From Bollywood to Batterywood: India's Lithium Love Story Begins
Recent significant discoveries of lithium deposits in Jammu and Kashmir and potentially Rajasthan have created a lot of buzz as can be seen here and here. This discovery has not just put India on the global lithium map, but it also opened a door to a future where India doesn’t just dance to the tunes of foreign oil or lithium imports, but rocks to its energy independence party!
What is all this fuss about?
Earlier this year, the Geological Survey of India (GSI) announced an estimated 5.9 million tonnes of inferred G3 resources of lithium have been discovered in the region of Jammu and Kashmir (J&K).?
More recently, there was announcement of a second large find in Rajasthan of even larger deposits than the ones found in J&K. Even though information about the Rajasthan find is scant, and some of the claims have since been debunked by the GSI, the excitement it generated indicates a potential for additional finds in this north-western state of India. Exploration work in Rajasthan has focused on tungsten deposits as well mineralization associated with brine salt lakes and rivers.?
This maiden find has the potential to meet a sizable portion of India’s demand for lithium, de-risk domestic lithium-ion battery and EV manufacturing and position India strongly in global supply chains. Given the importance of lithium for EVs, the stuff is being called “White Gold” of the 21st century.
Given the central role of lithium in powering electrification of industry and mobility, there have been questions about India’s security of supply. India is currently 100% reliant on import of lithium. In 2022, India imported over $2BN of lithium, of which more than half was imported from China. This substantial dependence, particularly on a geopolitical rival such as China, has raised strategic concerns.?
The situation is akin to substituting oil dependence on Saudi Arabia with lithium dependence on China.
The discovery of domestic lithium reserves heralds a hopeful shift towards?reducing this reliance and positions India among the top holders of lithium.
What’s G3 inferred resource and are we producing soon?
Even though 5.9 million tonnes is a big number – however it is currently classified as a G3 inferred resource. G3 inferred resource is not just some jargon, but it implies the preliminary nature of exploration done to date around this discovery and hence is a low-confidence number regarding the exact quantity and feasibility of extracting this lithium.
The above chart shows the UNFC classification system, where we are currently somewhere on the second from right row and are yet to establish the technical feasibility and environmental/economic viability. The goal is to reach the top-left of this matrix to be a production viable project, which is not an overnight process. It involves further stages of exploration and assessment. After the G3 stage, there's the G2 or general exploration stage, where the shape, size, and grade of the deposit are estimated, and then the G1 or detailed exploration stage, where the deposit's characteristics are established with high accuracy.?
Only after the G1 stage can a decision be made on whether to conduct a feasibility study for extraction and production. Given these extensive steps, it could potentially take several years before the J&K lithium deposits could be developed for production.
The Indian Ministry of Mines has spoken about starting an auction process later this year, with SB Capital Markets being named as a potential advisor to run the process. Bidders are likely to include both Indian and international majors, although it will be interesting to see whether players like Vedanta Group and Rio Tinto , both of whom have had challenges in India in the past, will participate.
Who are the beneficiaries?
Greater domestic production of lithium is a boon for an energy hungry country such as India and I believe the country will put these natural resources to good use. Lithium refining and battery manufacturing sectors are the most immediate to feel the benefit of competitively priced domestic supply. However, there are many other sectors and a growing number of players that stand to benefit from this domestic lithium supply.
Some perspectives are presented below.
Lastly, development of domestic lithium production also meets a number of over-riding goals of the Indian Government, including #cop26 commitments and progress towards net-zero emissions. This will also bring development to a lesser developed region that stands to benefit from new investment.?
But – India needs technology transfers!
Despite all the hype, lithium mining and refining is a new industry for India to develop. Current lithium finds are spread across different types of deposits, from rocks to brine, which require different processes to recover the metal.
The country has stated to develop partnerships with Australia as well as the lithium triangle countries (Argentina, Bolivia and Chile). To spearhead these efforts, three state owned entities have established a joint venture company Khanij Bidesh India Ltd (KABIL) to pursue participation in international projects.?
India has signed a number of agreements in this regard:
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Australia
Argentina
Bolivia
Chile
In pursuing these cooperation agreements, India is looking to replicate the success it has achieved in Refining and Petrochemicals sectors. While India may be resource poor, it does have a big market to offer the resource owners. This is a reason why multiple Middle Eastern National Oil Companies are keen in investing in downstream projects in the country.
But, if India is to replicate the success of those sectors in lithium, it needs to develop the missing piece – Technology. The resource is found in different sources from hard-rocks, mica, clays and brine, which require different forms of processing.
In South America, Indian companies will encounter brine-based lithium resources. The same is true for brine pools of Rajasthan and Gujarat. Traditional methods of extracting lithium from these sources involves evaporation ponds. In arid regions of Rajasthan and Gujarat water is already scarce and losing it to evaporation is not an acceptable solution. Companies, such as Coca Cola, have faced protests in the country for extracting excessive groundwater.
Therefore, for India to set up a dominant lithium processing industry, one that is capable of supplying both India and rest of the world, the country needs to urgently adopt and develop gamechanger technologies such as Direct Lithium Extraction (DLE).
DLE is a set of emerging technologies to extract metal from brine by using a combination of physical, chemical and electrical separation processes.?
Unlike evaporation ponds, which lose water and require multiple years to extract lithium, DLE is a much faster process requiring smaller operational footprint.
Being faster and nimbler than traditional methods, DLE has parallels in the role played by shale oil to significantly expand oil supply in the US. DLE has the potential to significantly increase the supply of lithium by increasing production/yield, reducing costs, improving project returns and scoring high on ESG credentials.
More information from FT here.
SunResin, a Chinese player, has gained an early lead and is currently scaling its technology both domestically and in Latin America. For India, it may not be feasible to partner with a Chinese company, a number of options exist to partner with companies from friendly countries.
The US is home to multiple companies developing advanced DLE technologies. India would do well to partner with some of these to get a jump-start on extraction and processing technologies.
For India to establish a dominant position, the adoption of advanced technologies is not just beneficial but crucial. As the world shifts towards EVs and renewable energy, the demand for lithium will continue to increase. Having technology capabilities, alongside a big domestic demand, will make India one of the most attractive countries to serve globally as a processing hub.
Investing in advanced lithium extraction technologies is a strategic necessity for India’s charged future.
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1 年Dear Mayank, by having reserves of lithium both in the form of brine and spodumene, the challenge for the development of lithium production in India will be to actually absorb these new DLE technologies, so that the impact, especially on the loss of water by evaporation in brine pools in arid regions not become a limitation for a rapid growth in battery production for EV's in India.
Techno-Economic Consultant [O&G,Pharma.Chem,Power]/HAZOP-leader; GrpOwner-"EPC Consultants Professionals"(+222K members)
1 年Battery may be future But EV market is in doldrums.
Researcher at RISE AB, Stockholm, focusing on dry electrode development and sustainable battery production.
1 年Thanks for this article. We as Indians are emotional and get carried away on a simple announcement related to national pride. Any new development needs atleast a decade to become commercially feasible. But we have to act fast to make sure, Indian battery industry doesn't become another oil industry to be import dependent. Atleast for currently market leading LFP battery technology, we will have all the resources locally available.
Urban Climate Technology | Sustainable Mobility and Batteries
1 年Mayank, Useful to have your insights on this. Curious if you can share more about the community impacts based on the location and size of the G3 discoveries? it’s still early days and perhaps the right moment for local community engagement to limit harms from traditional extraction
Chief Operating Officer
1 年Very insightful