India and Australia are taking their Comprehensive Strategic Partnership to a new level with extensive collaboration to identify opportunities for strategic investment in Australian critical minerals projects.
During the second Virtual Summit between India and Australia on Monday, Prime Minister Narendra Modi and his Australian counterpart, Scott Morrison welcomed the Memorandum of Understanding (MoU) signed between India's Khanij Bidesh India Limited and Australia's Critical Minerals Facilitation Office on March 10.
Through the MoU, Canberra is working with New Delhi to realise the shared ambition of developing robust and commercially viable critical minerals supply chains.
"As you can imagine, this is an important area for both our countries and this agreement would give us the opportunities to both invest in Australia's critical mineral sector and get Australian expertise in this area," said Foreign Secretary Harsh Vardhan Shringla after the summit.
Australia, which has been blessed with extraordinary reserves of the critical minerals, produces around half the world's lithium, is the second-largest producer of cobalt and the fourth-largest producer of rare earths.
It is also working with other partner countries, especially through the Quad, to map the supply chains of critical technologies and materials, such as semiconductors.
(Image courtesy: Government of Western Australia Department of Mines, Industry Regulation and Safety)
Australia's Minister for Resources and Water, Keith Pitt had said at the time of the signing of the MoU that the Morrison government has allocated $5.8 million to the three-year Australia-India Critical Minerals Investment Partnership.
"Australia and India are natural partners sharing mutual strategic and economic priorities and this partnership will support further Indian investment in Australian critical minerals projects," Pitt had said on March 11.
He said that the combined capabilities of both countries will take on the challenge of resourcing the emerging technologies used in sectors such as defence, aerospace, automotive, renewable energy, telecommunications and agritech.
"India is forecast to become the world's most populous country within two years. Its fast-growing economy will create more trade and investment opportunities, so it is important Australia continues to build close ties with India," observed Pitt.
Lithium, incl. other critical minerals, will play a key role in helping meet 🇮🇳’s EV and energy ambitions. This offers significant commercial potential for 🇦🇺 and 🇮🇳 firms. Was pleased to speak on this and WA’s great relationship with 🇮🇳 at the @IndoAustChamber Virtual Summit. pic.twitter.com/ELIVZdfewR
— Barry O’Farrell AO (@AusHCIndia) January 7, 2021
As part of the MOU work plan, the Australian Trade and Investment Commission (Austrade) had commissioned Deloitte Touche Tohmatsu LLP India to prepare a report on India’s current and future demand for critical minerals in India and potential opportunities for cooperation with Australia.
The report released in July 2021 mentioned that India has an ambitious industrial reform agenda to expand manufacturing capability and to transition to a low-carbon and digitised economy.
"This includes plans for rapid expansion of electric mobility and renewable energy generation, as well as enhanced capability across high-technology sectors. These are among the key drivers for India in
seeking to source stable and secure supply of critical minerals and related processing and refining technologies," the Deloitte report mentioned.
It highlighted how critical minerals have diverse applications, from metallurgy and chemical industries to energy storage systems (ESS) for renewable energy, electric mobility, power generation, high-end electronics, aerospace, defence, and data transmission hardware.
The report stated that economic importance of critical minerals for these industries, along with risks to stable supply, make them strategically valuable.
"With our vast quantities of development-ready critical minerals projects and reputation as a reliable trading partner, Australia is a logical choice as India looks to secure its supply chains," said Pitt.
(Image courtesy: Government of Australia)
Both Modi and Morrison also welcomed the extension of the Australia India Strategic Research Fund – an area of collaboration on science, technology and research which has been referred to as "a pillar collaboration" by the two leaders.
India's Foreign Secretary revealed that both Prime Ministers also expressed their commitment to build on the success of the 2021 India Australia Circular Economy Hackathon involving a discussion of the circular economy – converting waste to wealth and joint initiatives on new and renewable energy.
As they agreed to hold annual summits at the level of the Heads of Government under the Comprehensive Strategic Partnership – Australia would be the third country with which India will have an institutionalized annual summit – both leaders also signed a letter of intent to work towards including a Migration and Mobility Partnership agreement on facilitating migration, mobility between the two countries.
Shringla said that the two Prime Ministers also agreed that they would be increasing cooperation between India's National Investment and Infrastructure fund, the NIIF and Australia's Pension and Sovereign Fund, which is called the Future Fund.
"This again is important because of our interest in attracting Australian investments in our infrastructure development. India will offer the same tax benefits for Australia’s sovereign and pension funds in India as is given in Australia. In other words, we are willing to match the tax benefits that Australia gives to its sovereign and pension funds," he said.
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