Informist, Tuesday, May 21, 2024
--Coal India official: Considering buying lithium mine in Argentina
--Coal India official:May set up lithium extraction unit in Argentina
--Coal India official:Need local partner for lithium mine in Argentina
--Coal India official: Plan fincl viability study for Argentina mine
--Coal India official: Argentina mine buy to be govt-to-govt deal
By Avishek Rakshit
KOLKATA – State-owned Coal India Ltd is considering buying a lithium ore block in Argentina and may set up an extraction plant there if it is found viable, a company official aware of the development told Informist. If the plan sees the light of day, it could help India's lithium battery manufacturers such as Exide Industries Ltd and Amara Raja Energy Mobility Ltd secure raw material supply.
"Argentina holds the world's second-largest lithium reserves and thus is being considered for lithium block exploration and extraction," a senior company official told Informist. "But the plan is at a very preliminary stage now, and no final decision has been taken. There are various things which are involved in this and multiple things, including financial viability, will have to be first considered before making any move."
As per laws in Argentina, Coal India will have to partner a local company if it wants to go ahead with the project.
Argentina's lithium reserves are estimated at 19 mln tn, accounting for 20% of the world's overall lithium reserves of 98 mln tn. Bolivia holds the largest reserves, estimated at 23 mln tn, and Chile's estimated reserves of 9.3 mln tn are the third-largest. China accounts for 41% of Argentina's total lithium exports and Japan accounts for another 31%. South Korea accounts for 13% and the US 9%.
In 2023-24 (Apr-Mar), India imported 117,381 tn of lithium. The country's import bill for the metal was $33.4 mln. The imports were mainly from trading companies in Southeast Asia and China. There were no imports from Argentina, Bolivia or Chile.
Although lithium ore was recently discovered in India, companies are unwilling to venture into extraction. After the weak participation at the lithium block auctions in November, the government now plans to invite fresh bids for mines in Jammu & Kashmir. Coal India has already evinced interest in mining lithium in Jammu & Kashmir as well as in Jharkhand.
According to the company official, the ore-metal ratio for lithium is 48:1, which means for every 48 tn of ore mined, 1 tn of lithium can be extracted. "So, we will need the right technology and right set of skills if we go ahead with lithium extraction."
The Indian government has asked state-owned Coal India, NMDC, and ONGC Videsh to actively scout for critical mineral assets overseas. Such minerals include lithium, cobalt, copper, graphite, gallium, and others used in technology-intensive sectors.
In January, the government had signed an initial agreement with Argentina for a lithium exploration and mining project. Under the agreement, government-owned Khanij Bidesh India Ltd will collaborate with the Argentine government-owned Catamarca Minera Y Energetica Socieded Del Estado to evaluate and explore lithium in five blocks across 15,703 ha in the Catamarca province. Khanij Bidesh India is a joint venture between state-owned companies National Aluminium Co Ltd, Hindustan Copper Ltd, and Mineral Exploration and Consultancy Ltd.
For this project, an initial budget of 2 bln rupees has been sanctioned by Khanij Bidesh India. Coal India was not part of this agreement.
"If we at all move with the lithium project in Argentina, it will be a government-to-government initiative and since India and Argentina already have an agreement in place, it could ease exploration and allocation of lithium mine for us as well," the Coal India official said.
The official added that options such as shipping the lithium ore to India and setting up an extraction plant in Argentina were being considered, and a decision would be taken based on financial viability. "Shipping of the ore to India will involve substantial shipping costs and setting up an extraction plant (in Argentina) will involve huge capital expenditure. So, only after a financial viability study is conducted can we know which route to take, but I think an extraction plant is more viable," the official said. Setting up an extraction plant is estimated to involve an investment of 300-400 bln rupees.
"We will decide on the financial viability study at an appropriate time," the official said.
Shipping the ore to India involves substantial expenses on a regular basis. Considering the ore-metal ratio of 48:1, Coal India will have to ship 48 tn of ore from Argentina to extract 1 tn of lithium in India.
The Coal India official said that as lithium battery capacities were being set up in the country extensively to primarily cater to the electric vehicle and mobile phone manufacturing industries, sourcing of the raw material had become important.
In the past, Coal India had ventured into Mozambique and Australia to secure coal mines, but the plans did not fructify. The company had also decided to venture into the aluminium sector in India, but discarded the plan after it failed to secure a bauxite mine in Odisha through the nomination route as opposed to the tender or bidding route. Coal India did not find the bauxite mining project to be financially viable.
As part of expansion and diversification, Coal India is currently setting up solar and thermal power capacities in the country. At 0944 IST, shares of Coal India were at 484.0 rupees on the National Stock Exchange, up 3.0% from the previous close. End
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