Lithium Reserves in India – Challenges and Way forward- Explained Pointwise

Lithium (Li), sometimes also referred as ‘White gold’ due to its high demand for rechargeable batteries, is a soft and silvery-white metal. It started a race of mining and procurement of Lithium reserves in India and all over the world. In this process, the Geological Survey of India (GSI) discovered lithium reserves of 5.9 million tonnes in the Salal-Haimana area of Reasi district in Jammu and Kashmir, making India one of the top 10 countries with lithium reserves.

This attracted interest from several companies, including JSW Group, Hindalco Industries, Ola Electric, Vedanta Group, Shree Cement, and even State-run Coal India Ltd. The government quickly amended rules to allow private miners to bid for critical minerals like lithium, leading to an auction in November 2023.

What are the reasons behind this underwhelming response from private players for Lithium auction?

1) Mineral Exploration and Classification-There are four stages of mineral exploration – G4, G3, G2, and G1 – as classified by the United Nations Framework Classification for Reserves/Resources (UNFC-1997), with G4 as the initial stage. Each level represents a progressive step in exploration, from initial identification to a detailed understanding of resource potential. The lithium reserves in Kashmir are currently classified under G3, the second preliminary exploration stage after reconnaissance, indicating a low level of confidence in the quantity, grade, and mineral content estimates.

2) Unproven and Speculative Reserves-The biggest deterrent for companies in bidding for the lithium reserves in Kashmir is that they are unproven and highly speculative at the G3 stage.

2)  Geological hurdles–

A) The lithium found in Kashmir is in the form of clay deposits mixed with other minerals, unlike the commercially viable brine or hard rock deposits  mined globally. Extracting lithium from such deposits is yet to be tested commercially, and India’s mining industry lacks the required technical expertise.

B) Further,J&K is ecologically sensitive and falls under seismic zone V—a classification for the most seismically active regions. These factors make any industrial intervention in the area a  challenging task.

3)  Sensitive Location-The location of the reserves in Kashmir, close to the Line of Control and in an ecologically fragile Himalayan region, poses additional challenges due to potential political volatility and local resistance.

What is the status of lithium reserve in India and the World?

The Atomic Minerals Directorate for Exploration and Research (AMD), part of the Department of Atomic Energy, has found about 1,600 tonnes of lithium resources in igneous rocks in the Marlagalla-Allapatna area of Mandya district, Karnataka.

Other potential areas are-

A) Mica belts in Rajasthan, Bihar, Andhra Pradesh.

B) Pegmatite belts in Odisha and Chhattisgarh.

C) Rann of Kutch in Gujrat.

Global Lithium Reserves and Production

In 2021, the world produced over 100,000 tonnes of lithium, which is four times more than in 2010. Australia is the biggest producer, making 52% of the world’s lithium. Unlike Chile and Argentina, where lithium is taken from brines, Australia gets its lithium from hard-rock mines, mainly from spodumene.

Country-wise Global Production 

Reserves-The “Lithium Triangle” region of Bolivia, Chile, and Argentina accounts for more than half of the global lithium reserves. However, lithium production is concentrated in Australia, Chile, and China.

Refining-China controls most of the world’s lithium refining, making up two-thirds of the capacity. It’s also a big supplier of lithium-ion batteries to India, providing about 75% of them.

What is the need and significance of the domestic production of  Lithium for India?

1) Meeting Growing Lithium-ion Battery Demand:-India’s lithium demand is projected to increase because more people will be using things like phones, renewable energy batteries, and electric cars in future. The demand for lithium in India is predicted to increase from 1,634 tonnes in 2022 to between 60,000 and 93,000 tonnes by 2050.

2) Reducing Import Dependence:-India currently has no lithium production and relies heavily on lithium-ion imports, which have surged from $94 million in 2014-15 to nearly $3 billion in 2023-24. For ex-India imports almost 70–80 per cent of its lithium and 70 per cent of its lithium-ion from China.Developing domestic lithium reserves could help reduce India’s import dependence and associated costs.

3) Supporting Clean Energy Transition:-Lithium is important for lithium-ion batteries, which are key for storing energy from sources like solar and wind power.Access to lithium reserves can help India switch to cleaner energy and keep the power grid stable.

4) Enabling Electric Vehicle Adoption:- Ensuring a stable lithium supply can ensure the adoption of EVs in India and contribute to reducing greenhouse gas emissions from the transportation sector.

5) Strategic Importance-China has mines in the lithium triangle and has refining capacity for more than half of the world’s lithium. China has previously exerted its dominance, such as in 2010 when it stopped Rare Earth Elements (REE) exports to Japan during a disagreement. This highlights the importance for India to boost its domestic production to reduce its dependence on China for lithium and other critical minerals.

What steps have been taken by the government to explore lithium reserves in India?

1) Geological Surveys: The Geological Survey of India (GSI) has been actively involved in conducting geological surveys and explorations to identify potential lithium reserves across different regions of the country.

2) Policy Reforms: The government has introduced policy reforms to encourage exploration and development of lithium and other critical minerals. In 2023, the Ministry of Mines made a list called ‘Critical Minerals for India.’ This list includes minerals that are crucial for the country’s economic growth and national security. Lithium is considered a ‘strategic‘ mineral because India relies entirely on imports for it. This puts lithium at the top of the priority list.

3) Protecting Mining Sector from Foreign Exploitation-Indian government is committed to  protect its mining sector from foreign exploitation by law. According to the Mines and Minerals Act, only Indian individuals or firms with Indian members can get licenses for mining. This prevents a situation seen in countries like Argentina or Chile, where foreign companies extract lithium, but the benefits mostly is nor reaped by the producing country.

4) Auctions and Licensing: The government has conducted auctions and issued licences for the exploration and extraction of lithium reserves. This includes offering lithium-bearing blocks for bidding to private companies and ensuring partnerships between government agencies and private sector players.
For ex-In 2023, 20 blocks of critical and strategic minerals were auctioned to boost the mining process, including two lithium blocks in Jammu and Kashmir and Chhattisgarh.

5) International Collaboration: India has engaged in international collaboration and partnerships to leverage global expertise and technologies in the exploration and development of lithium reserves.
For ex-the Ministry of Mines, through the state-owned Khanij Bidesh India Ltd (KABIL), has entered into a draft exploration and development agreement with Argentinan miner CAMYEN for possible acquisition and development of five-odd lithium blocks.

6) Mineral Security Partnership-India has recently joined an important group called the Mineral Security Partnership (MSP), led by the United States. MSP consists of 13 countries, including Australia, Canada etc, The goal of MSP is to encourage both public and private investment in global supply chains for critical minerals.

What are the challenges in extraction of Lithium in India?

1) Environmental Concerns-Lithium mining is resource-intensive, and the mineral waste produced can further pollute water and soil, affecting local inhabitants, agriculture, and biodiversity.
For ex-Lithium mining requires a lot of water around 2.2 million liters to extract just one ton of the metal.

2) Technical Challenges-

A) India doesn’t have the capability to refine lithium to make high-quality batteries. To do this, India needs to start from scratch by building the necessary facilities and expertise.Lithium found in Reasi is different from the one found in South America, making the refining process more difficult and expensive. India still lacks experience in this area, adding to the challenges.

B) Turning lithium ores into battery-grade lithium involves multiple steps. This multi-stage process requires sourcing chemical precursors like cobalt sulphate, nickel sulphate, and manganese sulphate. These chemicals must be obtained from specialized battery-grade companies, which India currently lacks.

3) Security Challenges–

A) India-Pakistan disputes over the Chenab River, proximity to the Line of Control, and the evolving situation since the abrogation of Article 370 may complicate capitalisation on the reserves.

B) Jaish-e-Mohammed’s offshoot, the People’s Anti-Fascist Front, declared that it won’t allow India to access the resources.

4) Lack of exploration and mining activities- Lithium exploration and mining activities in India are still in their nascent stages. There has been limited investment and focus on developing lithium resources.

5) Socio-economic Concerns-A study from 2018 looked at how lithium mining affects both society and the environment. Researchers say that not enough research has been done in the past 40 years to tackle the sustainability problems caused by impact of lithium mining on affected communities.

6) Mining Policy: The absence of an integrated mining policy for strategic metals and minerals, and poor domestic capabilities could hinder lithium exploitation.

What should be the way forward?

1) Enhance Exploration Efforts-India should intensify its efforts to explore and identify potential lithium reserves within the country.This includes conducting more geolorgical surveys, using remote sensing, and drilling in areas where there might be possibility of finding lithium.Collaboration with international experts and utilising advanced exploration technologies can aid in this process.

2) Promote Research and Development:- India should invest in research and development for lithium extraction. It should encourage academic and industrial research to develop cost-effective and environmentally sustainable methods for lithium extraction from various sources, such as pegmatites, brines, and clay deposits.

3) Establish a Supportive Regulatory Framework:-The government should develop a comprehensive policy and regulatory framework to encourages  lithium exploration, mining, and processing activities.This means simplifying the licensing process, offering financial benefits, and ensuring environmental sustainability.

4) Foster International Cooperation-India can engage in international cooperation and knowledge-sharing initiatives with countries that have established lithium industries.
For ex-Australia and India has a comprehensive strategic partnership. It has lithium reserves in hard rock form, similar to India’s deposits. Australia’s knowledge in processing hard rock lithium could lead to technology transfer and strengthen the positive political relationship between the two countries.

5) Strengthen Global Supply Chain-India must also partner with like-minded countries such as the United States, Japan, Australia, Indonesia and South Korea to strengthen global lithium supply chain management and reduce strategic vulnerabilities.

6) Leverage International Forums-India should leverage forums such as the Indo-Pacific Economic Framework, Mineral Security Partnership and the Quad to connect initiatives in the Indo-Pacific region and later extend them globally.