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India’s lithium dependency worries


Lithium has been among the most sought-after mineral during the past few years, largely on the back of its usage in battery manufacturing. India is at odds with a major import source for the mineral, China. Mint looks at India’s options:

Why is India looking for lithium?

India has been scouting for lithium reserves as the mineral is a key component of lithium-ion batteries, the demand for which has surged amid the Centre’s push to boost the adoption of electric vehicles (EVs) in the country. The 18,000 crore production-linked incentive scheme for advanced chemistry cell (ACC) battery storage, a flagship incentive scheme for the industry has kicked off and the supply of lithium, which is largely an imported product, has declined. With India being in a diplomatic tussle with China, the supplies from the neighbouring country have declined and India too is looking for other import avenues.

Why has the supply of lithium declined?

The supply of lithium has not been in line with the surge in demand from electric vehicle makers across the world. China also is witnessing a mismatch between demand and supply, which has led to a rise in prices. According to Simon Moores, the chief executive officer of Benchmark Mineral Intelligence, 40 new mines would be required over the next 10 years. He, however, said in a series of tweets in February this year that a total of 15 new mines may be added in the next seven years, which will add as much as 1 million tonnes of lithium to the supply chain.

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Major producers

Does India produce lithium?

India is dependent on imports for lithium as production in the country is minimal. India was importing the by-product, lithium-ion batteries. The first traces of the lithium have been found in Karnataka’s Mandya district, a mere 100 kilometres from Bengaluru. The preliminary find is relatively small, with just about 1,600 tonnes of lithium deposits.

Who are the major lithium producers?

Australia was the largest lithium producer in 2021, according to US Geological Survey, with an estimated output of 55,000 metric tonnes. Chile and China ranked second and third, with 26,000 and 14,000 metric tonnes, respectively. Australia primarily extracts the alkali metal from spodumene, a lithium bearing mineral, while Chile gets it from brines, which are pumped from below the earth’s surface into evaporation ponds in the country’s Atacama Desert. China is also the leading consumer of the metal.

What is India doing to source lithium?

India is searching for domestic reserves and looking for newer countries to source the mineral. On Tuesday, India committed to jointly invest $6 million with the Australian government to explore lithium and cobalt mines there over the next six months. Khanij Bidesh India Ltd (KABIL) has signed a preliminary agreement with Australia’s Critical Minerals Facilitation Office. In 2020, KABIL also signed a pact with an Argentine firm to jointly explore lithium in the South American country.

 

 



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