India and Australia eye stronger ties in critical minerals field

Subject : Geography

Section: Economic geography

Concept :

Minister of Commerce and Industry Piyush Goyal and his Australian counterpart Don Farrell announced the formal resumption of negotiation for the Comprehensive Economic Cooperation Agreement (CECA) which will cover a “much wider” area of commercial cooperation.
Ministers from the two countries have also agreed to deepen cooperation and extend their existing commitments to the India-Australia Critical Minerals Investment Partnership.
Australia confirmed that it would commit USD 5.8 million to the three-year India-Australia Critical Minerals Investment Partnership.

Critical Minerals

Critical minerals are elements that are the building blocks of essential modern-day technologies, and are at risk of supply chain disruptions.
These minerals are used everywhere from making mobile phones, computers to batteries, electric vehicles and green technologies like solar panels and wind turbines.
It mostly includes graphite, lithium and cobalt, which are used for making EV batteries; rare earths that are used for making magnets and silicon which is a key mineral for making computer chips and solar panels.

Why is this resource critical?

As countries around the world scale up their transition towards clean energy and digital economy, these critical resources are key to the ecosystem that fuels this change.
Any supply shock can severely imperil the economy and strategic autonomy of a country over-dependent on others to procure critical minerals.
But these supply risks exist due to rare availability, growing demand and complex processing value chain.
Many times, the complex supply chain can be disrupted by hostile regimes, or due to politically unstable regions.