Days after the Geological Survey of India (GSI) discovered 5.9 million tonnes of lithium reserves in Jammu and Kashmir, the Central government is set to invite bids for the auction of the country’s first Lithium reserve.
According to a Mint report, the bids will be invited by the centre in the first quarter of June this year.
This comes after the Geological Survey of India, for the first time found Lithium inferred resources (G3) of 5.9 million tonnes in the Salal-Haimana area of Reasi District of Jammu & Kashmir earlier this month.
Citing a government official, Mint reported that like any other government auction, this will also be open to all, with one key condition: “The government will mandate that lithium is refined only in India and not sent abroad for processing.”
It is pertinent to note that India does not have a Lithium refining facility. The Modi government, on the other hand, has already set a target of having EV sales account for 30% of private automobiles, 70% of commercial vehicles, and 80% of two- and three-wheelers by 2030, citing an urgent need to decarbonize the transportation sector.
Back in 2021, Nitin Gadkari, the Union Minister for Road Transport and Highways, stated that India would be able to reduce its consumption of crude oil by 156 million tonnes, or Rs 3.5 lakh crore, if electric vehicle penetration reached 40% in the two-wheeler and car segment and close to 100% in the case of buses by 2030.
UNFC classification
Notably, the United Nations Framework Classification (UNFC), a three-dimensional approach that takes geological, feasibility, and economic considerations into account, is used to analyze the assessment of the mineral concession. The four stages of the geological axis are reconnaissance (G4), prospecting (G3), general exploration (G2), and detailed exploration (G1).
According to UNFC, the G3 category or inferred resource is described as amounts associated with a recognized deposit that can be approximated with a low degree of confidence. Resources that can be approximated in terms of quantity, grade, or quantity based on geological evidence, sparse sampling, and reasonably presumed, but unconfirmed, geological and grade continuity is referred to as inferred resources.
Lithium- ‘White Gold’
Lithium is a soft, silvery-white metal that has earned the moniker “white gold” due to its great demand in the global energy markets. Lithium serves a variety of purposes and is an essential part of the electrochemical cells used in the batteries for electric vehicles, laptops, smartphones, and other electronic gadgets.
The discovery of a lithium resource in Jammu and Kashmir can help India meet its goals of decreasing emissions and reaching net zero by 2070. This can be achieved by providing Lithium, a vital component for electric car batteries.
It is worth noting that while “reserves” are a subset of resources that are economically viable to extract, “resources” refers to an approximate quantity of a geological commodity in discovered and undiscovered deposits.
According to International Energy Agency (IEA), the world could face a Lithium shortage by the year 2025. Amidst a significant rise in demand for electric vehicles, India can play a crucial role by addressing the global shortages.
As per a World Economic Forum (WEF) report, Lithium supply is constrained not just by rising demand but also by resources concentrated in a few regions and the fact that more than half of current production takes place in regions with significant water stress. Notably, the “Lithium Triangle” countries of Argentina, Bolivia, and Chile hold an estimated 60% of global lithium reserves.
According to a report by the Central Electricity Authority (CEA), India would have a battery storage capacity of 27,000 Megawatts by 2029–30. If India manages to deal with the challenges ahead, this discovery of the Lithium reserve can prove to be a game-changer for India.
