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No white gold rush: Why curiosity in Kashmir’s lithium reserves is lukewarm

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It’s a routine yearly train that doesn’t entice a lot consideration, however GSI officers knew issues could be totally different this time. They had chanced on one thing no person may ignore.

The company shared 16 geological studies and 35 geological memorandums with state governments protecting 51 mineral blocks throughout 11 states. Further, it additionally handed over 17 studies of coal and lignite with complete sources of seven,897 million tonnes (mt) to the ministry of coal.

But one report overshadowed every thing else. The GSI, for the primary time, had established lithium reserves of 5.9mt within the Salal-Haimana space of Reasi district in Jammu and Kashmir. The discovering was primarily based on exploration carried out by the company within the shadow of the pandemic in 2020-21 and 2021-22. In one stroke, this put India among the many prime 10 international locations with lithium reserves.

The affect was speedy. At least half a dozen firms mentioned they have been excited by creating the dear useful resource.

Suitors included high-profile names comparable to Sajjan Jindal’s JSW Group. Jindal informed the Financial Times in April 2023 itself that he would “100% bid for the lithium blocks” a declare he would reiterate in March 2024. Hindalco Industries, Ola Electric, Vedanta Group and Shree Cement have been among the different events.

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Sajjan Jindal, the chairman of JSW Group.

State-run Coal India Ltd, ceaselessly trying to diversify past coal, additionally confirmed curiosity. In its annual report for 2022-23, the corporate mentioned: “We are exploring the acquisition of lithium, cobalt, and nickel belongings overseas and have amended our Memorandum of Association (MoA) to incorporate non-ferrous and important minerals. We are at present figuring out appropriate abroad belongings for mergers and acquisitions.”

Buoyed by such curiosity, the federal government moved rapidly. Critical minerals, together with lithium, have been off limits for personal miners within the nation again then. In August 2023, the foundations have been amended to let non-public miners bid for these sources. By November, the stage was cleared for public sale of the useful resource. The reserves put up for bidding in Kashmir have been amongst 20 blocks comprising minerals price an estimated 45,000 crore.

“For the primary time ever, now we have recognized a vital and deep-seated mineral. We haven’t simply recognized however now we have additionally put it up for public sale immediately,” mentioned Prahlad Joshi, former minister of mines, on 29 November 2023.

Lithium is a vital element within the world struggle in opposition to local weather change and types the bedrock of the batteries that energy industries comparable to power, shopper electronics and transport.

The lack of bidders on the public sale, which ended within the second half of January, was a sobering actuality test. The reserves in Kashmir acquired solely two bids, forcing the federal government to cancel the public sale—lower than three bidders makes the method invalid. Mint couldn’t confirm the id of the 2 bidders—the federal government doesn’t reveal the names in case of a failed bid.

Lithium is a vital element within the world struggle in opposition to local weather change and types the bedrock of the batteries that energy industries comparable to power, shopper electronics and transport. The steel’s demand has zoomed within the final decade, incomes it the moniker ‘white gold’, and is ready to multiply manifold over the approaching years.

For an import dependent economic system like India, the invention of the reserves is an enormous deal, justifying the hype round its discovery. Why then is the trade reluctant to stroll the speak?

 Prahlad Joshi, the former minister of mines.

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Prahlad Joshi, the previous minister of mines. (X)

Unproven Reserves

The largest issue deterring most firms from the bidding course of is that the reserves are unproven and extremely speculative. There are 4 levels of exploration for any mineral deposit—G4, G3, G2 and G1—as categorized by the United Nations International Framework Classification for Reserves/Resources (UNFC-1997). The reserves in Kashmir are categorized below G3, the second stage of preliminary exploration, after reconnaissance.

G3 findings are inferences about mineral sources, the place amount, grade and mineral content material have been estimated with a low degree of confidence. Following this, geologists undertake extra intense exploration to succeed in the G2 stage of normal exploration, after which the ultimate G1 stage of detailed exploration. It can take years to a long time to get from one stage to the following.

The deposits in Kashmir, for instance, have been first mapped and reported by the GSI 1 / 4 century in the past, in 1999. This was the G4 stage. It has taken practically 25 years to get to G3 from that stage. In the following stage, G2, extra research are performed to estimate the minerals’ form, measurement and grade. The course of will get expedited from one stage to the following however nonetheless takes years. The last G1 stage of detailed exploration, the place traits of the deposit are established with a excessive degree of accuracy, is when the mineral is any nearer to precise extraction.

“International expertise reveals it takes, on common, 16.5 years from the invention of vital minerals to manufacturing. In addition, J&Okay’s sources are at present at an inferred G3 stage, so additional exploration shall be wanted to find out the extent of the reserves which can be economically recoverable,” mentioned Siddharth Goel, lead, power programme on the International Institute of Sustainable Development (IISD).

Typically, bidding is most intense for G1 minerals, so the shortage of bidders comes as no shock for consultants inside the mining group.

International expertise reveals it takes, on common, 16.5 years from the invention of vital minerals to manufacturing.
—Siddharth Goel

“Bidding for sources with preliminary exploration is taken into account very dangerous as there isn’t any certainty both on the amount or high quality. Companies discover it tough to place a good worth of the useful resource primarily based solely on GSI’s assumptions,” mentioned B.Okay. Bhatia, further secretary, Federation of Indian Mineral Industries (FIMI), an trade physique.

Lack of Know-how

The different large motive for the tepid curiosity is lack of technical know-how inside the trade on the subject of mining lithium. Most of the lithium being mined globally immediately is discovered both within the type of brine—accumulation of saline groundwater enriched in lithium—in South America, or within the type of onerous rock, in Australia. The lithium in Kashmir is neither brine nor onerous rock however clay deposits combined with different minerals, together with bauxite. Commercial-scale extraction and manufacturing of such deposits is but to be examined globally.

“While the expertise for extraction of lithium from hard-rock and brine deposits has matured, the expertise for extraction from clay deposits stays untested globally. Given these challenges, the J&Okay lithium block acquired lower than three bids,” mentioned Girishkumar Kadam, senior vp at Icra, a score company.

India’s home mining trade is basically made up of native firms, together with public sector undertakings. Multinational corporations comparable to Rio Tinto and BHP have tried to enter the market however with little success. Their absence has resulted in an absence of technical experience, particularly within the space of exploration and prospecting.

“Global mining firms haven’t had an excellent expertise in India. We public sale our mines right here not like the ‘first come, first served’ system adopted by most different mineral-rich international locations like Australia and Canada. Global corporations are usually not very comfy with this given the uncertainties and dangers concerned in mining,” mentioned Hanuma Modali, managing director, Deccan Gold Mines, a gold exploration firm.

Sensitive Location

A 3rd stumbling block is the placement itself. Situated 50 kilometres from the road of management within the nation’s most politically risky state, Kashmir is likely one of the least mined areas within the nation. Added to that, the Himalayas are an ecologically fragile mountain vary because the land subsidence in close by Ramban earlier this yr and Joshimath in Uttarakhand final yr present.

Lithium mining can take a heavy toll on the atmosphere—it takes about 2.2 million litres of water to extract one tonne of the steel. Any mining efforts run the chance of resistance from not simply the inexperienced foyer but additionally the native inhabitants.

“Large useful resource discoveries in ‘peripheral’ areas removed from the capital and locus of presidency energy are sometimes politically destabilizing, particularly when these sources are found in areas dominated by ethnic or non secular teams that face important discrimination,” mentioned Cullen S., senior fellow on the Peterson Institute for International Economics, a Washington-based suppose tank.

Lithium is the Future

There is not any denying the significance of the comfortable shiny gray steel that each nation is hankering for immediately. Due to its capability to pack power, lithium is the important thing element in batteries that energy trendy home equipment, starting from smartphones, laptops and smartwatches to wearables and tablets. Beyond home equipment, the steel has functions in different industries, comparable to the facility sector, the place it helps stationary grid storage for photo voltaic and wind power and transport for electrical autos (EVs).

With no manufacturing within the nation, this can be a large deficit space for India. Lithium-ion imports shot up from simply $94 million in 2014-15 to just about $3 billion in 2023-24 (see desk). This is just the beginning and as demand for electronics, renewable power and electrical autos (EVs) rises, so will the clamour for lithium.

According to the International Institute for Sustainable Development (IISD), a Canada primarily based unbiased suppose tank, demand for lithium in India is anticipated to develop from simply 1,634 tonnes in 2022 to between 60,000 and 93,000 tonnes by 2050 (see desk). Currently, the buyer electronics sector accounts for greater than half of this demand, however this may change in future. The large driver might be EVs. From below 25% immediately, EVs may account for practically 75% of the demand.

“The estimated demand of vital minerals like lithium, nickel and cobalt is half of the reserves which can be already recognized and economically recoverable immediately. Therefore, the abundance of those uncooked minerals doesn’t restrict a easy transition to EVs. However, native discovery, just like the one in Kashmir, is essential as a consequence of strategic causes,” mentioned Amit Bhatt, India managing director, International Council on Clean Transportation (ICCT), an American suppose tank.

“While the invention is nice information, additional exploration is required to raised perceive the standard and amount of the deposit, and establish whether or not the fabric could be mined economically utilizing the processes out there immediately,” said Bhatt.

Where does all of the lithium come from proper now? While the South American lithium triangle of Bolivia, Chile and Argentina accounts for greater than half of the worldwide reserves, manufacturing is concentrated in Australia, Chile and China. But having the useful resource and mining isn’t sufficient. Lithium additionally must be refined and that’s the place China has a stranglehold, accounting for two-thirds of world’s refining capability.

Not surprisingly, round 75% of imported lithium ion in India comes from China. Alongside mining the reserves in Kashmir, India would additionally must arrange enough refining capability to be actually self-reliant.

“India might want to safe entry to capital and expertise to extract lithium in addition to construct processing and refining infrastructure,” said Goel of IISD. “The uncertainty surrounding the scale of the reserves, coupled with the long-time lag before production commences, means that India cannot be complacent in sourcing lithium externally to meet its clean energy manufacturing ambitions.”

Even if every thing finally falls into place, will probably be years earlier than lithium manufacturing takes off in India. But will probably be a begin.

A file photo of a lithium deposit in La Corne, central Quebec.

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A file picture of a lithium deposit in La Corne, central Quebec. (AFP)

Second time fortunate?

Fortunately, regardless of the failure of the public sale within the first spherical, neither the federal government nor the trade has given up on Reasi. The reserves have been listed once more within the third tranche of auctions (for vital minerals) that concluded final month. In the run as much as the auctions, senior leaders of the trade once more made constructive noises.

“We have taken the paperwork for lots of the mines which can be coming…the auctions are occurring. We have an interest, now we have checked out lithium, graphite, nickel and copper, which appears to return with nickel in some mines,” Satish Pai, managing director of Hindalco Industries, informed Moneycontrol in February 2024, lower than a month after the failed lithium public sale.

“Mining is part of JSW Group’s exercise and lithium is essential. We will definitely take part when the federal government comes for the auctioning of those mines,” group chairman Sajjan Jindal mentioned as soon as once more, in March.

With the brand new authorities in, the outcomes of the lithium public sale may probably be one of many first large bulletins. When that occurs, Kashmir’s white gold might lastly have some prospectors.

Mint reached out to the Vedanta Group, Hindalco, JSW Group and Shree Cement for his or her feedback however didn’t obtain any response.

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