The discovery of lithium reserves inferred by GSI about 5.9 million tonnes in the Salal Haimana area of Reasi district of J&K created a sense of eureka among the EV market players and also among various Govt’ and non-institutional players. Ipso facto- waning of oil reliant energy market has created a vacuum for a more sustainable energy source, hence Lithium- The new oil.
Lithium- a non-ferrous, silvery white alkali metal forms the backbone of Solar, electric vehicle as well as battery powered modes of public transportation. It is said that by 2030, approximately 30 to 40% of homes and private modes of transportation will be Lithium battery powered (net metering system). This can be gauged from the fact that only in US market alone there was an annual increase of 7% from past two years in EV market (~EV Hub).
The inferred resource confirmed by GSI on Feb 9 this year with G3 classification as per GSI means there is a substantial chance of exploration. In 1999, there was a similar report by GSI scientists KK Sharma and SC Uppal who had said “the prospect of lithium appears to be promising”. The report was a continuum of the earlier report by MR Kalsotra in 1992.
The Indian Story
India intends to achieve net zero emissions by 2070. The geo-economic interplay of world market with the dominance of US and Chinese companies with almost 80% of the market capture has resulted in frequent trade wars between the US and India at various ministerial conferences at WTO. The punitive trade sanctions claim by USTR on Indian Solar industry at WTO met with vigorous response from Indian side as well, but India had to align to global market norms and change her policies as the raw material (Lithium) supply chains were dominated by US and China.
The 2.3 billion USD that India spent on the import of Lithium along with almost a 100 billion USD on crude oil which put a huge burden on our current account would be mitigated, but unlike comparing apples with apples, lithium and crude oil are a perfect substitute to meet the rising clean energy demands.
As per USGS (United States Geological Survey) the global lithium reserves are pegged at 80 million tonnes and are mostly concentrated mostly in the ‘Lithium Triangle’ of the world. Chile, Bolivia and Argentina contain 70% of the reserves of the world. With these limited known reserves, and due to non-availability of continuous supply-the price of lithium has sky rocketed by almost 120% in just two years. According to Bloomberg the industry spot price was at 3 billion USD in 2020 and touched almost 35 billion USD in 2022.
The Indian Solar as well as EV felt the heat of the surge in the prices. This led to the failure of National Solar mission as the Govt’ was unable to achieve its intended target of 100GW of solar energy by 2022. The Energy matrix of India is heavily poised towards thermal with almost 70 of energy requirements coming from the coal fired thermal power plants which if continued for another decade would’ve forced to extend the deadline for net zero emissions by another decade or two.
The enlightened end of the tunnel
The 5.9 million tonnes of inferred lithium reserves would put India as the 7th largest reserve holder in the world. The atmanirbharta in terms of achieving its SDG 7 (Clean and affordable energy for all) will become a reality. The target of converting 30% total transportation of India into Electric vehicles by 2030 under FAME scheme will get the much needed impetus provided the mining and extraction –done only with due environment assessments are expedited to meet the needs of the industry.
The net zero emissions target by 2070 will get the much needed boost while reaping the benefits of comparative advantage. The sufferings of ‘premature deindustrialisation’ as per Turkish economist Dani Rodrik that India encounters will find a panacea in terms of local availability of raw material and will make her leapfrog into AI driven 4th Industrial revolution due to dominance of Indian EV and Solar Market. The overreliance on China for technology (Batteries) shall be over and with the entry of India into the global EV market-the prices of EVs shall become dearer.
J&K – at the cusp of industrialisation
The erstwhile state of J&K –now a UT is predominantly a horticultural economy with almost 60% of population directly or indirectly being dependent on agriculture and allied sectors. The absence of any industrial grade raw material had rendered it from becoming a potent force in industry which was also due to its geographical location. Now, with the discovery of Lithium in the respective UT and also mining being a state subject, now the onus lies on the administration of J&K to expedite the process in consultation with major industry players so as to give desired boost to the reeling economy of the state.
The unemployment rate of J&K is almost 21% which is among the highest in the country. The mining operations need to be tailored to meet the demands of the youth of J&K and also with the fragile ecosystem of the Himalayan state. As the brine extraction technique is heavy dependent on water- the scarce resource in the era of climate change.
The mining operations need to be backed with end to end, in house development of battery industry with viability gap funding from the state and appropriate subsidies to give boost to the manufacturing sector. The MSME sector needs to be rejuvenated with at least 5% budgetary allocation for R&D in line with global standards. State and central universities should open sector specific courses to meet the demands of the industry. Jammu University along with University of Kashmir should be engaged with the industry to come up with state of art solutions for the country and the entire world.
(Author is Pursuing Honours in Political Science from University of Delhi. He is also a member at Kashmir Writers Association and can be reached at: Email ID. [email protected])
