TAG: GS 2: ECOLOGY AND ENVIRONMENT
THE CONTEXT: Recently, the Mines Ministry, operating through the state-owned Khanij Bidesh India Ltd (KABIL), has initiated strategic agreements and exploration endeavors with key global players in Argentina, Chile, and Australia to tap into lithium reserves.
EXPLANATION:
- India is making significant strides in securing lithium resources, a pivotal mineral crucial for the nation’s transition towards green energy, thereby aiming to reduce its carbon footprint.
Strategic Agreements and Exploration Initiatives:
- KABIL has forged a draft exploration and development agreement with Argentinian miner CAMYEN for potential acquisition and development of several lithium blocks.
- Additionally, a non-disclosure agreement has been established with Chilean miner ENAMI, aiming at potential exploration, extraction, processing, and commercialization of lithium resources.
- Furthermore, KABIL has engaged consultancy major PwC to identify viable investment projects in Australia, a nation known for substantial lithium production.
Global Dominance in Lithium Reserves:
- Latin American countries, especially Chile and Argentina, currently contribute 30–35% of the world’s lithium supplies.
- Chile, holding 11% of global lithium reserves, supplies 26% of global requirements, while Argentina, possessing nearly one-fifth of the world’s lithium resources, provides about 6% of the global supply.
- Australia is also a significant producer in the global lithium market.
Advancements in Argentina:
- The negotiations for lithium block acquisitions in Argentina have progressed to “advanced stages.”
- The anticipated cost of these acquisitions in Argentina might reach a “couple of hundred crores,” requiring Cabinet approval for the proposal’s finalization.
- KABIL’s board approved the “Draft Exploration and Development Agreement,” leading to the Ministry’s clearance for the opening of a branch office in Catamarca, Argentina, earlier approved in June.
India’s Increasing Focus on Critical Minerals:
- Over the past year, India has intensified its quest for critical minerals like lithium, recognizing its pivotal role in green energy adoption.
- Termed as ‘white gold,’ lithium stands as a cornerstone in India’s shift towards sustainable energy solutions, encompassing various sectors like electric vehicles (EVs), lithium-ion battery manufacturing, and energy storage solutions.
- Currently, India’s lithium requirements are predominantly met through imports, culminating in a significant import bill of approximately ₹24,000 crore.
Role of KABIL and Global Engagements:
- KABIL, a joint venture comprising entities like NALCO, HCL, and MECL, is actively engaged in sourcing lithium and cobalt, another critical mineral, for the domestic market.
- The entity is strategically partnering with projects and companies in Australia, Argentina, and Chile to secure these vital resources.
- Argentina, as of September 2023, hosts two operational lithium mines and has multiple lithium projects in various stages of development.
Conclusion:
- India’s concerted efforts to secure lithium resources from countries like Argentina, Chile, and Australia signify the nation’s commitment to embracing renewable energy and reducing dependence on carbon-intensive sources.
- This strategic pursuit of critical minerals aligns with India’s ambitious goals of fostering a sustainable and eco-friendly future, leveraging the potential of green energy technologies and mitigating environmental impact.