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India closing in on lithium-deal with Argentina, tapping Australia and Chile

  • Category
    International Relations
  • Published
    6th Jan, 2024

Context

The mineral is a cornerstone in India’s switch to green energy thereby reducing its carbon footprints

India and Green Energy Transition

  • India, in its pursuit of securing critical minerals for its green energy transition, has taken a significant step by entering into a draft exploration and development agreement with Argentinian miner CAMYEN.
  • This move is orchestrated by the Mines Ministry through KhanijBidesh India Ltd (KABIL), a state-owned entity.
  • The focus lies on acquiring and developing lithium blocks, a key component in the production of lithium-ion batteries crucial for electric vehicles (EVs) and energy storage solutions.

The Significance of Latin America in Lithium Supply Chain

  • Latin American nations, particularly Chile and Argentina, play a pivotal role in the global lithium supply chain.
  • Collectively, they contribute 30–35% of the world's lithium supplies.
  • Chile, with 11% of global lithium reserves, alone supplies 26% of the global requirements.
  • Argentina, with nearly one-fifth of the global resources, contributes about 6%.

India's Push for Critical Minerals

  • Critical minerals: India's increased focus on critical minerals, including lithium, is driven by its commitment to green energy and reducing carbon footprints.
  • White gold: Known as 'white gold,' lithium is a cornerstone in India's transition to green energy, with applications ranging from EVs to lithium-ion battery production.

Domestic Auctions and Import Scenario

  • Lithium regions in India:India has recently put up lithium blocks for auction, including one in Jammu and Kashmir and another in
  • Imports:Despite domestic efforts, a significant portion of India's lithium requirements, spanning EVs, battery manufacturing, and energy storage solutions, is met through imports, constituting an import bill of around ?24,000 crore.

KABIL's Focus and Global Engagements

  • KABIL, a joint venture involving companies like NALCO, HCL, and MECL, is strategically positioned to secure lithium and cobalt for the domestic market.
  • As of September 2023, the focus includes engaging with projects in Australia, Argentina, and Chile.

Way Forward

  • Securing critical minerals: India's foray into lithium acquisitions in Argentina and engagements with key players in Chile reflects a proactive approach in securing critical minerals for its burgeoning green energy sector.
  • Sustainable energy solutions: As the world shifts towards sustainable energy solutions, India's strategic moves in the lithium market position it as a key player in the global transition to clean and renewable energy sources.

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