India joins lithium hunt to break dependence on China

Virtually every nation is scrambling to secure rare-earth elements amid growing geopolitical tensions. And India is no different

Last year on December 18, Meenakshi Lekhi, Minister of State for External Affairs, drove to the Embassy of Argentina in New Delhi to have a bit of fun.

She joined Ambassador Hugo Javier Gobbi to cheer for Lionel Messi’s team playing against France at the 2022 FIFA World Cup final in Qatar. In doing so, she was not only making herself part of the blue-white euphoria, but also celebrating what has been a significant year in India’s relations with the South American nation.

External Affairs Minister S Jaishankar hosted Argentine Foreign Minister Santiego Cafiero in New Delhi in April. Prime Minister Narendra Modi had his first meeting with Argentinian President Alberto Fernandez on the sideline of the G7 summit at Munich in Germany in June. Jaishankar’s visit to Buenos Aires on August 26 on an invitation from Cafiero saw a Memorandum of Understanding (MoU) being signed for bilateral cooperation in the field of mineral resources.

This was followed up with India sending a team of geologists to Argentina in November for evaluating and assessing lithium exploration projects proposed by CAMYEN, a state-owned mining company at Catamarca province of the Latin American country. And, around the time Modi congratulated Fernandez for Argentina’s victory against France at the final of the World Cup, Khanij Bidesh India Limited (KABIL), formally expressed interest to partner with CAMYEN for prospecting two lithium mines at La Aguada and El Indio in the northwestern region of the country.

Also read | India eyes overseas copper, lithium mines to meet domestic shortfall

Not only Argentina, India is also eyeing lithium reserves in Chile and Bolivia. The Andean Plains straddling Argentina, Chile and Bolivia – collectively called ‘Lithium Triangle’ – have about 56 per cent of the world’s total identified reserve of 89 million tonnes of the critical mineral, which is required for manufacturing batteries for electric vehicles and electronic devices, in addition to uses in defence and nuclear technologies.

Argentina has about 19 million tonnes of identified lithium reserves. Chile and Bolivia have 9.8 million tonnes and 21 million tonnes of identified reserves.

New Delhi sent two teams of officials to Bolivia in 2019. Though the Covid-19 pandemic resulted in a hiatus in contacts between the two nations over the past three years, Lekhi is set to travel to La Paz next week and is expected to convey New Delhi’s renewed interests in entering into partnership with the Bolivian Government in exploring and extracting lithium.

India’s engagement with Chile for lithium exploration reached an advanced stage. Chile’s state-owned mineral company, ENAMI, sent a draft non-disclosure agreement, but the KABIL suggested certain modifications in it. The agreement will clear the way for talks on a deal for jointly taking up lithium mining projects.

Australia, which has 7.3 million tonnes of lithium and 1.4 million tonnes of cobalt reserves, is another country India is eyeing for cooperation in exploration of the critical minerals. The MoU between KABIL and the Critical Mineral Office (CMO), Department of Industry, Science and Resources (DISER) of the Government of Australia, with detailed collaborative framework was signed on March 10 last year.

The MoU set the stage for India’s participation in joint due diligence and joint investment in Lithium and Cobalt mineral assets of Australia. The two entities have finalised the procurement methodology for engaging Commercial Advisory Services for identifying Lithium and Cobalt projects and further due diligence of projects in Australia.

China ahead

The Modi government has set the country’s electric mobility target at 30 per cent for private automobiles, 70 per cent for commercial vehicles and 80 per cent for two-wheelers and three-wheelers by 2030. The demand for lithium ion batteries is expected to rise from present level of 3 GWh to 20 GWh by 2026 and to 70 GWh by 2030. This is why it is scouting for lithium reserves around the world.

India, however, still has a long way to catch up with China, which currently contributes 56 per cent of the global supply of Lithium-Ion batteries. It also has to compete with the United States, which has been trying to step up domestic production of batteries to end China's monopoly.

The Tianqi Lithium of China and the IGO Limited of Australia established a $ 1.4 billion joint venture in December 2020 at Kwinana Industrial Area near Perth. It made public production of the first battery-grade lithium hydroxide of Australia in May 2022. Almost 97 per cent of Australia’s lithium exports went to China in 2022. China was also the destination of over 42 per cent of lithium from Argentina in 2021.