Objective of the Deal:
India, through Khanij Bidesh India Ltd (KABIL), has secured its first overseas lithium exploration and mining deal.
The primary aim is to reduce dependence on China, a major supplier of lithium, a critical mineral essential for the energy transition.
KABIL, a joint venture of state-run miners, has signed the agreement involving five lithium blocks in Argentina.
The exploration and mining deal covers five blocks spanning 15,703 hectares in the Catamarca province, Argentina.
The project cost is estimated at Rs 200 crore.
Significance for India:
Strengthening Lithium Supplies: The deal contributes to India’s efforts to strengthen lithium supplies, reducing reliance on China.
Development of Mining Sectors: The agreement aims to foster the development of lithium mining and downstream sectors in both India and Argentina.
Diversification of Supply Chain: It facilitates diversification of the supply chain for critical materials, aligning with Global Net Zero goals.
Importance of Lithium:
Role in Energy Transition: Lithium is a crucial element for the energy transition, used in batteries for electric vehicles and various electronic devices.
Reducing China’s Dominance: With China holding 80% of the global lithium supply, the deal aims to break free from China’s dominance in this critical mineral.
Global Context – Mineral Security Partnership (MSP):
India’s Participation: The agreement aligns with India’s entry into the US-led Mineral Security Partnership (MSP) in 2021.
Counteracting China’s Influence: MSP is designed to counter China’s control over critical energy mineral supply chains for diplomatic leverage.
Financial and Operational Aspects:
Project Cost: The estimated cost for the lithium exploration and mining project is Rs 200 crore.
Technical Expertise Acquisition: The deal not only secures lithium resources but also allows India to acquire technical expertise and operational experience in lithium exploration and extraction.
Details of Blocks:
The agreement covers five specific blocks in Argentina: Cortadera-I, VI, VII, and VII, as well as Cateo-2022-01810132.
Background on KABIL:
Formation: Khanij Bidesh India Ltd (KABIL) was established in 2019 as a joint venture of state-run miners NALCO, HCL, and MECL.
Strategic Mineral Sourcing: KABIL was formed with the purpose of sourcing strategic minerals like lithium and cobalt from international markets.
Argentina: KABIL had previously signed MoUs with Argentina’s state-run companies, including CAMYEN.
Australia: KABIL has a collaborative framework MoU with Australia’s Critical Mineral Office for joint due diligence and investment in lithium and cobalt mineral assets.
‘Lithium Triangle’: Argentina, along with Bolivia and Chile, forms part of the ‘Lithium Triangle’ in the Andes, known for significant lithium deposits in salt pans.
This landmark lithium exploration and mining deal signify India’s proactive steps to ensure a stable and diversified supply of critical minerals essential for the global shift towards sustainable energy solutions.