Exploration, imports, private firms: India's search for lithium spreads out

'White gold', needed for electric car batteries, is scarce in the country and getting expensive internationally

The Centre has listed 24 new Bills to be introduced for Parliament’s Monsoon session that began Monday. The mining sector reforms bill that is expected to allow private companies to dig for lithium is among them.

Across the world, there is a rush to find lithium or “white gold”, an essential component in electric car batteries. Batteries account for about 74 per cent of global end-use. The search is on in India as well.

The Geological Survey of India (GSI), which works under the mines ministry, during field season programme (FSP) 2016-2017 to 2020-2021 carried out 14 projects on lithium and associated elements in Bihar, Chhattisgarh, Himachal Pradesh, Jammu & Kashmir, Jharkhand, Madhya Pradesh, Meghalaya, Karnataka and Rajasthan. During FSP 2021-22, it had taken up 5 projects in Arunachal Pradesh, Andhra Pradesh, Chhattisgarh, Jammu & Kashmir and Rajasthan.

According to government data, no reserves or resources of lithium-bearing metals are so far part of the national-mineral inventory.

Preliminary surveys and limited subsurface exploration by Atomic Minerals Directorate for Exploration and Research (AMDER), a unit of Department Atomic Energy (DAE), have shown presence of lithium resources of 1,600 tonnes (inferred category) in Marlagalla in Mandya district of Karnataka – the first traces in the country.

But the reserves found are classified in the “inferred category” and hence the associated confidence level is low, Rakesh Surana, Partner, Deloitte India, said.

Surana pointed out that the 1,600 tonnes is preliminary and actuals may be larger and further exploration is required. Once that is done a commercially viable technology for extraction would be required. The question is will opening up lithium mining to private sector companies help in exploration?

Experts believe it would help in identifying resources and reserves. Big companies already in the mining space are likely to be interested, said Vivek Jain, Director, Corporate Ratings, India Ratings and Research.

That may be on a long-term horizon. In the near term, as far as India’s EV play goes, it’s largely going to be dependent on imports. Lithium is primarily imported as lithium-ion batteries for EVs and energy storage system (ESS).

India’s imports of lithium and lithium-ion in FY21 stood at Rs 8,984 crore in FY21 and increased to Rs 13,838.22 crore in FY22. China and Hong Kong were the major sources of imports. With the government planning 30 per cent EV sales penetration by 2030, the demand for lithium is expected to surge.

Globally, increased battery demand has sent prices of lithium carbonate--used in rechargeable lithium batteries--soaring. In the last one year, prices of Chinese lithium carbonate increased by more than 400 per cent as demand outstripped supply.

Lithium resources however are being augmented. According to the US Geological Survey, lithium resources worldwide total about 89 million tonnes (mt). The top countries with resources are: Bolivia (21 mt), Argentina (19 mt), Chile (9.8 mt), US (9.1 mt), Australia (7.3 mt), China (5.1mt). However, in terms of production, Australia is the largest.

A McKinsey report mentioned that an announced pipeline of projects will likely introduce new players and geographies to the lithium-mining map, including Western and Eastern Europe, Russia, and other members of the Commonwealth of Independent States (CIS).

India is also looking outside. In March this year, India and Australia agreed to undertake due diligence of greenfield and brownfield lithium and cobalt mineral assets, looking at India’s long-term clean energy roadmap. In June 2020 also, Australia had signed a deal to supply India with critical minerals needed for the new-energy economy.

As the search for lithium continues, Indian companies are tying up with suppliers in countries that have major resources.

Godi India, which is setting up a giga factory for lithium-ion cell manufacturing in India by 2024, said that its suppliers have mines in South America, Africa and Australia.

Talks are also on for global suppliers to set up lithium-ion cathode manufacturing facilities in India, Mahesh Godi, founder and chief executive officer, Godi India, said.

A number of companies in the last 3-4 years have signed MoUs to set lithium-ion up battery plants and cell technology.

The government approved PLI scheme ‘National Programme on Advanced Chemistry Cell (ACC) Battery Storage’ for achieving manufacturing capacity of 50 gigawatt hour (GWh) with a budgetary outlay of Rs 18,100 crore is also aimed at reducing imports.

“This programme is technology agnostic and the beneficiary firm is free to choose a suitable technology (some of them could be lithium-ion plays,” Surana said.

Though Arthur D Little estimates that by 2030, electric passenger cars will make up for only about 5 per cent of total EV sales, progress on the two and three wheeler front will bring the automobile battery-powered total to about a third.

Tarun Mehta, co-founder and CEO at Hero MotoCorp-backed Ather Energy said, the scale at which the e-two wheeler industry is going to reach in the next 2-3 years would need local production of lithium-ion cells as well as local mining of the raw material.

“If the entire two wheeler market were to go electric by the end of the decade – which is a very distinct possibility now--- the requirement will be 150-200 gigawatt hour,” he said.

To put things in perspective: Tesla’s giga factory is 45 GWh.