India to Sign Mining Pact with Mongolia

India to Sign Mining Pact with Mongolia

Sub: Geo

Sec: Eco Geo 

Why in the News?

• India is expected to sign a Memorandum of Understanding (MoU) with Mongolia in the area of geology and exploration. This collaboration aims to tap into Mongolia’s rich deposits of copper and coking coal, which are critical to India’s industrial growth.

Context and Key Points

• Significance of Mongolia’s Resources:
  • Copper and Coking Coal Deposits:
    • Copper is essential for power, construction, and EV industries.
    • Coking coal is vital for steel production, and Mongolia offers superior-grade coal compared to other suppliers.
  • India heavily depends on imports for both resources to meet rising demand.
• Approval of MoU:
  • The Indian government has approved the draft MoU, which is expected to be signed soon.
  • The agreement will foster bilateral ties and enhance India’s access to critical minerals.
• Corporate Interests:
  • Indian companies, including Adani, Hindalco, and Vedanta, have expressed interest in sourcing copper from Mongolia.
  • These firms are exploring opportunities to meet domestic demand through Mongolian resources.
• Preferred Supply Routes:
  • India prefers the Vladivostok (Russia) route for importing resources, despite the longer distance.
  • Avoiding Chinese routes reflects India’s intent to diversify supply chains and reduce reliance on China.

Conclusion

• This agreement represents a significant step towards securing critical resources, bolstering India’s industrial capabilities, and deepening its strategic ties with Mongolia while reducing dependence on traditional suppliers.

Eastern Maritime Corridor (EMC)

The Chennai-Vladivostok Eastern Maritime Corridor (EMC) is a sea trade route that connects Chennai Port in southern India with Vladivostok Port in Russia’s Far East. It passes through the Sea of Japan, the South China Sea, and the Malacca Strait.

It aims to enhance trade and strategic ties between the two countries by offering a direct shipping link through critical maritime regions.