Who should own the world’s lithium?

Source– The post is based on the article “Who should own the world’s lithium?” published in “The Hindu” on 2nd June 2023.

Syllabus: GS1- Economic geography. GS3- Economy

News– Significant reserves of lithium have been found in Jammu and Kashmir.

What is the status of India’s lithium industry?

India’s electric-vehicle market was valued at $383.5 million in 2021. It is expected to expand to $152.21 billion in 2030.

India imported 450 million units of lithium batteries valued at $929.26 million in 2019-2020.

The ongoing global transition to low-carbon economies, the rapid expansion of AI, and 5G networks will greatly reshape global and regional geopolitics. The access to and control over rare minerals will play a crucial role in these changes.

Who should own these minerals?

In July 2013, Supreme Court of India ruled that the owner of the land has rights to everything beneath down to the centre of the earth.

The Supreme Court also recalled that the Union government could ban private actors from mining sensitive minerals. It is already the case with uranium under the Atomic Energy Act 1962.

Yet, large areas of land, including forests, hills, mountains, and revenue wasteland are publicly owned.

How do other countries manage lithium reserves?

In Chile, the government has designated lithium as a strategic resource. Its development has been made the exclusive prerogative of the state. The state has issued only 2 licenses to produce lithium in the country.

In April 2023, Chile’s president announced a new “National Lithium Strategy”. The new strategy calls for public-private partnerships for future lithium projects.

It will allow the state to regulate the environmental impact of lithium-mining, distribute the revenue from lithium production fairly among local communities, and promote domestic research into lithium-based green technologies.

Bolivia’s new constitution gave the state the control and direction over the exploration, exploitation, industrialisation, transport, and commercialisation of natural resources.

It has nationalised lithium and adopted a hard line against private and foreign participation.

This is believed to be one of the factors for the country’s failure to produce any lithium at a commercial scale. Bolivia’s current president seeks to change that.

The President wants to join hands with other Latin American countries to design a ‘lithium policy’ that would benefit all their economies.

Mexico’s president has also nationalised lithium in February this year.

In general, the countries in Latin and South America are thinking through ways and means to pursue a multi-pronged strategy.

The actions of these governments are also a response to the mobilisation of Indigenous Peoples in the region who want to hold corporations and governments accountable.

What is the way forward for India?

The appropriate development of the lithium sector will require a very high level of effectiveness on the part of the Indian state. It is necessary to meet its multiple goals of social wellbeing, environmental safety, and national energy security.

Much of India’s mineral wealth is mined from regions with very high levels of poverty, environmental degradation, and lax regulation.