Moneycontrol Pro Panorama | Lithium deposits in India: Better late than never

Lithium is a non-ferrous metal and is one of the key components in EV batteries (Representative Image)

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Last week, the Geological Survey of India announced that it has found lithium deposits in Reasi district in Jammu and Kashmir. The initial exploration reveals that lithium reserves could be as much as 5.9 million tonnes.

That’s a huge number. It suddenly catapults India to the top five nations with identified lithium resources. According to the US Geological Survey, Bolivia has 21 million tonnes of lithium reserves, followed by Argentina (19 million tonnes, Chile (9.8), Australia (7.3) and China (5.1).

Lithium is crucial for the world’s energy transition away from fossil fuels. Although its key demand is for making batteries (which accounts for three-quarters of the mineral’s consumption), it also has a role to play in clean energy technologies ranging from solar photo voltaic cells to hydrogen. The metal had a white hot rally of 1,200 percent in the two years to November 2022 before prices cooled following dampened demand for EVs in China.

While alternative materials such as sodium and aluminium are in the works for battery technology, these are still in a nascent stage, keeping demand for lithium strong.

In recent years, there have been multiple reports that the world will fall short of lithium supply. In 2021, the worldwide production of lithium carbonate equivalent (LCE) was 540,000 tonnes (this in turn includes around 105,000 tonnes of pure lithium). By 2030, LCE demand is forecast to rise to 3 million tonnes.

As India looks to accelerate EV adoption, its lithium-ion battery demand is expected to rise 13 times to 70GwH by 2030. The country currently imports all its lithium requirements — including raw material and finished products — and spends at least $2 billion annually.

Apart from the import costs, there is the strategic angle to consider in this era of resource nationalism. China, according to some estimates, is said to be controlling around one-third of the world’s lithium resources. That’s not all. It has 70 percent of the world’s lithium processing capacity as well.

That’s the reason why the discovery of lithium in India has sparked jubilation. However, it will be quite some time before the nation becomes self-reliant in the production of lithium and its products.

This discovery by GSI, after all, is just the initial stage of a long process. A couple of more rounds of surveying is needed to establish the ‘proven’ reserves of this mineral. On top of that, it needs technology and equipment to set up lithium refining capacity. It won’t be easy.  Lithium mining and refining need a lot of water and impact the environment.

India should take care not to go the way of Bolivia which has the largest reserves and a negligible output of the mineral. While the Centre touted this discovery of lithium deposits as a first in India, others have pointed out that local geologists had spotted this 24 years ago.

To be sure, lithium wasn’t that critical to the world then as it is now. However, the journey to lithium production must not take another 24 years.

For more on this story, read our explainer on this maiden lithium find and revisit our column from last week that argued why India must move quickly to secure its lithium resources.

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Ravi KrishnanMoneycontrol Pro