Policy Watch: India accelerates its critical minerals policy
India signs landmark Argentina lithium mining deal.
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Several Bridge India Members had the opportunity to meet new Telangana Chief Minister Revanth Reddy last week. Pictured above are Natasha Carr (Senior Lecturer in Midwifery) and Helen McIntyre (Associate Midwifery Professor) from Birmingham City University, who got the opportunity to present the hardback edition of the book India at 75, Thoughts and Reflections to the Chief Minister.
India will auction nearly 100 more blocks of critical minerals before February 2024, according to the Coal and Mines Minister last month. India launched the first part of its critical minerals auction worth an estimated Rs 450 billion ($5.41 billion) at the end of November.
Last week, it also signed a historic lithium mining deal in Argentina. This could be a game changer for India’s COP commitments and its transition to Electric Vehicles. Scroll down for more.
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Policy Watch: India accelerates its critical minerals policy
One of the big policy wins India can boast of over the decade has been its climate leadership internationally. It’s commitment to phasing out new petrol, in favour of electric, vehicles, for example, is far ahead of the UK. It’s been a leader of the Global South in climate change talks.
One area of India’s backroom diplomacy that has changed in the last couple of years has been a focus on energy security with relations to critical minerals.
The Argentina deal
Last week, India bought exploration and production rights to lithium blocks in Argentina in its first such overseas deal, aimed to reduce dependency on China for the key green technology metal. Coal and Mines Minister Pralhad Joshi said the "historic" $24 million deal with state-owned Khanij Bidesh India and Argentina’s state-owned Camyen SE will ensure a "resilient and diversified supply chain for critical and strategic materials".
The world's fastest-growing major economy, India imported $33 million worth of lithium in 2022-2023, according to government figures. More than two-thirds was imported from China.
Deepening cooperation with Australia
Australia has one of the largest sources of lithium in the world, a country with India has significantly deepened defence and security cooperation in the Asia Pacific. The India-Australia Comprehensive Strategic Partnership (2020), upgraded from the bilateral strategic partnership of 2009, was an effort to broaden and deepend the scope of this relationship.
Following PM Anthony Albanese’s visit to India a year ago, the Australia-India Critical Mineral Investment Partnership was extended, with five target projects were identified - two lithium and three cobalt - to build a sustainable supply chain between India and Australia for battery materials.
India’s first lithium deposits, in Jammu & Kashmir
In February 2023, India found its first lithium deposits in in the Salal-Haimana area of the Reasi district in J&K, with estimated reserves of 5.9 million tonnes. This makes India the seventh-largest source of lithium globally. On 2 August 2023, the Parliament passed the Mines and Minerals (Development and Regulation) Amendment Bill, 2023, to attract private sector investment in exploring deep-seated and critical minerals.
Why this matters
Argentina, Chile and Bolivia, together holds more than half of global lithium resources, followed by Australia and now India.
China has 8% of the world’s lithium reserves and also controls mines and operations outside its territory. It has over half of the world’s lithium refining capacity, giving it a stranglehold on the global supply chain. In 2010, China blocked the supply of rare earths to Japan as retaliation for arresting Chinese fishermen.
The Coal & Mines Minister Prahlad Joshi, announced in November 2023 that India will auction nearly 100 more blocks of critical minerals before February 2024. India launched the first part of its critical minerals auction worth an estimated Rs 450 billion rupees (US$5.41 billion).
So India is aiming to reduce its dependency on China. The Coal & Mines Ministry has been a lot more visible at international critical minerals conferences in the recent past than ever before. Last week’s Argentina deal may be the first of many such announcements over the coming months.
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The Bridge India Team
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