Indian JV scouts to acquire Overseas Lithium mines amid expanding Electric Vehicles Industry

India, like many counties, is shifting toward EVs and increased mobility to reduce air pollution, carbon dioxide emissions, and fuel imports. However, a major concern for India's domestic EV segment is the absence of indigenous manufacturing of lithium-ion battery which is a key component for electric vehicles.

In order to promote domestic battery industry, state run Khanij Bidesh India Ltd (KABIL) is looking out to acquire cobalt and lithium mines (key raw material for batteries) in Australia and South America.

KABIL is a consortium of three public-sector companies including National Aluminum Company (NALCO), Hindustan Copper Ltd (HCL) and Mineral Exploration Corp Ltd (MECL). It has been formed by the Ministry of Mines, Government of India, to identify, explore, acquire, develop and process strategic minerals overseas.

The company is looking for acquiring strategic mineral assets in Australia and South America. The idea is to acquire cobalt and lithium mines as well as to get into purchase agreements of these minerals as this will help the country in achieving resource security with respect to strategic minerals. This has come in the backdrop of Chinese state-owned firms securing lithium mine concessions in countries such as Bolivia, Argentina and Chile, which forms the so-called lithium triangle and the idea is to not allow India to fall in a vulnerable position with a likely threat of supply squeeze.

Few months back, KABIL visited the Lithium Triangle countries in South America (comprising Chile, Argentina and Bolivia), which had offered to meet India's growing demand for lithium as the country looks to set up large lithium-ion battery plants.

Currently, India imports almost all of its Li-ion battery or cell requirements. Most of the work on Li-ion batteries is still focused on R&D--and that too, at the government sector level. In the private sector, meanwhile, companies are primarily building battery packs with Li-ion cells imported from China. India lacks many raw materials including lithium for manufacture of these batteries. In order to promote domestic manufacturing of lithium-ion battery, the Indian government has doubled the import duty on lithium ion cells used in EV to 10% from April 2021.

India Energy Storage Alliance (IESA) expects the Indian market for energy storage to grow to over 300 GWh by 2025.