KABIL AND LITHIUM BLOCKS IN ARGENTINA - ECONOMY

News: India acquires five lithium blocks in Argentina

 

What's in the news?

       In a significant development, India is poised to secure exploration and development rights for five lithium blocks in Argentina, marking its second international foray into critical minerals after a partnership with Australia in 2022.

 

Key takeaways:

       India has taken a crucial step towards reducing its ₹24,000 crore lithium import dependency, primarily sourced from China. The deal was finalized between Khanij Bidesh India Ltd. (KABIL) and Catamarca Minera Y Energética Sociedad Del Estado (CAMYEN), an Argentine state-owned mining and energy company.

       This is the first-ever lithium exploration and mining project undertaken by a government company in India.

 

Argentina’s Lithium Reserves:

       Argentina, holding 21% of the world’s lithium reserves concentrated in the Lithium Triangle, is a key partner for India.

       The salt-lake lithium extraction method employed in Argentina proves economically favourable, contributing significantly to production.

 

Significance of the Deal:

1. Strategic Importance:

       This acquisition aligns with India’s pursuit of self-sufficiency in meeting clean energy demands, especially for electric vehicles.

       The exploration and development agreement is a crucial step towards achieving India’s goal of becoming a manufacturing hub for electric vehicles by 2070.

2. Reducing Import Dependency:

       India’s lithium requirements, valued at around ₹24,000 crore, are primarily met through imports, with a significant portion originating from China.

3. Unlocking Technical Expertise:

       The Union Minister for Mines, highlights that this initiative not only addresses India’s lithium sourcing needs but also brings valuable technical and operational experience in brine-type lithium exploration, exploitation and extraction.

 

Go back to basics:

Lithium:

       Lithium is a non-ferrous metal and is one of the key components in EV batteries.

       It has the symbol Li and is a chemical element.

       It’s a silvery-white metal with a delicate texture.

       It is the lightest metal and the lightest solid element under normal circumstances.

       It must be kept in mineral oil since it is very reactive and combustible.

       It is both an alkali and a rare metal.

 

Significance:

       Lithium, often called ‘white gold’, forms the cornerstone of the country’s transition to green energy options.

       It is used across various categories, including energy storage solutions, batteries for mobile phones and in EVs.

 

India’s Lithium Reserves:

       India has recently discovered 5.9 million tonnes of lithium reserves in Jammu & Kashmir and ranks seventh globally.

       The primary lithium reserve in India has been discovered in the Salal-Haimana area of Reasi District in Jammu and Kashmir, with additional smaller reserves identified in Karnataka.

       Presently, India fulfils its entire lithium demand through imports.

       In the fiscal year 2023, there was a notable increase in lithium imports in India, reaching approximately $3 Billion (around ₹24,900 crore), indicating a 58% growth compared to the figures in FY22.

       More than 95% of India's lithium imports are sourced from China and Hong Kong.

 

Global Reserves of Lithium:

Approximately half of the world's lithium resources are concentrated in Latin America, primarily in countries such as Bolivia, Argentina and Chile along with significant deposits in USA, Australia and China.

       Bolivia has the highest identified lithium resources in the world with 20 million tonnes, as per the US Geological Survey data.

       Argentina has the second-largest lithium reserve estimated to be close to 20 million tonnes.

       Argentina is a key participant in the 'Lithium Triangle', alongside Chile and Bolivia.

       The United States follows Argentina with 12 million tonnes of lithium reserves.

       Chile ranks fourth globally with 11 million tonnes of lithium reserves.

       Australia occupies the fifth spot with 7.9 million tonnes of lithium reserves, according to the available data.

       China, the largest country in Asia, ranks sixth globally with 6.8 million tonnes of lithium reserves. China, without having the largest lithium reserves, continues to dominate lithium mining and processing in the world.

 

Lithium Triangle:

       The Lithium Triangle is a region of the Andes that is rich in lithium reserves, encompassed by the borders of Argentina, Bolivia and Chile.

       The lithium in the triangle is concentrated in various salt pans that exist along the Atacama Desert and neighbouring arid areas, the largest areas of three main salt pants that define its vertex.

 

Khanij Bidesh India Ltd (KABIL):

       KABIL is a joint venture between National Aluminium Company (NALCO), Mineral Exploration Corporation Ltd (MECL) and Hindustan Copper Ltd (HCL).

 

Ministry Oversight:

       Under the purview of the Ministry of Mines, KABIL’s equity participation is distributed in the ratio of 40:30:30 among NALCO, HCL and MECL respectively.

 

Mission:

       KABIL’s core mission is to ensure India’s mineral security and achieve self-reliance in critical and strategic minerals.

       It identifies and acquires overseas mineral assets like lithium and cobalt.

 

Objective:

       It carries out identification, acquisition, exploration, development, mining and processing of strategic minerals foreign places for business use and meeting the country’s requirement of these minerals.

       It has been concentrating on securing copper, cobalt and lithium and in some cases nickel supplies among the critical minerals identified.

 

Global Partnerships:

       KABIL fosters partnerships with mineral-rich countries worldwide, such as Australia, Africa and South America, leveraging India’s expertise in exploration and mineral processing to create mutually beneficial economic opportunities.