LITHIUM DEAL - ECONOMY

News: India closing in on lithium-deal with Argentina, tapping Australia and Chile too

 

What's in the news?

       The Mines Ministry, through the state-owned Khanij Bidesh India Ltd (KABIL), has entered into a draft exploration and development agreement with Argentinan miner CAMYEN for possible acquisition and development of five-odd lithium blocks.

       It has also entered into a non-disclosure agreement with Australia and Chile for lithium exploration.

 

Lithium:

       Also known as White gold.

       It is a soft, silvery-white non-ferrous metal.

       It never occurs freely in nature, but only in (usually ionic) compounds, such as pegmatitic minerals, which were once the main source of Lithium.

       Due to its solubility as an ion, it is present in ocean water and is commonly obtained from brines.

       It is one of the key components in rechargeable batteries for mobile phones, laptops, digital cameras and electric vehicles.

       It is also used in some non-rechargeable batteries for things like heart pacemakers, toys and clocks.

 

Lithium reserves: Global

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

       Latin American nations, particularly Chile and Argentina, play a pivotal role in the global lithium supply chain.

       Collectively, they contribute 30–35% of the world's lithium supplies.

       Chile, with 11% of global lithium reserves, alone supplies 26% of the global requirements.

       Argentina, with nearly one-fifth of the global resources, contributes about 6%.

       With estimates of 21 million tonnes, Bolivia holds aboutone-quarterr of the entire global resource – including the world’s single-biggest lithium deposit, the Salar de Uyuni salt flat, which is visible from space.

       Argentina has the world’s second-largest lithium reserves, totalling around 17 million tonnes.

       The Salar del Hombre Muerto salt flat is a notable lithium resource in Argentina, where the solar evaporation of brine pools is the technique used to extract it.

       Although the US has the world’s fourth-largest lithium reserves, measured at 6.8 million tonnes according to the US Geological Survey, production activity in the country is minimal.

       Australia may only rank fifth on the list of largest overall reserves with 6.3 million tonnes, but it was by far the world’s biggest lithium producer in 2019.

       China is sixth-placed on the list, with overall lithium reserves estimated at 4.5 million tonnes. In 2019, the country produced 7,500 tonnes of the metal – the third-highest level worldwide.

 

Recent Lithium reserves findings in India:

       In February 2023, the Geological Survey of India (GSI) established lithium-inferred resources of 5.9 million tonnes in the Salal-Haimana area of the Reasi district in Jammu and Kashmir (J&K).

       After Jammu and Kashmir, lithium reserves have been traced in Rajasthan's Degana.

       Officials have even alleged that the quantity of lithium here can meet around 80% of India's demand.

       November 18, 2023, Director General of Geological Survey of India (GSI) said that reserves of the mineral 'lithium', which is called the treasure of the future, have been found in Koderma district, Jharkhand.

 

KHANIJ BIDESH INDIA LTD. (KABIL):

       A joint venture company namely Khanij Bidesh India Ltd. (KABIL) is to be set up with the participation of three Central Public Sector Enterprises namely, National Aluminium Company Ltd. (NALCO), Hindustan Copper Ltd. (HCL) and Mineral Exploration Company Ltd. (MECL).

       The objective of constituting KABIL is to ensure a consistent supply of critical and strategic minerals to the Indian domestic market.

       While KABIL would ensure mineral security of the Nation, it would also help in realizing the overall objective of import substitution.

       The equity participation between NALCO, HCL and MECL is in the ratio of 40:30:30

 

Why does India push for Lithium resources?

       Critical minerals: India's increased focus on critical minerals, including lithium, is driven by its commitment to green energy and reducing carbon footprints.

       Import substitution: Known as 'white gold,' lithium is a cornerstone in India's transition to green energy, with applications ranging from EVs to lithium-ion battery production. In order to avoid import and save huge import bills, India shows interest in lithium reserves around the globe through KABIL.

       Strategic importance: Owning resources like Lithium, which is critical for the economy, is imperative for ensuring a secure, resilient supply chain.