The big lithium finds: painting a golden picture for India?
Feb 24, 2023
In February 2023, India’s Mines Ministry announced the discovery of Lithium inferred resources(G3) of 5.9 million tonnes in the Reasi district of Jammu and Kashmir. This discovery of vast lithium reserves can catapult India into the league of superpower nations alongside the US and China regarding energy security. While it’s certainly celebratory news for India, there needs to be more assessments to know whether the new found lithium reserves can be tapped into and used commercially. Going on, the development of these reserves will need to be orchestrated sustainably, both in terms of the environment and equity.
It is important to note that the process of exploration, mining, and production will take around 6-7 years or maybe more to establish. Hence, while India addresses the environmental, seismic, and political issues involved, developing smart contracts for Lithium sourcing can be a prudent strategy to manage risk and reward in the long run.
The Indian government has announced massive investments in infrastructure development in its efforts to achieve a US$ 5 Trillion economy. With the escalating need for energy and India’s heavy reliance on coal for energy production, the nation is going all out to create 50 per cent of its electricity from non-fossil sources by 2023. Complementing the same purpose, the government aims to add 76 gigawatts of utility-scale solar and wind power by 2025. This is an area where the newfound lithium will play a critical role, bringing the nation closer to its Net Zero goal and leading it to a sustainable mobility transition.
Although this aha moment can be a game-changing opportunity for India, it is too early to envisage anything as every discovery or invention comes with many challenges, therefore, a comprehensive perspective is mandatory as a way forward. Coming to light, that too during the time of the G20 presidency, is undoubtedly a milestone moment for India as it gets equipped with a supreme opportunity to showcase its potential as a global supplier of lithium in the global market after Australia and Chile; thereby strengthening its international influence and generating opportunities for higher cooperation with other leading G20 countries in the energy and technology sectors. Currently, there’s a huge buzz around EVs and the world focus is on trade; when trade becomes a key focal point of discussions, such a discovery cannot be ignored. To make it a win-win situation for India and avoid even the most trivial errors, the blueprint that the government sketches must be foolproof, keeping the fundamentals in mind.
Consequently, developing a strong, domestic lithium mining industry at a competitive cost will enable the nation to reap significant economic benefits, including creating a whole value chain, generating new job opportunities for the local populace, higher tax revenue, more money flow, increased logistics setup and saving of much-needed foreign currency owing to cut down on lithium imports. Adding on, such initiatives also take a toll on the environment. Therefore, the degradation of the environmental aspect should be pre-considered as to how it can be mitigated, and if there are any lessons from the international arena that we could borrow, that becomes a critical moot point of consideration.
The EV fraternity is gravitating toward alternate mechanisms or fuels, with more technology-driven resorts emerging that are more nature-friendly, and since India now has a find, it has a value which will be used somewhere purposive. With all the striving, the world is just not stopping here. Lithium: widely known as white gold, is a vital discovery as it’s one of the components that is emerging as a key fuel for the future. One must be more rational and reasonable in approaching and should not be too materialistically extracting the whole thing to garner the attraction or the money on short notice.
Anything that happens globally, impacts globally. Now that global trade is going in full swing, the world is eyeing similar components. For an instance, when the Integrated Chip (IC) shortage occurred, the whole world was influenced. Fast forward to today, the lithium component is assuming similar dimensions to IC. Therefore, a discovery that has transpired at this time, when the resource is scarce and high in demand, has certainly put India at the centre of the fulcrum for now. Why? Because some countries already had it and it was known, whereas, it’s a new revered find for the nation. Now that undeniably brings numerous eyeballs to India, however, India must act responsibly as it has previously, in times of atomic and nuclear discoveries and all such capabilities. Since India is widely known to behave maturely with respect to the environment, empowering the local population, and then creating an ecosystem, the same is undoubtedly going to be a more holistic approach here and the way forward. Moving on, the ball is in India’s court now. Considering the prior IC shortage period, scarcity was built in the world across product categories. On the contrary, this breakthrough can be a huge catalyst for promoting Make in India ideology and making India a self-reliant, global manufacturing hub. If India wisely deals with the discovery, scarcities can be prevented with locally available inputs and India can become a global pioneer with an upper hand and a changed power equation.
EXECUTIVE DIRECTOR, RESEARCH & INSIGHTS