GS Paper I

News Excerpt: 

India is close to an agreement to acquire five lithium exploration and development blocks in Argentina, with talks in the "final stages."

Key points:

• The agreement will be signed between Khanij Bidesh India Ltd. (KABIL) and Catamarca Minera Y Energética Sociedad Del Estado (CAMYEN). 
• CAMYEN is a state-owned mining and energy company in the Argentine province of Catamarca.
• The Centre will also invest around Rs 200 crore over five years for the exploration and development of these mines.
• After Australia, this is India’s second attempt to sign a foreign partnership for sourcing critical minerals. 
• In 2022, India signed a memorandum of understanding (MoU) with Australia's Critical Minerals Facilitation Office (CMFO) to explore five blocks — two dedicated to lithium and three to cobalt.
• India is also strategising to set up KABIL’s offshore office in Catamarca to streamline coordination with provincial regulatory authorities.
• Engaging in the exploration and extraction of critical minerals in Argentina will require considerable time and ongoing oversight.

Reason for the acquisition of lithium mines in Argentina

• India is engaged in talks with Argentina because its salt-lake lithium provides a cost-effective extraction method compared to hard-rock mining. 
• This makes it commercially appealing and contributes significantly to production.

• India’s efforts in Argentina to secure lithium blocks will propel its quest for self-reliance in meeting clean energy demands. 
• 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.
• As per government estimates, Reasi district (Jammu and Kashmir) holds approximately 5.9 million tonnes (mt) of lithium reserves. 

Current statistics about lithium in india

• Currently, the country meets the lithium demand through 100 percent import. 
• According to the Ministry of Commerce and Industry data, India's lithium imports in FY23 amounted to roughly $3 billion (approximately ₹24,900 crore), marking a 58 percent increase from FY22.
• The data also reveals that over 95 percent of India’s lithium imports originate from Hong Kong and China.

Significance of such acquisitions

• The exploration and development agreement for five lithium blocks will aid India’s objective to attain net-zero emissions by 2070 and establish itself as a manufacturing hub for electric vehicles.

• Lithium finds extensive use in various applications, particularly in the manufacturing of lithium-ion batteries. 
• These batteries power a wide array of devices such as smartphones, laptops, electric vehicles (EVs) and energy storage systems for renewable energy sources like solar and wind power.
• lithium is employed in certain medical treatments, ceramics, and as a component in aerospace technology.

Conclusion:

Hence, India’s recent agreement with Argentina for the acquisition of lithium reserves will pave the path to India's clean energy targets.