India Nears Major Deal For Acquisition Of Lithium Blocks In Argentina

India is in the final stages of negotiations to secure a deal for the exploration and development of five lithium blocks in Argentina.

This comes as New Delhi is also involved in discussions with other nations rich in critical minerals.

The contract will be inked between Khanij Bidesh India Ltd. (KABIL), a joint venture firm that concentrates on discovering, purchasing, developing, processing, and commercially exploiting strategic minerals from foreign locations to supply in India, and Catamarca Minera Y Energética Sociedad Del Estado (CAMYEN), a government-owned mining and energy corporation in the Catamarca province of Argentina.

The Centre will also invest around Rs 200 crore over five years for the exploration and development of these mines, Business Standard reported.

“The talks are in the final stages, and a proposal has already been submitted to the Cabinet Committee on Economic Affairs for approval,” a the government official aware of the development was quoted as saying by Business Standard.

After Australia, this is India’s second attempt to sign a foreign partnership for sourcing critical minerals. In 2022, India signed a memorandum of understanding with Australia's Critical Minerals Facilitation Office (CMFO) to explore five blocks — two dedicated to lithium and three to cobalt.

India is also planning to establish an overseas office of KABIL in Catamarca to facilitate smoother coordination with local regulatory authorities.

“Engaging in the exploration and extraction of critical minerals in Argentina will require considerable time and ongoing oversight. Establishing the offshore office of KABIL is a strategic measure to protect and uphold our interests in this endeavour,” another senior official was quoted as saying in the Business Standard report.

According to the United States Geological Survey's (USGS) Lithium Statistics and Information 2023 report, Argentina is home to 21 per cent of the global lithium reserves, which total 98 million tonnes. This places Argentina second in the world, with Bolivia holding the top spot.

The majority of these reserves are predominantly located in the salt flats of the provinces of Catamarca, Salta, and Jujuy, which are part of the Lithium Triangle.

India's endeavors in Argentina to acquire lithium blocks will advance its pursuit of self-sufficiency in meeting clean energy needs.

Furthering this effort to ensure the supply chain, India launched its first auction drive for critical minerals on 29 November. The auction included two lithium blocks located in Jammu and Kashmir and Chhattisgarh, which were opened for bidding.

According to the government estimates, around 5.9 million tonnes (mt) of lithium reserves are likely to be found in the Reasi district. The mineral quantity for the blocks in Chhattisgarh, however, is not specified in the auction documents.

At present, India meets its lithium requirements entirely through imports.

The Ministry of Commerce and Industry data shows that the country's lithium imports for the fiscal year 2023 were about $3 billion (around Rs 24,900 crore), reflecting a surge of 58 per cent from the fiscal year 2022. The same data indicates that more than 95 per cent of these lithium imports come from Hong Kong and China.

Along with Argentina and Australia, KABIL is also actively engaging in talks with several other nations abundant in critical minerals, such as Bolivia and Chile.

The agreement for the exploration and development of five lithium blocks will support India's goal of achieving net-zero emissions by 2070. Additionally, it will help in positioning the country as a manufacturing centre for electric vehicles.

Lithium is widely utilized in numerous applications, most notably in the production of lithium-ion batteries.

These batteries are essential for powering an extensive range of devices, including smartphones, laptops, electric vehicles (EVs), and energy storage systems used for renewable energy sources such as solar and wind power.

Also, lithium is employed in certain medical treatments, ceramics, and as a component in aerospace technology.