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Lithium reserves found in Jammu and Kashmir put on bidding block

By Nitin Kumar
May 03, 2023 18:21 IST
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The central government is expected to complete the auction of the 5.9-million tonne (mt) lithium reserves discovered in the Reasi district of the northern Union Territory (UT) of Jammu & Kashmir (J&K) by the end of this calendar year, Union Mines Secretary Vivek Bharadwaj said on the sidelines of the launch of the Federation of Indian Chambers of Commerce and Industry (Ficci) report on ‘New-Age Energy Minerals’ on Tuesday.


Photograph: Agustin Marcarian/Reuters

“Auction will be over by the end of this year,” said Bharadwaj, adding, “We have already recommended a transaction advisor to the J&K government for the auction of lithium reserves.”

However, the exact timeline for an auction will be decided by J&K authorities, Union mines minister Pralhad Joshi said in Parliament last month.


Asked when the transaction advisor would be selected, Bhardwaj said, “J&K authorities have to take a call on the appointment of the transaction advisor.”

Apart from lithium, the government is also exploring sapphire in the region, the secretary added.

Lithium was discovered by the Geological Survey of India in the UT in February this year.

The non-ferrous metal falls under the critical earth resource category and was not available in India so far.

Lithium is required to fuel India’s energy transition target, as it is a key component to manufacture lithium-ion (Li-ion) batteries used in electric vehicles (EVs), as well as battery storage.

It will help the country in meeting its ambitious target of achieving 30 per cent EV adoption for private cars, 70 per cent for commercial vehicles, and 80 per cent for two- and three-wheelers by 2030.

Apart from the use in EVs, lithium is also critical for harnessing solar power and wind energy — key aspects of India’s efforts to move towards its low carbon growth path in the pursuit of reaching carbon neutrality (net-zero emission goal) by 2070.

The auction of lithium blocks is of strategic importance as it will give India energy independence.

Currently, the country meets the lithium demand through 100 per cent import.

India imported Li-ion worth Rs 8,811 crore, with more than 95 per cent of it coming from Hong Kong and China, reveals commerce ministry data.

Of the 98 mt of lithium resources, only 26 mt was treated as reserves (ready for use) globally.

Of these 26 mt of reserves, 70 per cent reserves are with Chile (36 per cent), Australia (24 per cent), and Argentina (10 per cent), according to Ficci’s New-Age Energy Minerals report.

Apart from J&K, the Marlagalla area of Mandya district in Karnataka is the only other place where lithium reserves were discovered.

Limited subsurface exploration by the Atomic Minerals Directorate for Exploration and Research has shown the presence of lithium resources of 1,600 tonnes (inferred category) in Karnataka.

The auction will also help resolve India’s refining industry challenge. Currently, India does not have a lithium refining unit.

The winning bidder will also have to set up a local processing plant.

China controls around 75 per cent of the world’s lithium refining capacity.

To unlock the sector’s potential, Bharadwaj emphasised the need to open the sector to private players, encourage domestic exploration, and adopt efficient technologies.

He also touched upon the challenges faced by the offshore mining industry and noted that the government is taking decisive steps to amend the Offshore Areas Mineral (Development and Regulation) Act, 2002.

“I think the government is in the process of amending the Offshore Areas Act that was put in public domain for consultation.

"The consultations are now over, and it will be shortly debated in Parliament,” he added.

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