Khanij Bidesh India Ltd (KABIL), a collaboration of state-run mining companies, has finalised India's inaugural overseas lithium exploration and mining agreement. This landmark deal encompasses five blocks in Argentina, marking New Delhi's foray into global exploration for the vital mineral. The move aims to diminish China's dominant influence on a crucial component of the energy transition.
“The deal will help India strengthen lithium supplies, while developing lithium mining and downstream sectors of both the countries. It will also facilitate diversification of supply chain for critical materials towards achieving Global Net Zero goals," coal and mines minister Prahlad Joshi said after signing of the agreement.
According to the US Geological Survey, the worldwide lithium reserves stand at a mere 80.7 million tonnes. China, holding 80% of the global supply, contributes to nearly 54% of India's lithium imports. In the fiscal year 2020-21, India imported over Rs 6,000 crore worth of lithium, with Rs 3,500 crore sourced from China.
This agreement aligns with India's recent participation in the US-led Mineral Security Partnership (MSP), which focuses on expediting the establishment of varied and sustainable supply chains for critical energy minerals on a global scale.
MSP was created in 2021 as a bulwark against China’s use of its near-total control over the supply chain for coercive diplomacy. Critical minerals like lithium are crucial for energy transition as these are used in batteries for electric vehicles and items ranging from mobiles to laptops. Australia, Canada, Finland, France, Germany, Japan, Korea, Sweden, the UK, the US and the European Union are its members.