The story so far: The Union Ministry of Mines announced on Thursday, February 10, that lithium reserves had been found in Jammu and Kashmir, a first in the country. The Geological Survey of India established 5.9 million tonnes of inferred lithium resources in the Salal-Haimana area of Reasi District in Jammu and Kashmir.

Officials in the Union Territory said the discovery could boost the manufacturing of rechargeable batteries for electric cars, smartphones, and laptops and cut India’s dependence on lithium imports. ​​Currently, India is completely import-dependent for minerals like lithium, nickel, and cobalt.

Why is lithium so important?

This grey, shiny, non-ferrous metal is the lightest and the least dense of all metals. Being the third element in the periodic table after gases hydrogen and helium, the alkali metal lithium is highly reactive. Multiple countries have ramped up efforts to find reserves of lithium, sometimes dubbed ‘white gold’, in what has been called the “new era gold rush”. From about 500,000 metric tonnes (MT) of lithium carbonate equivalent (LCE) in 2021, the demand for lithium is expected to reach three million to four million MT in 2030.

In January this year, the U.S government announced loans worth $700 million to a metal producer to build a lithium mining project in the State of Nevada. As the European Union attempts to bolster its own supply of lithium, European Commission President Ursula von der Leyen said last year that “lithium and rare earths (elements) will soon be more important than oil and gas.”

So, why is lithium in such demand? Besides being used in batteries to power smartphones, laptops and other gadgets, lithium is an essential component in the rechargeable batteries that run electric vehicles (EVs) and in storage batteries for energy from renewable sources.

As countries move toward clean energy technologies to meet their Paris Agreement climate pledges, the transition to electric vehicles is key as vehicular pollution accounts for a significant proportion of carbon emissions. The U.S. plans to make 50% of its new vehicle fleet electric by 2030. The EU in October approved a ban on the sale of new petrol and diesel cars from 2035. India has also set a target of 30% sales penetration of EVs in private cars and 80% in two- and three-wheelers by 2030.

In 2019, the Nobel Prize in Chemistry was given to John B. Goodenough, M. Stanley Whittingham and Akira Yoshino for their contributions to the development of the lithium-ion battery. Lithium is used in electric car batteries because of its properties— lightness and energy density.

A lot of energy needs to be stored for machines that move, like cars.The battery must also not be impractically heavy and thus consuming even more energy. Lithium became ideal as it is extremely energy dense, storing a lot of energy for a given weight, and also lightweight. Its lightness and reactivity also makes it ideal to facilitate the smooth flow of electrons from the negative to the positive electrode in a battery.

Today, lithium is an essential part of virtually all electric vehicle batteries and those used in consumer electronics. While some new mixes like sodium ion batteries are being developed, lithium ion batteries are expected to remain the dominant battery chemistry as the EV industry burgeons to meet climate targets and demand. For instance, one of the larger EV makers, Tesla’s Model S, contains 16 battery modules with several li-ion batteries in each module.

While lithium is also used in ceramics, in industrial grease, and in the pharmaceutical sector, its potential demand is expected to be largely driven by batteries. McKinsey notes that compared to 2015, when just about 30% of lithium demand was driven by batteries, with ceramics and industrial material accounting for the rest, by 2030, batteries are expected to account for 95% of lithium demand. This is evident in the record high prices of lithium ($75,000/tonne) in 2022

Where are the world’s lithium reserves?

While lithium is not in short supply, the process of its extraction is time-and infrastructure-intensive. Lithium is currently extracted from two main sources—hard rock mines or as brine from salt flats and lakes, from where it is recovered using evaporation tanks.

According to the U.S. Geological Survey, while identified lithium resources worldwide stood at 89 million tonnes at the start of 2022, the reserves or mineable parts of the resources stood at 22 million tonnes. Half of the world’s lithium resources are concentrated in Latin America (mostly Bolivia, Chile, and Argentina), Australia, and China. In 2021, almost 90% of lithium mining happened in Chile, China, and Australia, with Australia leading production.

As countries seek to meet their targets for vehicle fleet transitions and EV makers move to secure supply, the rush to find lithium reserves has intensified. While counties with newly identified lithium resources seek ways for extraction, those with no domestic resources are attempting to forge deals with partners or buying mines in other countries. Some automakers have or are planning to enter the mining of minerals like lithium and nickel themselves.

What do we know so far about the lithium resources inferred in Jammu and Kashmir?

Currently India is fully import-dependent when it comes to lithium. While the Centre has launched incentives for battery manufacturing in India, raw materials like lithium have so far been imported. In 2020-21, India imported ₹173 crore worth of lithium metal and ₹8,811 crore worth of lithium batteries. In 2022, between April and November alone, ₹164 crore worth of metal and ₹7,986 crore worth of batteries were imported. This means that if the currently established lithium resources by the GSI are confirmed, India could see its dependence on imports go down significantly.

However, it is important to understand where the findings currently stand. The GSI has “inferred” that the deposits in Kashmir could hold a whopping 5.9 million tonnes of lithium. This is the G3 level of surveying. As per the United Nations Framework Classification (UNFC), a basic, reconnaissance survey is called ‘G4’; the next step is ‘preliminary exploration’, which is called G3. Then comes general exploration, or G2. And when quantities associated with a known deposit “can be estimated with a high level of confidence”, the stage is called G1.

According to the Ministry of Mines, the GSI has carried out 19 projects in the last five years on “lithium and associated elements”. Of these, three of the projects have progressed from the G4 to the G3 level, and one to G2. These are in the Reasi district of J&K (the newly discovered estimate), and in Sirohi district and Nagaur district of Rajasthan. The one that has progressed to the G2 classification is the Rewat Hill block, also in Rajasthan.

A lot of steps are involved before India could become a producer of Lithium. First, the GSI would have to conduct further exploration to determine if there are mineable reserves in the estimated 5.9 million resources in Jammu and Kashmir. This would be followed by tendering and environmental clearances for mines. At present, India also does not have lithium extraction technologies.