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India's Modi urges nations with critical minerals to see custodianship as 'global responsibility'

India's PM Modi visits Greece

NEW DELHI (Reuters) - Indian Prime Minister Narendra Modi said there is a risk of a "new model of colonialism" if nations with critical minerals do not regard custodianship as a "global responsibility", as firms race to secure resources central to energy transition goals.

"We are experiencing this challenge for critical materials, rare earths and others. These things are abundant in some places and not present at all in others, but all of humankind needs them," Modi said at a Business 20 summit in New Delhi on Sunday.

"The ones who have them, if they don't see that as a global responsibility, then this will promote a new model of colonialism. This is my warning," Modi said.

The comments come as adequate supplies of minerals critical for the transition to environmentally friendlier energy is far from assured amid challenges such as resources' uneven geographical diversification.

China accounted for 70% of world mine production of rare earths in 2022 and is home to at least 85% of global processing capacity. This year, it imposed export restrictions on gallium and germanium for use in computer chips and other components - a move widely seen as retaliation for U.S. curbs on technology sales to China and which raised concerns over more restrictions.

Speaking to global business executives and industry heads, Modi said India could build an efficient and reliable supply chain, in contrast to the pre-COVID-19 supply chain that "broke down when the world needed it most".

Amid broader efforts to diversify supply chains, the U.S. and India in June announced deals in sectors as varied as chips, minerals, technology, space and defence during Modi's visit to Washington.

(Reporting by Shivangi Acharya; Editing by Christopher Cushing)