India is also in the process of setting up a strategy to set up KABIL's offshore office in the city of Catamarca, to coordinate with provincial regulatory authorities
The government plans to sign exploration and development agreements with the Argentine government for five lithium blocks identified by Khanij Bidesh India Ltd (KABIL) in Catamarca province.
The Center will invest around Rs 200 crore over five years in the exploration and development of these mines. Business standard has learned.
“The talks are in the final stages and a proposal has been submitted to the Cabinet Committee on Economic Affairs for approval,” said government officials aware of the development.
After Australia, this is India's second attempt to sign a foreign partnership for procurement of crucial minerals. In 2022, India signed a memorandum of understanding with Australia's Critical Minerals Facilitation Office (CMFO) to explore five blocks: two for lithium and three for cobalt.
The agreement between India's KABIL – a joint venture focused on acquiring and commercializing strategic minerals abroad for delivery in India – and Catamarca Minera Y Energética Sociedad Del Estado (CAMYEN), a state-owned mining and energy company in Catamarca, in the pipeline.
India is also in the process of devising a strategy to set up KABIL's offshore office in the city of Catamarca to coordinate with provincial regulatory authorities.
“Participating in the exploration and extraction of critical minerals in Argentina requires significant time and constant supervision. The establishment of KABIL's offshore office is a strategic step to protect and uphold our interests,” said a senior official.
Argentina, with 21 percent of the world's 98 million tons of lithium reserves according to the United States Geological Survey's (USGS) Lithium Statistics and Information 2023 report, ranks second after Bolivia. These reserves are concentrated in salt flats in the provinces of Catamarca, Salta and Jujuy, part of the Lithium Triangle.
India's involvement in Argentina is driven not only by its vast lithium reserves, but also by the cost-effectiveness of mining lithium from salt lakes compared to hard rock mining, making it commercially viable.
India's pursuit of lithium blocks in Argentina strengthens its drive for clean energy self-reliance. India launched its first auction of critical minerals on November 29, with two lithium blocks in Jammu, Kashmir and Chhattisgarh available for bidding.
According to government estimates, Reasi district block in Jammu and Kashmir has around 5.9 million tonnes of lithium reserves. The quantity for the Chhattisgarh blocks has not been specified in the auction documents.
Currently, India is completely dependent on imports to meet lithium demand. In FY23, lithium imports stood at around US$3 billion (about ₹24,900 crore), up 58 per cent from FY22, according to Ministry of Commerce and Industry data.
More than 95 percent of India's lithium imports come from Hong Kong and China.
In addition to Argentina and Australia, KABIL is in talks with countries rich in crucial minerals, including Bolivia, Chile and others.
The deal for five lithium blocks will advance India's goal of achieving net-zero emissions by 2070 and becoming an electric vehicle manufacturing hub.
Lithium is crucial in the production of lithium-ion batteries, which power devices such as smartphones, laptops, electric vehicles (EVs) and energy storage systems for renewable energy sources such as solar and wind energy.
Lithium is also used in medical treatments, ceramics and space technology.
First print: December 24, 2023 | 5:40 PM IST