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Jammu and Kashmir Lithium Block
Context: The Ministry of Mines was forced to scrap the auction for the lithium block in Jammu and Kashmir’s (J&K’s) Reasi district for the second time following a weak investor response.
More in news/ About lithium ore deposit in Kashmir:
- This auction was undertaken nearly 18 months after the discovery of an “inferred”deposit of 5.9 million tonnes of lithium ore, pitched as among the largest deposits in the world, in Reasi last February.
- Critical Minerals are being auctioned in the country for the first time.
Reasons for lack of Investor Interest:
- Difficulties around extracting and processing lithium from hard rock pegmatite deposits — like the ones found in Reasi .
- Underdeveloped mineral reporting standards used in tender documents played a significant role in deterring investors.
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- Bid document having limited information of the block to the block being too small “to apply modern mineral systems-based tools”
- No beneficiation study had been conducted to assess the feasibility of extracting and processing lithium from the resources identified in J&K.
- Inadequate Economic Assessment: India’s United Nations Framework Classification for Resources(UNFC)-based resource classification fails to provide sufficient information on the economic viability of lithium mining.
Key Issues with Current Classification
- Economic Viability: The UNFC does not provide sufficient clarity on the economic aspects of mining a mineral block.
- This lack of economic certainty discourages private investment in the sector, as companies are unable to ascertain the potential returns on their investments.
- Comparison with CRIRSCO Standards:
- Unlike the UNFC, the Committee for Mineral Reserves International Reporting Standards (CRIRSCO) template requires detailed reporting of economically viable reserves with a high degree of geological confidence, confirmed through studies at least to a pre-feasibility level.
- This level of detail is essential for attracting private investment.
- Need for CRIRSCO Alignment: Mining experts advocate for India to adopt CRIRSCO-aligned standards, which would enhance transparency and provide clearer guidelines for economic assessments.
- The Indian Mineral Industry Code (IMIC), developed in 2019 and recognised by CRIRSCO, aims to address these issues but has not yet been fully implemented.
Status of other lithium deposits in India:
- Mines Ministry successfully auctioned off India’s first lithium block in Chhattisgarh’s Korba district.
- Manipur – Kamjong district .
- In Ladakh’s Merak block, very close to the border between India and China..
- Expected : lithium exploration in Assam’s Dhubri and Kokrajhar districts.
- Currently India is fully import-dependent when it comes to lithium
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- In 2020-21, India imported ₹173 crore worth of lithium metal and ₹8,811 crore worth of lithium batteries.
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- So far, India has depended on Australia and Argentina for lithium imports.
Iron ore reserve in Kashmir:
- 5.9m tonnes of the element had been discovered in Jammu and Kashmir.
- The Geological Survey of India found the lithium reserves in the Salal-Haimana area of Reasi district in Jammu and Kashmir.
World level:
- 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.
- In 2023, China signed a $1bn (£807m) deal to develop Bolivia’s vast lithium reserves, which are estimated at 21m tonnes and the largest in the world
Challenges:
- While lithium is not in short supply, the process of its extraction is time-and infrastructure-intensive.
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- 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.
- Lithium is currently extracted from two main sources—
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- Hard rock mines or as
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- Brine from salt flats and lakes, from where it is recovered using solar evaporation tanks.
- Process of mining lithium is not environmentally-friendly.
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- After it is mined, it is roasted using fossil fuels, searing the landscape and leaving behind scars.
- The extraction process also requires a lot of water and releases large amounts of carbon dioxide into the atmosphere.
- Efforts to explore lithium in Kamjong district of Manipur were stalled due to resistance from locals in the area on environmental grounds.
- High Extraction Costs: The expensive nature of lithium extraction makes clear economic assessments crucial, especially as global lithium prices have fallen.
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- According to the World Bank, the value of crucial minerals will need to increase by 500% to meet global climate targets by 2050.
Importance of Lithium/‘white gold’,
- The grey, shiny, non-ferrous metal is the lightest and the least dense of all metals.
- Lithium is used in electric car batteries because of its properties— lightness and energy density.
- The demand for lithium is expected to reach three million to four million MT in 2030.
- Lithium is a key component in rechargeable batteries that power numerous gadgets like smartphones and laptops, as well as electric cars,and in storage batteries for energy from renewable sources.
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- Discovery could aid India’s push to increase the number of private electric cars by 30% by 2030.
- Lithium is increasingly being used for lithium ion batteries. By 2022, around 80%of lithium consumption was for batteries.
- Lithium is also used in ceramics, in industrial grease, Glass industry,as a coolant in nuclear fusion or nuclear fission reactors and in the pharmaceutical sector.
Way Forward :
The government can choose to skip the auction process and reserve the area for the undertaking of prospecting or mining operations through a government-owned company, as allowed under the Mines and Minerals (Development and Regulation) (MMDR) Act.
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- Government companies as per section 17A of MMDR Act to develop and mine the critical minerals for the country on priority.
- Budget 2024-25 has the following provision for the development of critical minerals.
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- Critical Mineral Mission to be set up for domestic production, recycling of critical minerals, and overseas acquisition of critical mineral assets.
- Fully exempt 25 critical minerals from custom duties.
