and has an advanced infrastructure for processing minerals like cobalt, which is largely sourced from Africa. MSFN aims to reduce this dependency by creating alternative supply routes and sources.
  • Public-Private Collaboration: The initiative also focuses on promoting cooperation between governments and private companies to ensure a stable and diversified supply of these critical minerals.

India’s Role in the MSFN

India’s inclusion in the MSFN aligns with its push for clean energy, electric vehicles (EVs), and electronics manufacturing. As India looks to build a strong electric vehicle market and expand its semiconductor industry, securing a reliable supply of critical minerals is crucial. By joining MSFN, India ensures that it has access to the minerals needed for the future of its technology-driven economy.

Important Points:

India joins the Minerals Security Finance Network (MSFN), a US-led initiative aimed at securing supply chains for critical minerals.MSFN is part of the larger Minerals Security Partnership (MSP), focused on reducing dependency on China for key minerals.Critical minerals such as lithium, cobalt, nickel, and rare earth elements are vital for technologies like electric vehicles (EVs) and electronics.China’s dominance: China controls about 70% of global rare earth production and has extensive processing infrastructure, especially for minerals sourced from Africa.Key Objectives of MSFN:

  • Unites Development Finance Institutions (DFIs) and Export Credit Agencies (ECAs) to fund critical mineral projects.
  • Aims to reduce global reliance on China for mineral supply.
  • Promotes public-private cooperation to meet global mineral demands.

India’s role: India’s inclusion supports its EV, electronics, and semiconductor goals, ensuring a steady supply of essential minerals for its technology-driven economy.The MSFN initiative focuses on diversifying mineral sources and building alternative supply chains to enhance global mineral security.

Why In News

India is now formally a part of the Minerals Security Finance Network (MSFN), a US-led initiative aimed at strengthening cooperation among member nations to secure supply chains for critical minerals. This collaboration will play a crucial role in ensuring that India has reliable access to the key minerals needed to fuel its growing industries, such as electric vehicles, electronics, and clean energy technologies.

MCQs about India Joins the Minerals Security Finance Network (MSFN)

  1. What is the main goal of the Minerals Security Finance Network (MSFN)?
    A. To reduce global carbon emissions
    B. To secure supply chains for critical minerals
    C. To increase global mineral production
    D. To promote international trade in electronics
    Correct Answer: B. To secure supply chains for critical minerals
    Explanation: The main goal of the MSFN is to strengthen cooperation among member countries to secure the global supply chains for critical minerals such as lithium, cobalt, and rare earth elements, which are essential for clean energy and electronics industries.
  2. Which country currently controls approximately 70% of global rare earth production?
    A. India
    B. United States
    C. China
    D. Brazil
    Correct Answer: C. China
    Explanation: China currently controls about 70% of global rare earth production and has a well-established infrastructure for processing minerals, especially those sourced from Africa, making it a dominant player in the global minerals market.
  3. How does India’s inclusion in the MSFN align with its economic goals?
    A. It helps India increase its agricultural exports.
    B. It supports India’s push for clean energy, electric vehicles (EVs), and electronics manufacturing.
    C. It reduces India’s dependency on foreign technology.
    D. It improves India’s relationship with China.
    Correct Answer: B. It supports India’s push for clean energy, electric vehicles (EVs), and electronics manufacturing.
    Explanation: India’s participation in the MSFN ensures a steady supply of critical minerals needed for its expanding clean energy sector, electric vehicle market, and semiconductor industry, aligning with its long-term economic and technological goals.
  4. What is one of the key strategies of the MSFN to secure mineral supply chains?
    A. Reducing mineral prices globally
    B. Uniting Development Finance Institutions (DFIs) and Export Credit Agencies (ECAs) to fund critical mineral projects
    C. Building more processing plants in China
    D. Banning mineral exports to non-member countries
    Correct Answer: B. Uniting Development Finance Institutions (DFIs) and Export Credit Agencies (ECAs) to fund critical mineral projects
    Explanation: One of the key strategies of MSFN is to unite DFIs and ECAs from member countries to fund and support critical mineral projects, helping ensure a stable and diversified supply of essential minerals.

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