In a significant move towards achieving its energy transition goals, the Indian government is set to invite bids for 20 critical mineral blocks, including lithium and graphite, within the next two weeks. This initiative aligns with India’s commitment to ensuring domestic resources for the green energy transition and enhancing national security.
Discovery of Lithium Reserves:
India made a groundbreaking discovery in February, identifying its first lithium deposits in Jammu and Kashmir, estimating reserves at 5.9 million tonnes. The subsequent modification of mining rules in July allowed private miners to explore these critical minerals, with reports suggesting that Jammu and Kashmir will auction its lithium reserves in the coming months.
Auction Process and Royalty Rates:
The upcoming auction will include minerals crucial for energy storage, such as lithium and graphite. The Union cabinet has already approved royalty rates, setting them at 3% for lithium, 3% for Niobium, and 1% for Rare Earth Elements (REE). This step emphasizes the government’s focus on securing essential raw materials for the green energy sector.
Global Collaborations and Talks:
To meet the growing demand for lithium, India has been engaging in talks with key players in the global market. Negotiations with Chile, Bolivia, and Argentina aim to tap into their lithium resources. India is exploring downstream tie-ups with Bolivia, facilitating Indian companies to invest in EV battery-making and processing setups in the South American nation.
Strategic Initiatives by Government-Controlled Enterprises:
Prominent state-owned enterprises, including Coal India Ltd. and NTPC Ltd., are gearing up to venture into the mining sector, emphasizing the strategic importance of securing essential materials for the energy transition. Additionally, the formation of Khanij Bidesh India Ltd. in 2019, a joint venture involving three government-owned companies, highlights India’s commitment to securing critical mineral assets globally, with a primary focus on Australia and South America.
Import Statistics and Economic Impact:
Highlighting the urgency of domestic resource development, India imported lithium worth Rs 23,171 crore in FY23, a significant increase from Rs 13,673.15 crore in FY22. The nation’s reliance on global sources for lithium-ion components underscores the need for self-sufficiency in manufacturing electric accumulators and separators.