India signs an agreement to acquire five lithium mines in Argentina.

Syllabus: GS-II

Subject: Governance

Topic: Government policies and interventions for development in various sectors.

Issue: Acquisition of Lithium Reserve.

Context: Khanij Bidesh India Ltd (KABIL) signs a historic agreement to acquire five lithium brine blocks in Argentina from Catamarca Minera Y Energética Sociedad Del Estado (CAMYEN).

Synopsis:

  • KABIL, a government company, initiates the first-ever lithium exploration and mining project, covering approximately 15,703 hectares in Catamarca province.
  • Deal termed historic for both India and Argentina, reinforcing India’s commitment to a resilient and diversified supply chain for critical minerals, crucial for industries.
  • Argentina, part of the “Lithium Triangle,” holds 20% of the world’s lithium resources, making it a key player in the global lithium market.

Significance for India

  • Enhances India’s standing in the electric vehicle (EV) and renewable energy sectors, aligning with its goal of achieving net-zero emissions by 2070.
  • India currently meets 100% of its lithium demand through imports, with over 95% coming from China and Hong Kong. The exploration agreement aims to reduce dependence on foreign sources.
  • This marks India’s second international partnership for critical minerals, following a memorandum of understanding with Australia’s Critical Minerals Facilitation Office in 2022.
  • The exploration and development deal aligns with India’s clean energy goals and aspirations to become a manufacturing hub for electric vehicles and lithium-ion batteries.
  • The acquisition aims to ensure a resilient supply chain for critical minerals, essential for various industries, enhancing India’s strategic resource security.
  • In addition to international acquisitions, India has initiated domestic critical minerals auctions, emphasizing the importance of self-reliance and sustainability.

Background:

India’s Lithium Reserves:

In a move toward securing the supply chain, India also initiated its inaugural critical minerals auction drive on November 29. Two lithium blocks in Jammu and Kashmir and Chhattisgarh were made available for bidding.

The Reasi district block in Jammu and Kashmir holds approximately 5.9 million tonnes (mt) of lithium resources, as per government estimates.

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Conclusion: India’s KABIL acquiring a lithium reserve signifies a historic move securing critical resources. This bolsters India’s strategic position in the global lithium market, aligning with clean energy goals.

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