India's Second Lithium Reserve in Rajasthan: Reducing Dependency on China?

India's dependency on China for manufacturing mobiles, laptops, electric vehicles (EVs), and other chargeable batteries may reduce significantly, as experts and mining officials believe after India's second lithium reserve was discovered in Rajasthan's Degana town.

The Geological Survey of India (GSI) and mining officials claim that the capacity of the lithium reserves found in Rajasthan is higher than those discovered in Jammu and Kashmir earlier this year.

India, the third-largest vehicle market in the world, has set an ambitious target of increasing the penetration of electric vehicles (EVs) by 30% by 2030. To achieve this target, the country focuses on increasing domestic lithium production, a key component in EV batteries. India is currently heavily dependent on imports of lithium, mostly from China, which has been a cause of concern for the country's policymakers.

The discovery of lithium reserves in India also has significant implications for the country's potential as an EV manufacturer. Union Minister Nitin Gadkari has stated that India can become the world's number one automobile manufacturer in the EV segment if it uses the lithium reserves found in Jammu and Kashmir. India is the third-largest vehicle market in the world after China and the USA, beating Japan.

India's Dependence on China for Lithium

So far, India has been dependent on China and expensive foreign supplies of lithium. In 2020-21, India imported lithium worth more than ₹6,000 crore; of this, more than ₹3,500 crore worth of lithium was bought from China, according to IANS. However, with the second reserve found in Rajasthan, China's monopoly in the global market is believed to change. Around 80% of India's total demand for lithium can be met from Rajasthan's deposit.

Lithium's Role in Green Energy

Lithium is the world's softest and lightest metal, needed by battery-powered devices. It is soft enough to be cut with a vegetable knife and light enough to float when put in water. It stores chemical energy and converts it into electrical energy. Also known as 'White Gold', lithium attracts a massive demand in global markets as the metal is present in every chargeable electronic and battery-powered gadget.

The global value of one ton of lithium is around ₹57.36 lakh. According to a World Bank report, the global demand for lithium metal will increase by 500% by 2050. At a time when the world is witnessing a dynamic shift in the energy sector - from fuel to green energy - lithium becomes a sought-after asset for countries.

The metal is also widely used to manufacture wind turbines, solar panels, and EVs - the leading carbon-neutral alternatives for the future. A lithium battery is the only alternative for EVs since it has a high power-to-weight ratio, enabling it to provide a large charge while keeping the vehicle's curb weight low.

According to mining officials, the lithium deposit found in Rajasthan will help India reduce its import from China and help it become self-sufficient in green energy.

The History of Lithium Reserves in Rajasthan

Lithium reserves in Rajasthan have been found in the Renvat hill of Degana and its surrounding area, where tungsten mineral was once supplied to the country. During British rule, officials discovered tungsten mineral in 1914 on the hill. Before independence, the tungsten produced in the region was used to make war material for the British Army during World War-1. After independence, it was also used to make surgical instruments in the energy and health sector. Between 1992-93, China's cheap export policy made tungsten from the region very expensive. Eventually, the production of tungsten was stopped.

The hill, which supplied tungsten and contributed to the country's economic growth for years, went deserted in a single stroke. During that period, offices, houses, gardens, and schools built by the officials of GSI and other government agencies also turned into ruins. With the newly-discovered lithium deposit, the fate of the hill and the country is set to change, as per officials.

Challenges ahead

As India heavily depends on lithium imports, the reserve can be a game changer for the country. However, there are several challenges that need to be resolved to make this happen.

Restricted List of Department of Atomic Energy

Lithium, along with seven other metals, falls under the restricted list of the Department of Atomic Energy, forbidding private players from mining or producing them. The government attempted to modify the law last year to permit private miners to extract lithium. However, the question of who will bid and mine the reserves remains.

Lack of Expertise and Mining Firms

India does not have the expertise or any company in the lithium mining space. As there are no existing lithium mines in the country, mining firms in India lack experience in that field. Thus, they will have to work with international companies or get into joint ventures to mine and process the reserves.

Expensive Mining Proposition

Mining lithium is an expensive proposition. According to a report by S&P, the average total cash cost of operating 11 hard-rock lithium producers was pegged at $2,540 per tonne of LCE in 2019. Experts say this cost will be over $2500-3000, excluding capital investments.

Environmental Impact

Mining lithium is also environmentally challenging. The production per tonne of LCE emits 2.8-9.6 tonnes of CO2. Moreover, the production of one tonne of lithium could require approximately 500,000 gallons of water. Sustainable mining practices need to be followed to avoid negative environmental impacts such as soil degradation, water scarcity, tailing dams, and water flow disruptions.