India should take advantage of rare earth minerals from southern Africa: Exim Bank

India must form strategic alliances with southern African countries where critical rare earth minerals are produced, as the world looks to the continent to meet ever-growing demand, an India report has suggested. Exim Bank.

The report, titled ‘Reinvigorating India’s Engagements with Southern Africa’, was released in Johannesburg this week as part of the CII-Exim Bank Regional Conclave on the India-Southern Africa Growth Partnership.

India’s Development Finance Institutions and the African Development Bank should work closely with the governments of Southern African countries to understand the needs of these commercial attempts to develop Rare Earth Elements (REEs) and help businesses to develop the end-to-end value chain, the report says.

The region is rich in lithium, graphite, cobalt, nickel, copper and other rare earth minerals.

All of these are critical to building the global green economy of tomorrow and they also provide new market opportunities for transitions to net zero. Thus, India could play an important role in the African mining value chain to maximize demand benefits from the battery and power value chain, he said.

The report also suggested that India could benefit in its own evolution towards a greener economy.

India could set up joint exploration activities to secure critical mining assets. Indian state-owned companies can form a joint venture to secure minor mining assets such as lithium and cobalt that could fuel India’s plan for mass adoption of electric vehicles by 2030.

Strategic investment funds or import credit lines could be established with the respective countries by signing MoUs to secure India’s cobalt and lithium import requirements, according to the report.

REEs have unique physical and chemical properties that make them indispensable in the manufacture of high-tech products and have led them to be classified as critical metals.

Countries like South Africa, Madagascar, Malawi, Namibia, Mozambique, Tanzania, and Zambia have significant amounts of neodymium, praseodymium, and dysprosium. Although relatively abundant, these elements are less exploitable than common ores.

They can have direct technical applications or be used to aid in the production and refinement of common high-tech products. Access to a steady supply of rare earth elements is critical to the national security and economic viability of many countries around the world, the report says, adding that the global REE market is largely controlled by China.

However, other large consumers are keen to establish alternative supply chains to ensure reliable and consistent supply at predictable prices. Africa has the potential mineral resources to compete on the world stage. However, the development of mineral resources must be supported by business models that allow maximum benefit to the country or region.

Major REE consumers like the US, EU, Canada, Australia, Japan and South Korea are exploring options to develop alternative REE supply chains. Africa is one of the regions targeted as an alternative source of REE raw materials, which provides opportunities for African countries to develop their own REE value chains, he said.

The report says that with India and SADC sharing strong and deep cooperative ties, this was one of the ways in which they could forge mutually beneficial collaborations.

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