The Ministry is also collaborating with PSUs like Coal India, NTPC, and others to secure access and acquisition of lithium mines and other critical minerals there, as it looks to become self-reliant and reduce import dependence, sources aware of the discussions told businessline.
India is doing “due diligence” for two lithium mines and three cobalt mines in Australia already.
Due diligence is a process wherein the expected reserves of the block are determined, while also considering whether mining can be carried out commercially or not. Sources said that due diligence is a long-drawn process and may not always lead to actual exploration.
According to an official, the Australian authorities had identified at least five mines of lithium and cobalt for Indian entities, led by state-owned Khanij Bidesh India (KABIL), the joint venture between state-run NALCO, Hindustan Copper and Mineral Exploration Corporation. These mines are a mix of a explored assets and some where reserves have been determined, which has led to “due diligence” being carried out.
Australia produces almost half of the world’s lithium, is the second-largest producer of cobalt and the fourth-largest producer of rare earth elements.
India’s lithium find
India has so far put up two lithium blocks on an auction which include one in J&K with reserves to the tune of 5.9 mt, and another in Chhattisgarh wheee reserves are yet to be determined.
Most of India’s lithium requirements are met through imports, primarily China, with the bill running into ₹24,000 crore annually.
Lithium, a white alkali material, is a key requirement in energy storage solutions and is used across batteries in electric vehicles, and mobile phones, among others. It forms the cornerstone of India’s transition to green energy options and of bringing down carbon footprint.
India and some other countries, including the EU, has been trying to push for parity in the global supply of critical mineral including lithium. Most of the sector is dominated by China (primarily in mining and processing segments).
Various studies suggest that in 2030, the global demand for lithium is expected to surpass 2.4 million tonnes of lithium carbonate equivalent, doubling the demand forecast for 2025. Increases in battery demand for electric vehicles will be a strong driver of lithium consumption in the next decade, with demand expected to reach 3.8 million tons by 2035.
Increased demand for EVs here will lead to a lithium-ion battery demand escalation of 250 GWh in the coming decade (FY33). The report by Axis Capital mentioned at 75 average utilization, this will boost a capacity addition of approximately 330 GWh by FY33.
“While due diligence is on across the five blocks in Australia, we have also reached out to the government there so as to get across to more mines, which could be either explored, partly explored or with declared reserves. Apart from KABIL, we are also looking to push for acquisitions or partnerships through state-owned entities like Coal India, NTPC and others,” the official said.
MoU in Australia
Earlier in March 2022, KABIL had signed an MoU with the Critical Mineral Office (CMO) under the Australian government’s Department of Industry, Science and Resources.
This agreement, with a detailed collaborative framework, was signed to conduct joint due diligence and a joint investment in Australia’s Li & Co mineral assets.
Under the MoU, Australia and India planned to initially provide around $6 million of funds for an associated due diligence process. The due diligence process was to be initially funded in a 50:50 ratio.
Australia, however, has a fund of its own that is being used to push mining start ups and to look at prospective lithium, cobalt and rare earth element reserves. India’s mines ministry is also planning a similar fund that would help R&D, push mining start-ups, facilitate studies, among others.
“The lithium mining scene in Australia is quite hot at the moment; and we would want India and Indian companies to come in and invest there,” an Australian government functionary had said recently.