What Rajasthan’s lithium reserves mean for India

File image of lithium reserves in J&K, India (Image Source: Irfan Amin Malik)

Electric vehicle (EV) evangelists have a reason to celebrate now that lithium deposits have just been discovered in Rajasthan. According to the Geological Survey of India (GSI), deposits have been traced to the Degana district of Rajasthan and are higher in quantity than the ones recently discovered in Jammu & Kashmir.

Lithium-ion batteries are currently the most energy-efficient form of battery power for battery electric vehicles or BEVs. The amount of energy packed in a lithium-ion battery is denser than what is provided by an alternative form of electric power, such as hydrogen fuel cell EVs which use on-board hydrogen to produce electric power via a fuel cell.

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According to a report by IANS, the reserves can presently meet 80 percent of India’s demand for lithium, which is steadily increasing. Demand is exponentially on the rise across the world, with countries like the United States estimated to need 500,000 metric tonnes of lithium by 2034, which, according to Wired, is more than the global supply of lithium in 2020. Lithium batteries are also found across most consumer electronics.

What does it mean for India’s EV ecosystem? 

“Lithium accounts for 15 percent of a battery’s cost. The cost of batteries could drop by 5 percent if we can purchase lithium from the Indian reserve for 2/3rd the cost of the imported material,” says Sohinder Gill, CEO, Hero Electric and Director General, Society of Manufacturers of Electric Vehicles. “After J&K, Rajasthan having a higher capacity of lithium is a big accomplishment for the country as it is projected to help in meeting 80 percent of India’s total demand. This can reduce the country’s dependence on China substantially.”

Others, including Log9 Materials co-founder and MD Pankaj Sharma, state that the tangible effects of Rajasthan’s lithium deposits on the Indian EV market won’t be apparent for some time. “Discovering lithium reserves is just the first step. There is a long distance to travel before we reach a point where the extracts of the discovery can be put to cell and battery manufacturing and that will depend substantially on the progress we make in the field of material sciences over the decade,” says Sharma, while concurring that “our resolve for energy independence can only get stronger. However, this does remain conditional upon where the lithium reserves discovered are capable of being processed to lithium carbonate and derivatives”.

Are these reserves significant enough to give India a geostrategic advantage? 

Despite countries like Bolivia having the largest known lithium reserves (21 million tonnes) China continues to have significant sway over the lithium supply chain. According to estimates from Bloomberg NSE, China’s share of the lithium-ion battery market could be as high as 80 percent. Having vast lithium reserves does not automatically give a country an inherent advantage although it is a step in that direction. Six out of the 10 major EV battery producers are based out of China, with CATL making three out of every 10 batteries supplied globally. Cells from CATL also form the battery packs for several Indian EVs.

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There is another aspect to battery production. Turning a lithium ore, such as the one discovered in Rajasthan and J&K, into purer lithium carbonate or lithium hydroxide needed for batteries is an expensive and capital-intensive process. Even for countries like the US, which is mining domestic lithium on a war footing, catching up with China could take several years. “To make India self-reliant and a global EV manufacturing destination, the industry requires well-rounded support in the form of ease of capital inflow for battery and EV manufacturing and a focused approach towards battery recycling,” says Kalyan Korimerla, MD, Etrio Automobiles.

Still, experts are buoyant as to what this discovery could yield for the Indian EV market, where sales predominantly happen in the e-2W and the e-3W market. Uday Narang, founder of Omega Seiki Mobility, says, “We will witness roughly a 70 percent increase in three-wheelers with the deposits, transforming India into a global leader in sustainable development and green energy.”

Should there be safeguards against excessive mining of lithium? 

“The most efficient use of Lithium reserves should go towards the most crucial phases of the switch to renewable energy,” says Narang. He emphasises that public transport should be prioritised and that a fair transition should prioritise cutting back on luxury spending and expanding public transport. “Because of lithium’s geostrategic significance, it is even more crucial that resource development and exploitation be carried out in public interest and without causing any significant environmental or social issue,” he says.

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While lithium-ion batteries are one step towards zero tailpipe emission, the process of mining lithium isn’t particularly environmentally friendly, requiring massive amounts of water and leading to soil degradation “Any crucial gains could be negated if lithium isn’t mined carefully,” says Sohinder Gill. Many resource-rich countries like Argentina, Chile and Bolivia have faced issues of soil degradation, contamination and water shortage. In a state like Rajasthan, where water is a scarce resource, this could lead to an acute shortage.