Rare Earth Exchanges

The Mineral Security Partnership: Why was this Network Launched in 2022?

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Highlights

  • The Mineral Security Partnership (MSP) is an international initiative launched in 2022.
  • Its goal is to secure and strengthen global supply chains for critical minerals essential for clean energy and advanced technologies.
  • Key objectives of the MSP include:
    • Ensuring resilient and diversified supply chains
    • Promoting sustainable mining practices
    • Fostering collaboration between governments and private sectors
  • The partnership includes Western nations.
  • Aims to address challenges such as:
    • Geopolitical risks
    • Supply shortages
    • Environmental concerns in critical mineral production

 An international initiative aimed at securing and strengthening the global supply chains for critical minerals essential for the clean energy transition, advanced technologies, and economic security, the Mineral Security Partnership (opens in a new tab) (MSP) was launched June 2022. Seeking to address growing concerns over the supply and availability of critical minerals such as lithium, cobalt, nickel, copper, and rare earth elements, which are vital for producing batteries, electric vehicles (EVs), renewable energy systems, and other clean technologies.  The MSP is not directly financed by any single country but is instead a multinational initiative involving several key member countries. However as Rare Earth Exchanges has reported,  the United States has taken a leading role in launching and coordinating the partnership. It’s not an accident that the U.S. Department of State led the MSP announcement, with the aim of ensuring secure and resilient supply chains for critical minerals essential for clean energy technologies.

Drives for Cooperation, among a Competitive Ecosystem

The stakes could not be bigger given the strategic importance of rare earth elements and metals.   For example, critical minerals like lithium, cobalt, nickel, and rare earth elements are essential for:

  • Electric vehicle batteries
  • Wind turbines and solar panels
  • Energy storage systems
  • High-tech electronics (smartphones, laptops, etc.)
  • Military and defense technologies

As the world transitions to a low-carbon economy, the demand for these minerals is expected to increase significantly. For example, the shift to electric vehicles alone could require vast quantities of lithium, cobalt, and nickel for batteries.

The MSP involves public and private sector investment, with participating countries providing support through government programs, policy initiatives, and encouraging private investments in critical mineral projects. For example, some member countries have government-backed financing or investment bodies (such as Export Credit Agencies (ECAs) or development finance institutions) that might offer support to projects aligned with the MSP's goals.

Member countries, particularly those with major technology and resource sectors, contribute to the partnership through policy frameworks, strategic guidance, and promoting international cooperation to secure and diversify critical mineral supply chain

What are some key objectives of the MSP?

The MSP is driven by several critical objectives, a sampling of which are included below.

First and foremost, the partnership focuses on ensuring that the global supply chains for critical minerals are resilient, sustainable, and diversified. Many of these minerals are concentrated in a few countries, raising concerns about potential supply disruptions and monopolistic practices, particularly in the context of the global energy transition.

By promoting international cooperation, the MSP aims to reduce the risk of geopolitical tensions affecting the supply of critical minerals, which are essential for the development of new energy technologies.

Also, the MSP promotes sustainable mining practices  Meaning a central goal of the MSP is to ensure that the extraction, processing, and recycling of critical minerals are done in a way that minimizes environmental damage, promotes human rights, and adheres to high ethical standards.

The MSP encourages the development of clean mining technologies and more sustainable mining operations, particularly in regions with significant mineral reserves.

Another key aim is the diversification of supply sources.  To reduce dependence on any single country or region for critical minerals, the MSP seeks to diversify the locations from which these minerals are sourced. Many critical minerals are currently mined and processed in a small number of countries, creating vulnerabilities in the supply chain.

Diversification efforts include encouraging investment in new mining projects in underexplored or emerging markets, particularly in regions with untapped mineral resources.

The unfolding partnership promotes collaboration between governments, private industry, and financial institutions to build the necessary infrastructure and technologies for critical mineral extraction and processing. This includes sharing knowledge and expertise, as well as coordinating investment in mining and processing facilities.

By involving both the public and private sectors, the partnership aims to create a more stable and competitive global market for critical minerals.

Participating Countries

Not surprisingly the nation that controls anywhere from 80% to 90% of rare earth refining market share, the People’s Republic of China, is not included in the MSP. Yet studies Rare Earth Exchanges have reviewed from a Chinese point of view suggest the vital need for seamless integrated global partnerships for the country to maintain its rare earth security.

As of its launch, the MSP includes several key nations with a strategic interest in securing critical mineral supplies. Initial members include countries like:

  • United States
  • Canada
  • Australia
  • Japan
  • South Korea
  • Germany
  • United Kingdom
  • European Union (EU) members

These countries have large technology and manufacturing sectors, which rely heavily on a stable supply of critical minerals to produce batteries, EVs, wind turbines, and other green technologies.  See the link (opens in a new tab) to review all the members.

What kinds of challenges are addressed by the MSP?

This Western-centric alliance clearly was launched in 2022 to, among other agendas, overcome China’s stranglehold on the rare earth element value chain. Key areas of concern range from geopolitical Risks, meaning a significant portion of the world’s critical minerals is mined or processed in a few countries. For example, China dominates the production and processing of rare earth elements and cobalt refining, while the Democratic Republic of Congo (DRC) supplies over 70% of the world’s cobalt. This concentration poses risks to global supply chains.

But supply shortages also imply a need for cooperation.  The rapid growth in demand for critical minerals, driven by green energy technologies and global decarbonization goals, could lead to supply shortages unless new sources are developed, and existing supply chains are made more resilient.

Environmental and Social Concerns of mining operations for example, especially in developing countries, can lead to significant environmental degradation and social issues. The MSP aims to promote responsible and ethical sourcing of minerals to address these concerns.

Final Thoughts?

The Mineral Security Partnership is a strategic international effort to secure the global supply of critical minerals, ensuring the availability of the raw materials needed for clean energy technologies and advanced manufacturing. Clearly this network of partnerships Is meant to bolster a critical supply chain outside of China. By fostering collaboration, diversifying supply chains, and promoting sustainable mining practices, the MSP aims to mitigate the risks associated with the growing demand for these essential minerals.

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