India is stepping on the gas to secure lithium blocks in Australia as it aims to finalise a deal “likely within this fiscal year” through state-owned Khanij Bidesh India Ltd (KABIL). Government officials are reportedly pushing KABIL to accelerate the process and secure “at least one more acquisition” for the critical resource before the fiscal ends.

Discussions are reportedly under way for two lithium blocks and three cobalt blocks.

The process of finalising a new consultant to conduct due diligence is in the last stages.

The due diligence process will involve evaluating potential exploration sites and assessing the likelihood of significant lithium deposits.

Shifting gears

The previous consultant, PWC, was reportedly replaced, causing a six-eight month step-back. However, a new firm, E&Y Australia, is expected to be appointed “within the next few weeks.”

“There was a delay due to the change in consultant, but we’re catching up,” VL Kantha Rao, Mines Secretary, told businessline. “We’re targeting acquisition of lithium blocks in Australia by the end of this fiscal year, again by KABIL.”

KABIL is a joint venture of Hindustan Copper, MECL and NALCO.

MoU with Australia

In 2023, India and Australia announced that detailed due diligence would be carried out for target mineral blocks.

India’s KABIL and Australia’s Critical Mineral Office (CMO) have an MoU to jointly fund project identification and to support potential investments by India in Australian critical minerals projects. KABIL and the CMO have also committed $3 million each for joint due diligence.

“Acquisitions in Australia will be slightly costlier than in Argentina, and financial requirements and details are being worked out – through KABIL – by the Ministry,” Rao said.

Securing lithium

This fast-tracked effort underscores India’s urgency to secure a critical resource for its burgeoning electric vehicle industry and reduce its reliance on Chinese imports.

Lithium continues to be the corner-stone of India’s transition to green energy and reduction in its carbon footprint.

Called ‘white gold’, lithium finds extensive usage across energy storage solutions, that include electric vehicles (EVs), car batteries and mobile phones, among others.

Majority of the country’s lithium needs are imported.

According to data available with the Commerce Ministry, in FY23, lithium imports were worth ₹266 crore, up 62 per cent y-o-y; while lithium oxide and hydroxide imports were ₹553 crore, up 156 per cent y-o-y.

Lithium carbonate imports were at ₹179 crore, up 176 per cent, while lithium ion imports stood at over ₹23,000 crore, up 69 per cent, y-o-y.

Argentina acquisition

Earlier this year, India made its first overseas acquisition for five lithium brine blocks, namely Cortadera-I, Cortadera-VII, Cortadera-VIII, Cateo-2022-01810132 and Cortadera-VI, in Argentina. Around Rs 200 crore will be invested in exploration, mining and subsequent offtake of the mineral.

A Request for Proposal (RFP) to appoint a “local partner” in the Latin American nation has been floated.

The laws there mandate that there be an “involvement of local partners” across stages such as exploration and development, and in other processes, too. The local exploration agency will be responsible for obtaining the necessary clearances (and other government-mandated approvals). It will also start drilling activities post these.

“Over the next few weeks we will appoint the local partner. And, ideally, in the next two-three years, production should start,” Rao said.

KABIL will also set up an office with two representatives there.