INDIA’S MASSIVE LITHIUM RESERVE – A BOON TO AUTO INDUSTRY?

India announced discovery of 5.9 million tonnes of lithium reserves located in Salal-Haimana area of Reasi district within the region of Jammu and Kashmir. The nonferrous metal is a key material for the lithium-ion batteries used most often in electric cars and for storing energy from renewable power generators like solar and wind. India is preparing to extract and refine raw lithium and will begin lithium auctions to private operators. This will reduce its dependence on mineral imports from other countries, accelerate the development of the country’s electric vehicle sector and enjoy a newly opened avenue for India to meet its internal clean-tech and clean-energy goals.

Exhibit-1

Where the reserve has gone? Lithium, as well as the first and second lightest chemical elements (hydrogen and helium, respectively), are the only elements created at the birth of the universe, according to NASA. However, according to the Big Bang Theory, the universe should hold three times as much lithium as can be accounted for in the oldest stars, an issue called the missing lithium problem. This missing lithium discovery was first made in the 1980s, according to Pasquale Serpico, a cosmologist at the National Centre for Scientific Research (CNRS) and the University of Savoy Mont Blanc in France. It created an argument, Serpico said, between what the Big Bang data and the observations of stars were telling researchers about lithium's abundance.

Researchers recently found a giant star holding 3,000 times more lithium than normal giants, reported in August 2018 in the journal Nature Astronomy. They came up with two possible explanations: the giant star swallowed its planet, absorbing the onboard lithium, or, the lithium may have formed inside the star, reaching its surface before the heat of the deep layers vaporized it.

Where Lithium is used? Lithium-ion batteries are the key to lightweight, rechargeable power for laptops, phones, electric vehicles (EVs) and other digital devices. According to the U.S. Geological Survey, Argentina and Chile increased their lithium production 15 percent each in 2014 alone to meet the growing demand. Worldwide, production jumped 6 percent that year.

Lithium-ion batteries are currently used in most portable consumer electronics such as cell phones and laptops because of their high energy per unit mass relative to other electrical energy storage systems. They also have a high power-to-weight ratio, high energy efficiency, good high-temperature performance, and low self-discharge. Most components of lithium-ion batteries can be recycled, but the cost of material recovery remains a challenge for the industry. Most of today's all electric vehicles use lithium-ion batteries, though the exact chemistry often varies from that of consumer electronics batteries. Research and Development are on to reduce their relatively high cost, extend their useful life, and address safety concerns in regard to overheating.

Will sure do!!

Greenbushes in Australia has the largest lithium production, 40% of the 55,000 tonnes of lithium mined in the country in 2021, but there are several others close behind. In total, there are four other hard-rock lithium operations in Western Australia's legacy mining regions around Kalgoorlie in the east and the Pilbara in the state's far north. A sixth – the only lithium mine outside Western Australia – is an open-cut mine near Darwin in the Northern Territory, which began operation in early October 2022. Two other mines are in planning with other proposals at various stages of development.

Their combined output allowed Australia to supply roughly half the world's lithium in 2021. Its next biggest suppliers are Chile and China, which both draw their lithium from brine pits. Over the next few years this is expected to change as the countries in South America's lithium triangle – Chile, Argentina and Bolivia, which together hold the majority of the world's known lithium resource – boost their production. Chile currently holds more than 40% of the world's reserves. Next in terms of resources is Bolivia with 24% of the world's reserves, and Argentina with 21%, though neither yet contribute significantly to global production. As anticipated, Australia continues to lead in Lithium exports.

Top five known reserves account for 16.2 million tonnes. Chile has the world’s largest known reserves with 8 million tonnes, followed by Australia’s 2.7 million tonnes, Bolivia’s 2.5 million tonnes, Argentina’s 2 million tonnes and China’s 1 million tonnes.

Above is a magnified cut out of the larger global lithium mines map shown earlier as Exhibit-1. The map has several dots, each dot is an operational mine area. The numbers on the dots are the areas located in different countries. You can see the upper half consisting primarily of India, Afghanistan and China, dotted with numbers 66 to 76. India does not figure in these dots as evident from the Table on the right; lithium being found only in China and Afghanistan. Australia is in the lower half with dots 77 to 87 and has an abundance of lithium.

So now India has got the mine, what next? Not everyone is so bullish. Villagers in Reasi, the lush Jammu district where the lithium is found, told they worry about the destructive potential of largescale lithium mining on the glacier-packed Himalayan Mountain ranges. Residents are of the opinion that the introduction of miners and machines could lead to government land grabs thus displacing the population. Many have brought these concerns to government officials - additionally voicing fears that security needs for mineral operations will bring more trouble in the region.

Electric Vehicle is the future. But the Indian government is keen to bring on the table benefits of the resources as quickly as possible. One could be reminded of Delhi’s pledge to reach net zero carbon emissions by 2070 made at the 2021 United Nations Climate Change Conference (COP26). India will have to significantly boost electric vehicle (EV) adoption and become an alternative to China as a producer of lithium-ion batteries, both for domestic consumption - India is the world’s fourth largest auto market - and for eventual export. If successful, India could replicate its success in exporting low displacement motorcycle and scooters to the developing world.

Until now, one of the key long-term challenges to India’s aspirations appeared to be raw lithium sourcing. Strikingly, country now has domestic resources capable of meeting current and future demand. Prime Minister’s Office (PMO) has established an ambitious target of energy self-sufficiency for India which is able to satisfy only a small fraction of its oil consuming demands guided by domestic production (16.5 %): a figure which is considerably less than that of China (27.4 %) and Europe (28 %).

Geology of Lithium. In young landscapes of South America, lithium is found at the bottom of crusted salt lakes at high altitudes. Geology of Australia is more ancient with its lithium bearing pegmatite deposits found across the county, in chunks of landmass that collided over hundreds of millennia to form the continent of Australia. These regions include the Pilbara and Yilgarn cratons (continental rocks that have been stable for over a billion years) in Western Australia, Pine Creek Province in the Northern Territory, the Georgetown region in Queensland and central Victoria.

Raw lithium gets refined after mining. The refining process carries environmental risks as it is energy sapping and chemically intensive. However, the process of extracting lithium is not much different than other forms of metals mining.

Search for Lithium. When an economically viable resource is identified, the surface is cleared, the earth is scraped away, the rock blasted and the rubble hauled off for processing into concentrate.

Each hard rock deposit is its own unique beast. At a higher-grade deposit, you dig up less rock compared to lithium produced. That is the economy.

The World knows that we need to decarbonise as soon as possible and critical minerals like lithium and a whole heap of these are part of that pathway. But we also know the mining of these minerals is environmentally destructive.

How lithium found in India is different. Lithium found in India is of a higher grade. Against the normal grade of 220 parts per million (ppm) the lithium found in Jammu and Kashmir is of 500 ppm plus grading. With 5.9 million tonnes stockpile it will surpass China in its availability.

The Lithium market and India going forward. India currently imports all of its lithium-ion batteries from China, Hong Kong, Indonesia and Vietnam and spent INR 267,000 million on these imports from 2018-19 through 2020-21. Imports will continue till the domestic reserve is fully commercialised.

Leverage. We have an ace up our sleeves. No chance will be given to fumble as these advances are intricately related to gaining global leadership, one must sharpen its wits as this very talented nation is approaching demographic sweet spot – one of the many pillars identified by World Economic Forum necessary for gaining economic superiority – and marching towards being the best.

Suggested reading: Please visit www.cheekychatur.com for an engrossing take on India’s Demographic Sweet Spot written by the same author.