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Home»Finance»India’s Discovery of Lithium Reserve Triggers Hopes, Worries
Finance

India’s Discovery of Lithium Reserve Triggers Hopes, Worries

February 16, 2023No Comments6 Mins Read
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India’s Discovery of Lithium Reserve Triggers Hopes, Worries
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On February 9, the Geological Survey of India confirmed that 5.9 million tons of inferred lithium resources have been established in Jammu and Kashmir. The announcement has generated mixed reactions in the country, triggering both hopes and concerns.

Lithium is one of the key components of batteries for electric vehicles (EVs), solar panels, and wind turbines. Energy experts and those in the EV sector believe that the lithium reserves will provide a major boost to India’s energy transition. Environmentalists, on the other hand, are concerned that mining in a geologically and ecologically sensitive region could lead to disastrous impacts.

The resources have been identified in the Salal-Haimana area of Reasi district in Jammu and Kashmir, known to be seismically active area. It is placed in seismic zone IV according to the Indian seismic zone map, meaning it lies in a high-damage risk zone. Multiple low-intensity earthquakes hit the district last August and September. It is also part of the fabled Kashmir seismic gap, where scientists have predicted a “great” earthquake of a magnitude of over 8 points on the Richter scale.

In February 2021, the Indian government announced spotting the “presence of Lithium resources of 1,600 tons (inferred category) in the pegmatites of Marlagalla–Allapatna area, Mandya district, Karnataka.” The Kashmir reserve, however, is larger and has created greater enthusiasm, curiosity, and apprehension. To put numbers in perspective, Bolivia, Argentina, Chile, and Australia – the countries with the world’s top four lithium reserves – have “identified lithium resources” of 21, 19, 9.8 and 7.3 million tons, respectively.

A February 2022 report by the India chapter of the World Resources Institute (WRI) said that the supply of minerals required for commercially available battery technologies being dominated by a handful of countries was a “bump in the road” for India’s expansion of the EV sector.

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While welcoming the news from Kashmir as “a good development,” Deepak Krishnan, associate director at WRI India, suggested that the country needs to “temper expectations,” as the deposit is being described as “inferred resources.”

“There are a few more stages of assessment before proper identification of the proven reserve,” he said. If the reserve ends up being substantial, it can help India reduce its import dependence on lithium and help the stationary battery system and EV battery industries.

“The focus must now shift to assessing the commercial extraction potential, while keeping in mind the local environmental and social sensitivities,” he told The Diplomat.

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Aarti Khosla, director of the Delhi-based Climate Trends, an advocacy forum, nearly echoed him. “The reserves are classified as being in the ‘inferred category,’ signifying its low level of confidence. Before going forward, there is a need to do a preliminary finding via actual extraction to check its feasibility, and convert this estimated resource to the exploitable category with a high degree of confidence level, and explore the chances of augmenting it,” she said.

Khosla added that the successful extraction of this reserve would give a big push toward the implementation of India’s electric vehicle expansion plans and can lead India to “a very strong position” by becoming atmanirbhar (self-reliant).

However, experts also pointed out that it generally requires 10 years or more from the time of establishing inferred resources to start actual mineral extraction. This means the new development does not offer India any relief in the short run, even though it may come in handy in around 10-15 years when EV demands are also expected to record a significant increase. Till then, India has to depend on importing the ore.

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In recent years, India has taken a series of measures to ensure access to lithium to enable its transition from fossil fuel-based vehicles to EVs as part of its climate change mitigation commitments.

The measures included forging a strategic partnership with the state-run mining enterprise of Argentina for the exploration and production of lithium there, signing a preliminary deal with Australia for the supply of critical minerals, including lithium, and signing a memorandum of understanding with Bolivia for developing Bolivia’s lithium deposits and supplying lithium, lithium carbonate, and cobalt to India.

According to Charith Konda, an energy analyst at the U.S.-based think tank, Institute for Energy Economics and Financial Analysis, developing a good exploration and production policy that allows the extraction and sale of these minerals in a commercially-viable manner is going to be a major challenge. Besides, India also needed to develop its own lithium refining capacity.

“Developing in-house battery-grade lithium refining capacity is critical to capture the value in the supply chain, as China currently controls more than 60 percent of global lithium refining capacity,” he told The Diplomat.

The WRI report mentioned earlier pointed out that countries like China, South Korea, and Japan import lithium concentrates and process them to produce lithium carbonate or lithium hydroxide. India, on the other hand, did not manufacture lithium-ion (Li-ion) cells till 2020, and these were imported from China or Taiwan for assembly in India. “India imported US$1.23 billion worth of Li-ion batteries between 2018 and 2019,” the report said.

Amidst all these hopes and planning, there are words of caution that should not be ignored either. Apart from the probability of major earthquakes, the area is prone to landslides, often claiming lives. Forests in the region are home to leopards, panthers, Himalayan black bears, foxes, wild goats, and wild cows.

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“If lithium mining projects are going to be pursued, there must be fair and thorough assessments of its effects on agricultural production, especially since the sector is already susceptible to climate change. It is also important to ensure we extract these materials as responsibly as possible, otherwise it mitigates the very reason for building these green technologies in the first place,” opined Shailendra Yashwant, senior adviser to Climate Action Network South Asia.

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It is up to the people of Jammu and Kashmir to ensure that the project does not happen “at the cost of the union territory’s fragile environment,” he wrote.

Making things a little more complicated, the Kashmir valley-based People’s Anti-Fascist Front (PAFF), which India’s home ministry recently banned for being associated with terror group Jaish-e-Mohammed, issued a statement soon after India’s lithium discovery announcement. They won’t allow “theft” and “exploitation” of Jammu and Kashmir’s resources, a PAFF spokesperson said.

Discovery Hopes Indias Lithium reserve Triggers worries
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