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NEW DELHI : In a massive boost to its efforts to secure critical mineral supplies, India has been approached by several African countries with offers to service part of their development loans by giving access to Indian companies in their mining operations and allowing exports of highly prized lithium and cobalt.

This is part of India’s plans to leverage over-$30 billion of lines of credit (LoC) and financial support it has extended to African, Latin American and Asian countries, two officials aware of the development said.

The approach by the Africans— made to the economic diplomacy division of the ministry of external affairs— is the first such instance of an economic trade-off leveraged by India, one of the officials said.

According to this government official, the government has asked domestic metal and mining companies to place their interest in raw materials and other minerals that they require for manufacturing so that these could be sourced from countries where Indian lines of credit have been extended.

“In all, over 300 LoCs worth $32 billion have been extended by India to 65 countries across the globe. The LoC projects cover infrastructure, power generation, irrigation, healthcare and capacity building. Until now, 322 LoC projects have been completed, and 277 are under implementation," said the official quoted above.

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LoCs are extended through the Exim Bank of India, and each LoC can have several projects under it.

“With Africa, India has extended LoCs to over 41 countries worth more than $12 billion. It is here (with Africa) that the first set of mineral deals would be worked as part of the debt-servicing obligation of beneficiary countries."

Questions sent to ministries of external affairs, finance, mines and coal remain unanswered. Similarly, the department of financial services, EXIM Bank, did not respond to a query about the proposed change in servicing norms of LoC by beneficiary countries.

India extends development assistance through concessional LoC under the Indian Development and Economic Assistance Scheme (IDEAS). Under it, India extends concessional funds to overseas financial institutions, regional development banks, governments and other entities to help finance development and infrastructure projects or to import goods and services from India—all on deferred credit terms.

“Several countries have offered to repay Exim Bank credit through output generated by a certain project or other minerals that India needs to support Make in India and Atmanirbhar Bharat initiatives," said the official.

Africa has rich deposits of oil, gas and lithium, which has become the most sought-after mineral by countries building their electric mobility infrastructure using lithium-ion batteries. The LoC deal with African countries could give India access to mineral and metal ores such as magnesium ore, nickel ore, zinc, lead, quartz, limestone, alumina, iron ore, copper and bauxite.

Apart from African countries, India would also explore the reworked LoC arrangement with Central Asian countries, Bolivia and Russia. India has extended a $1 billion LoCs to Russia in 2020 that can now be explored to get critical coking coal supplies for Indian steel companies.

India’s financial assistance is also channelled to neighbouring countries through LoCs, grant-in-aid, credit and currency swaps. Most recently, New Delhi has extended various economic support measures to help Sri Lanka tide over its ongoing financial crisis.

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