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Does India Have Sufficient Lithium-Ion Reserves To Support the EV Revolution?
Nimit Arora
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Published on 9th Nov 21

Does India Have Sufficient Lithium-Ion Reserves to Support the EV Revolution?

Experts call it the oil of the 21st century. As of now, India is entirely relying on the import of lithium-ion batteries from other countries and is particularly dependent on China, which has dominated the lithium manufacturing industry. 

Given that the global demand for lithium is believed to skyrocket in the coming decade, there seems to be a run to find and exploit global lithium reserves.

Nation's first-ever Lithium reserves in Karnataka - so far confirmed at 1,600 tonnes - are just a seasoning. But it is a stash that India wants to rapidly hoard. So a sustained effort is in the making.

As the world migrates away from fossil fuels, batteries will be critical in the shift. Easy and uninterrupted access to Lithium is key to getting ahold of this future. Beyond India's dwarf reserves, massive outreach has begun to secure supplies.

An upcoming refinery in Gujarat for Lithium has been much-awaited and promises to be a step in the right direction. The entity behind this - a power trading company called Manikaran Power - hopes to produce 20,000 tonnes per annum of Lithium, in carbonate form. The supplies of ore have been tied up with Australia. Being Quad members, both nations could see more such strategic partnerships in the future.

World's largest reserves are mostly concentrated in South America, Australia and China:

  1. Bolivia: 21 million tonnes
  2. Argentina: 17 million tonnes
  3. Chile: 9 million tonnes
  4. United States: 6.8 million tonnes
  5. Australia: 6.3 million tonnes
  6. China: 4.5 million tonnes

India too has been working hard for strategic tie-ups. Khanij Bidesh - a PSU incorporated in 2019 by the collaboration of Nalco, Hind Copper and Mineral Exploration Ltd has got the mandate to acquire rare earth assets abroad, lithium being one of them. But India has much caught up to do in this global race for rare minerals.

Reserves of lithium, a rare metal critical to building batteries for electric vehicles, have been discovered in Mandya, 100 km from Bengaluru, a find that should boost local manufacturing of EV batteries.

But, to put this in perspective, the lithium find is small compared to many major producers. If one compares with 8.6 million tonnes in Chile, 2.8 million tonnes in Australia, 1.7 million tonnes in Argentina or 60000 tonnes in Portugal, 1600 tonnes is not that large.

It has been reported in a section of media that the estimates of lithium metal have been quoted to be as high as 14,100 tonnes in a small patch of a surveyed area in Mandya district of Southern Karnataka.  However, the exploration efforts have so far established 1,600 tonnes of lithium in the inferred category (low level of confidence) in the Allapatna-Marlagalla sector. 

At present, in the Indian market, high prices of EVs are a deterrent. The price range is above the affordable limit of middle-class families. The reason behind this high price is the cost of the battery. India imports 100% Li-ion batteries. Control over lithium import is the key factor for the EV revolution in India.

So, it is very much evident that when it comes to lithium-powered batteries, India is totally dependent on imports. India is reliant on the Middle East for its oil and could soon be equally dependent on China for its electric vehicle revolution.

Prices of battery-grade lithium carbonate have gone up to an all-time high. Shipping costs have also surged. All these have resulted in additional costs for EV makers. A serious consideration in this regard is needed with respect to forming a consortium and placing large orders to keep prices competitive. Else, global cell makers would route supplies to markets that guarantee volumes.

In 2019-20, India imported 450 million units of lithium batteries valued at Rs 6600 crores. In 2016, 175 million units were imported. China, Hong Kong & Vietnam are the top 3 nations exporting batteries to India. India has a vision of becoming a major EV adopting nation by 2030.

As India strives to establish a robust battery supply chain in order to meet its ambitious targets for electric vehicle (EV) uptake, India’s Khanij Bidesh India (KABIL) has signed an initial agreement with an Argentinian mining company Jujuy Energia y Mineria Sociedad del Estado (JEMSE) for the exploration and production of lithium. The South American country has the third-largest reserves of lithium and with India only manufacturing battery storage packs and relying on Chinese imports for the rest, the aim is to become self-sufficient across the value chain by 2025.

An Alternate to Lithium:

There is a constant effort to reduce dependence on materials & technology from China. India has a few exploitable options, one of which is aluminium. India has a large reserve of bauxite, the ore used to make aluminium. An aluminium-air battery can be the answer to India’s lithium woes.

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