On February 9, India’s Ministry of Mines made an announcement that in the Reasi District of Jammu and Kashmir, Almost 6 million metric tonnes of Lithium were found. The thing is, lithium is considered white gold. Everything that uses lithium-ion batteries—from the battery in your smartphone to electric vehicles—raises the price of lithium. It is now regarded as a very significant natural resource.

Metal lithium is very expensive. No matter the brand, every smartphone has a lithium-ion, lithium polymer, or other type of battery. Also, almost every electric car produced today, regardless of the manufacturer, uses a lithium battery. This is due to the lifespan of lithium batteries being almost ten times greater than that of other battery types, such as lead-acid batteries. They weigh about 50–60% less, and have higher efficiency so much so that for storing renewable energy, Power grids are also using lithium batteries.

It also mentioned that 51 mineral parcels, including gold and lithium, were given to state governments. One of the fundamental components of EV batteries is the nonferrous metal lithium.

In 11 states, including Jammu and Kashmir (UT), Andhra Pradesh, Chhattisgarh, Gujarat, Jharkhand, Karnataka, Madhya Pradesh, Odisha, Rajasthan, Tamil Nadu, and Telangana, there are 51 mineral blocks, according to the government. Among these 51 mineral blocks, five are associated with the gold industry, and the remaining blocks are associated with industries that produce goods like potash, molybdenum, base metals, etc.

The blocks were created using the work completed by GSI over the 2018–19 field seasons up to this point.

The EV boom’s catalyst: lithium?

For the first time in the EV era, lithium-ion battery prices rose last year, according to Bloomberg NEF. Elon Musk bemoaned the “insane” rise in the price of lithium and asserted that one of the biggest issues facing Tesla Inc. was the high cost of raw materials.

The central government has promised incentives worth at least $3.4 billion to speed up its sluggish EV adoption as Prime Minister Narendra Modi promises to attain net zero by 2070.

The theory is that by producing the most expensive component—batteries—locally, the final product will be more accessible to the general public and position India as a future exporter, taking advantage of the nation’s first lithium refinery and looking for nickel, cobalt, and copper assets abroad. China has taken control of much of it.

Before catching up, India still has a long way to go. In addition, it must compete with competing nations like the US, which is pushing for increased domestic battery production in an effort to undermine China’s market supremacy.

In India, almost $88 billion worth of lithium batteries and 1.7 billion worth of lithium metal was imported from other countries in 2020–21. And the global lithium market In 2021, its total value was about $600 billion. It is projected that by 2028, Its value would cross $1.3 trillion.

As more people switch to electric automobiles and away from gasoline and diesel vehicles, as solar and wind energy usage increases, coal power stations are being replaced, We will see a growth in lithium demand.

The Ecological Survey of India has put it in the G3 category of initial assessment. According to their claims, additional study and investigations are required before it can be placed in the G1 or G2 categories. They can be regarded as minable reserves whenever they fall under those criteria. The Ministry of Mines wouldn’t be able to determine the precise amount of lithium contained until after that.. how much of it could be extracted, it’s quality, But to reach this stage It can take up to 7–10 years.

Lithium in Karnataka

Karnataka is eagerly anticipating good news from Atomic Minerals Directorate for Exploration and Research (AMD) on its lithium reserves in Mandya district after hearing that the federal government is prepared to conduct commercial exploration of the rare mineral lithium in Jammu and Kashmir.

Following the hype surrounding the discovery of lithium reserves between 2020 and February 2021, the relevant authorities have made no notable progress in this area. In Karnataka, the latest development has sparked renewed optimism.

AMD has conducted preliminary surface and limited subsurface surveys that have revealed the existence of 1,600 tonnes of lithium deposits in the pegmatites of the Marlagalla Allapatna area in the Mandya district of Karnataka. (According to the economic times)

In some areas of the Karnataka district of Yadgir, a unit of the central government’s Department of Atomic Energy is also conducting lithium prospecting in possible geological domains.

Experts disagree, saying that economic viability needs to be determined. The government will benefit greatly if the lithium exploration is successful because the Indian vehicle industry is moving towards electric mobility.

The significance and quantity of lithium deposits in the Marlagalla-Allapatna area, Mandya district, Karnataka, may only be established after the conclusion of exploration in the entire area, according to Union Minister of State (Independent Charge), Atomic Energy and Space, Jitendra Singh.

Following the completion of technical, social, and economic feasibility assessments in the region, preparations for the commercial exploitation of the lithium resources can then be made.

Lithium Reserves in the World

The largest lithium reserves are in Chile, in South America. At 9.2 million tonne. Second, in Australia, at 5.7 million t tonne.  Does this mean that India is now in the second spot?

Not yet, because The reserve is still in the category of inferred resources. If you compare this logic, Bolivia has the largest lithium reserves in the category of inferred resources, The known global supply is 89 million metric tonnes. Even so, it means that in India, That’s a huge number.

If the top players in the lithium industry are compared, more than half of the global lithium reserves, are in three South American countries. Chile, Argentina, and Bolivia On the other hand, China is the number one player of producing lithium-ion batteries Of all the lithium batteries produced worldwide, more than 75% of it, are produced in China.

According to a recent study by an international energy agency China controls 58% of the lithium processing globally. In the second spot is Chile at 29%, and Argentina at the third with 10%. In terms of lithium extraction, Australia’s share is the highest at 52%. followed by Chile at 22% and China at 13%. It is interesting to note that China has not discovered many lithium reserves but lithium processing is the highest in China. They have focused so much on developing this industry.

There’s a high environmental cost to lithium mining. Similar to mining for other resources, Lithium mining produces water, soil, and air pollution too. The process of extracting lithium from its ores is water-intensive. A lot of water is wasted for this.

How will this impact the Indian economy and geopolitics?

This is the most interesting part Because if we work with these assumptions, The situation would be very similar to that in the Gulf countries that hit the jackpot when they found oil reserves. It is interesting to see that historically, reactions of various industries and its impact, when wholesome natural resources were found in any country. There are several positive examples of this. Apart from the Gulf countries, Oil was discovered in Norway, Australia, countries like Botswana and Rwanda, which developed a lot.

Economic impact on India:

Reduced Dependency on Imports:  India now imports the majority of its lithium needs from nations like Australia, Chile, and Argentina. The finding of local reserves will increase India’s energy security and decrease its reliance on imports.

Encouragement for the Electric Vehicle Industry: By 2030, India wants 30% of its vehicles to be electric. India’s electric car industry will benefit from the availability of native lithium reserves because it will lower the cost of making lithium-ion batteries greatly.

Creating Jobs: Lithium reserves development will lead to job openings in the mining and processing sectors as well as downstream opportunities in the manufacturing industry.

Increased Tax Revenue: The mining and processing of lithium reserves would result in increased tax and royal revenue for the Indian government.

Economic impact on World:

Increasing Lithium Supply: The finding of lithium reserves in India will result in an increase in the world’s lithium supply, which will aid in supplying the rising demand for lithium-ion batteries.

Price Drop: Because of the increased supply of lithium, lithium-ion battery costs will come down, making electric automobiles and other products powered by the metal more accessible to people throughout the world.

Competition for Current Producers: The introduction of a new competitor to the lithium market will increase competition for current producers, which could result in more innovative pricing practice’s.

Diversity of Supply: Risks to the supply chain have been raised as a result of the concentration of lithium reserves in a small number of nations, including Chile and Australia. The supply chain will be diversified and the risk of a supply disruption will be decreased by the finding of reserves in India.

For the Indian and world economies, the discovery of sizable lithium reserves in India is a game-changer. It will increase India’s electric vehicle industry, lessen its reliance on imports, provide job possibilities, and bring in money for the government. In addition, it will broaden the supply of lithium globally, bring down prices, spur competition, and diversify the supply chain. The finding of these reserves will have a big impact on the future of energy and transportation as lithium assumes more significance for the shift to a low-carbon economy.

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