India has officially joined the US-led Minerals Security Finance Network (MSFN) during the United Nations General Assembly on September 23, 2024. The MSFN is an international initiative that aims to improve cooperation between countries to secure critical mineral supply chains. The network includes 14 countries, along with the European Union, and focuses on building resilient and sustainable access to key minerals for clean energy technologies.
What is the Minerals Security Finance Network (MSFN)?
The MSFN stems from the US’s Minerals Security Partnership (MSP), created in 2022, which India joined in June 2023. The primary goal of the MSFN is to ensure a steady and secure supply of essential minerals, such as lithium, cobalt, and rare earth elements, which are vital for green energy projects like electric vehicles and solar panels. The network promotes cooperation among public and private sectors to build stronger supply chains, especially in light of China’s dominance in mineral production and processing.
| Country Members of MSFN |
| USA |
| Australia |
| Canada |
| Estonia |
| Finland |
| France |
| Germany |
| India |
| Italy |
| Japan |
| Republic of Korea |
| Norway |
| Sweden |
| United Kingdom |
| European Union |
Why is the MSFN Important?
The MSFN plays a vital role in helping countries diversify their supply chains for critical minerals. Currently, China dominates global production and processing of rare earth minerals, which creates strategic risks for many countries. By working together, member countries can secure more reliable and sustainable mineral sources from nations like Argentina, Chile, and Australia, thereby reducing dependency on a single supplier.
China’s Dominance in Mineral Supply Chains
China controls 60% of global rare earth and critical mineral production and processes 80% of these minerals. This monopoly leaves countries like India, the US, Japan, and the EU vulnerable, as they rely on China for their energy and technology sectors. In recent years, China has also used its position to restrict the export of critical minerals, such as antimony and gallium, as part of its strategic countermeasures.
India’s Role in the MSFN
India’s involvement in the MSFN is crucial for reducing its dependence on Chinese minerals, particularly in the context of its growing demand for lithium, nickel, cobalt, and copper. In 2023, India spent approximately ₹34,000 crore on importing these critical minerals. By participating in this network, India aims to establish a self-sufficient supply chain for clean energy technologies and reduce its vulnerability.
Impact of MSFN on India and Global Relations
The MSFN is expected to strengthen India’s position in global mineral markets and reduce its reliance on China. This will help India in advancing its green energy projects and boost its economic growth. Globally, the MSFN can create more diversified supply chains, making it easier for countries to transition to clean energy while reducing geopolitical risks.
Key Aims of MSFN
- Sustainable Mineral Supply Chains: Ensuring reliable access to critical minerals for clean energy.
- Reducing Dependence on China: Encouraging collaboration among member nations to diversify supply chains.
- Promoting Responsible Mining: Upholding high environmental and social standards for mineral extraction.
News Summary-
- India joined the US-led MSFN to secure its critical mineral supply.
- The Minerals Security Finance Network focuses on minerals essential for clean energy technologies like lithium, cobalt, and rare earth elements.
- China currently controls 60% of the global supply of rare earth minerals, making other countries vulnerable.
- MSFN encourages cooperation between member nations to build resilient and sustainable supply chains.
Also Read Latest Current Affairs 2024
The Minerals Security Finance Networkis a US-led initiative aimed at enhancing cooperation among countries to secure supply chains for critical minerals needed for clean energy and technology.
India joined the Minerals Security Finance Network to reduce its reliance on China for critical minerals and secure a sustainable supply for its green energy initiatives.
Critical minerals like lithium, cobalt, and rare earth elements are essential for clean energy technologies such as electric vehicles, solar panels, and wind turbines.
China controls 60% of rare earth mineral production and processes 80% of these minerals, giving it significant power over global supply chains.
Along with India, countries like the USA, Australia, Canada, Japan, and several European nations are members of the MSFN.
