Opinion
Our J&K find could put India on the lithium map
Summary
An ‘inferred’ stash of 5.9 million tonnes would be 5.5% of the world’s identified reservoirs of a key metal used in EV batteries. If confirmed, it could spell self-sufficiency in a buzzy arenaSelf-sufficiency in inputs for eco-friendly mobility is an important goal for the country, so any lithium strike should make us sit up. Earlier, a small find in Karnataka had made news, but it’s a bulky discovery in Jammu and Kashmir (J&K) that could put India on the world map of this metal’s reserves, after the Geological Survey of India reported “inferred" lithium resources of 5.9 million tonnes in Reasi district. This figure is about 5.5% of the world’s identified total, placed at 98 million tonnes by the US Geological Survey, half of it in South America’s ‘lithium triangle’ of Bolivia, Chile and Argentina, with the US, Australia and China also well endowed. For India to join the league of the latter trio, the J&K find will need scans that offer significantly higher levels of confidence. The part of our better indicated reservoir that can profitably be extracted for industrial use would then be counted as our reserves. This may take time, but the metal’s scarcity and use in batteries for electric vehicles (EVs) have spelt a worldwide scramble for it. Last year saw a spectacular upshoot in global prices. Lithium carbonate and hydroxide, key inputs for EV power-packs, had both zoomed above $80 per kg by late 2022, up from under $20 in mid-2021, and have held up near their peak rates.
This light silvery-white metal found in the earth’s crust has taken the shape of a big red dot on the map of geopolitics. The aim of carbon neutrality has begun to set economic terms amid a global schism that has raised the threat of trade wars, autarkic inward turns and outright de-globalization. And big red China dominates the lithium supply chain. Beijing has deals tied up with South American suppliers and its hold on refining places about two-thirds of the world’s lithium cell assembly under Chinese control. Such was the US alarm at being out-run on this (as with microchips), that it went against its free-market doctrine last year to enact an industrial policy behind a trade barrier, with state funds assigned to develop its very own EV supply chain, China-style. With the spirit of free trade violated so openly by an oddly named US law, its Inflation Reduction Act, other countries with EV ambitions have joined the scramble. Lithium’s lightness and ability to pack in energy make it a good pick for vehicles and devices that run on rechargeable batteries, since lithium ions can store and release electricity without adding much body weight. Other uses of the metal are fast being pushed into the shade. As the world’s streets go electric, annual demand for the metal could reach 3-4 million tonnes by 2030, as per a McKinsey report, which would be about five times the usage estimate of 2022. Jockeying for supply security is only expected to intensify as new players seek a competitive edge to chase down China’s lead.
Led partly by a fiscal incentive for production, India Inc has also outlined ambitious plans for battery giga-factories. Private Indian hopefuls in this emerging field include Mahindra, JSW, Hero, Ola, Suzuki-Toshiba and existing car-battery makers, while state-run ISRO and BHEL have joint plans too; but it’s Reliance and Adani that have made waves with huge ventures lined up. Should J&K’s tentative find of lithium qualify as ‘reserves’, lithium battery-makers could integrate their operations backward into refineries and power-cell making. This, in turn, would relieve us of a key import dependency and help electrify Indian traffic faster. But it’s a long haul ahead and let’s not get ahead of ourselves. The stash awaits validation.
