It’s a promising news for the electric vehicle industry
Lithium has been dubbed the “white gold” of the 21st century and, despite the cliche, it accurately depicts its value and controversy. For companies that rely on it, it has become a major headache. This is especially true for the automotive industry, which needs a reliable supply to support the growing demand for electric vehicles. As a result, manufacturers have pursued various strategies, including direct sourcing from mines.
In a surprising turn of events, India has announced the discovery of a massive lithium deposit in Jammu and Kashmir, which is being touted as the “white gold” of the 21st century. The Ministry of Mines of India recently confirmed that the Geological Survey has located around 5.9 million tons of lithium in the Salal-Haimana area of the Reasi district. The news has already gained international attention, indicating the high demand and value of this material. However, it should be noted that the deposit is still considered a “G3 inferred resource” and requires further investigation.
The Times of India newspaper reports that the “G3 inferred resource” label suggests that there are still key issues to be investigated, such as tonnage or content, and the estimates are not yet fully reliable. UNECE also states that there are other stages to be considered. If the calculations are correct, the deposit could put India on the international map. Local media and the EFE agency suggest that India could have the world’s seventh-largest deposit. Currently, Bolivia has the largest identified resource with 21 million tons of lithium, followed by Argentina with 19 million, and many other countries with smaller deposits.
The data comes from the US Geological Survey (USGS), which in a report published in January 2022 with global data, clarifies:
“Thanks to continuous prospecting, identified lithium resources have increased considerably worldwide and amount to about 89 million tons”.
So what’s next? According to NDTV in New Delhi, the Geological Service already presented a report in the mid-90s that suggested a possible deposit in the area, but it went unnoticed.
“The prospect of lithium seems to be quite promising,” the report stated.
Now, after the Ministry of Mines’ announcement, there are several challenges to overcome. The first is to continue studying the deposit to determine its quality and quantity. Second, and crucially, is to plan for its future.
According to Vivek Bhardawaj, the Secretary of Mines, the auction of the lithium deposit in Jammu and Kashmir should be managed by the administration of the region. He emphasized that once the private sector gets involved, the process of excavation can begin. Previously, India had been importing lithium from Australia and Argentina, but with the discovery of this deposit, the country may become more self-sufficient in terms of lithium supply. In 2021, smaller deposits were also found in Karnataka.
The transition to electric models in the automotive industry has increased the demand for lithium due to its strategic importance for the technology sector, particularly for batteries. India has also joined this “green revolution” that aims to phase out combustion vehicles, which are more polluting, at least in theory.
India has set an ambitious target to have 30% of private cars and 70% of commercial cars running on electric power by 2030, in a bid to move away from more polluting combustion vehicles. However, the Ministry of Industry has reported lower implementation rates. To address this, the government has implemented measures to incentivize electric vehicle purchases and has entered into agreements with Australia, Argentina, and Chile to ensure a stable supply of lithium. The newly discovered deposit in Jammu and Kashmir could help India achieve its goal of self-sufficiency in the production of lithium. Minister Pralhad Joshi has emphasized the importance of the discovery in supporting the government’s objectives.
Considering the environmental aspect, the discovery of the lithium deposit can have a positive impact on India’s efforts to meet its climate change targets. The increased production and usage of electric vehicles is expected to reduce the emissions from traditional gasoline and diesel vehicles. IUST Professor of Earth Sciences, Shakil Romshoo, speaking to the Great Kashmir newspaper, sees this as a significant step towards meeting international obligations on climate change. However, he also emphasizes the potential environmental costs of the extraction and exploration work involved in mining lithium, which has affected similar projects in other parts of the world.
Lithium, often referred to as “white gold,” is highly coveted by the industry due to its importance. This explains the astronomical rise in the value of lithium and why some major companies in the automotive sector are searching for the best way to ensure its supply. They are doing so by investing in mining companies, starting mining operations, or securing priority purchase agreements for the future.
“In 2022, Musk commented on the exorbitant levels of lithium prices, stating that Tesla might have to engage in large-scale mining and refining if costs do not improve. Although lithium can be found almost anywhere on Earth, the rate of extraction and refinement is slow,” he said.
