Major boost for India’s mineral security as ONGC Videsh, Oil India, and others sign deal with UAE

In a significant move to fortify the global supply chain for critical minerals, Khanij Bidesh India Limited (KABIL), Oil India Limited, and ONGC Videsh Limited have signed a pivotal Memorandum of Understanding with International Resources Holdings RSC Ltd. of the United Arab Emirates. The agreement, which was formalised at the UAE-India Business Forum in Mumbai on 10 September 2024, marks a major step towards enhancing India’s access to essential energy minerals and ensuring stability in the global critical mineral market.

A strategic move to safeguard India’s energy future

The newly signed Memorandum of Understanding between these Indian and UAE-based entities is designed to leverage their combined expertise, resources, and networks. The deal emphasises the identification and acquisition of critical mineral projects on a global scale, including within India, a move seen as crucial to safeguarding the future of India’s energy needs. The entities will collaborate closely in a structured approach, covering joint project identification, comprehensive due diligence, risk management strategies, and the development of a long-term offtake strategy to secure a stable supply of critical minerals.

Oil India Limited, ONGC Videsh Limited, and Khanij Bidesh India Limited bring considerable experience to the table. Oil India Limited is one of the country’s largest public sector undertakings in the energy sector, while ONGC Videsh Limited, a subsidiary of Oil and Natural Gas Corporation, holds 32 assets in 15 countries, making it India’s largest international oil and gas exploration and production company. Khanij Bidesh India Limited, a joint venture between National Aluminium Company Ltd., Hindustan Copper Limited, and Mineral Exploration & Consultancy Limited, focuses on acquiring strategic mineral assets abroad.

An agreement built on mutual benefit

The strategic agreement with International Resources Holdings is set to focus on cooperative and coordinated efforts in identifying and developing critical mineral projects. These efforts will involve joint due diligence and creating robust risk management frameworks to minimise uncertainties in the supply chain. By fostering collaboration on the identification, acquisition, and development of these projects, the entities aim to reduce India’s dependence on foreign mineral imports and enhance its energy security.

Sadashiv Samantaray, CEO of Khanij Bidesh India Limited and Director (Commercial) of National Aluminium Company Ltd., remarked that this collaboration marks a critical milestone in India’s efforts to strengthen the global critical mineral supply chain. He emphasised that this move aligns with India’s goal of becoming self-reliant in its energy needs, a sentiment echoed by other stakeholders at the forum.

Implications for India’s energy independence

India’s growing energy demands make the secure supply of critical minerals increasingly vital. By signing this Memorandum of Understanding with International Resources Holdings, India is taking proactive steps to ensure a stable supply of these essential resources. The agreement aims to reduce risks associated with mineral supply chains by diversifying sources and building stronger, more reliable networks. It also underscores the importance of international cooperation in addressing global supply chain vulnerabilities, especially in sectors as critical as energy.

Experts suggest that the collaboration could lead to new exploration and production projects in regions rich in critical minerals, such as Africa, Central Asia, and Latin America. These regions are known for their untapped mineral wealth, and partnerships like this could open the doors to more sustainable and responsible mining practices.

Expert opinion: A game-changer for India’s mineral security

Industry experts believe that this strategic alliance could be a game-changer for India. The country has been increasingly focusing on securing its mineral supply chains amid growing geopolitical tensions and shifting global dynamics. The MoU with the UAE’s International Resources Holdings is a step towards mitigating risks and enhancing mineral security.

India’s move to partner with the UAE comes at a critical juncture, with the global energy landscape undergoing rapid changes. This is not just about securing minerals but about ensuring that India has a seat at the table in global energy security discussions. By partnering with a reliable and resource-rich partner like the UAE, India is making a calculated move towards achieving energy autonomy.

India and UAE: Strengthening ties through minerals

The Memorandum of Understanding also highlights the deepening ties between India and the UAE, building on their shared economic and strategic interests. The UAE-India Business Forum, where the MoU was signed, is seen as a significant platform for fostering bilateral relations, particularly in sectors like energy, technology, and infrastructure. Both countries have demonstrated a strong commitment to working together to achieve mutual growth and development.

As global demand for energy resources continues to rise, this partnership could pave the way for more collaborative ventures between India and the UAE, focusing on innovation, sustainability, and operational efficiency.