For India, China is like ‘Sharma Ji ka beta’. No matter what we do and how we do it, they are always giving us fierce competition. First, it was the race to secure oil supplies, then the rush to build solar equipment, and now it is the quest for lithium. Hell, it seems like we are now even competing in terms of who will have a fiercer power crisis!
But jokes apart, why are we rushing to secure more lithium?
The Need For Lithium
Look around you. Most of the devices you are surrounded by: your phone, laptop and digital camera, run on lithium-ion batteries. Also, the world is finally realising that climate change is real. And so, most countries are trying to go green and reduce their dependence on fossil fuels. How? By turning to lithium.
You see, lithium is the new oil. It is used in batteries for electric vehicles. And, EVs are expected to account for half of all cars on the roads by 2040.
It can also be used to store excess energy and power electric grids that run on renewable energy, making them more reliable.
So, lithium really can do it all. Seems like maybe lithium is the real Sharma Ji ka beta, no? But why are India and China struggling to secure more of it?
For starters, it is clear that lithium is going to be “the” energy resource of the future. And everyone wants to own a piece of the future, make sure they have enough supplies to last them decades.
China's Lead
For now, it seems like China is ahead in this race too. Not only does it have 4.5 million tonnes of lithium reserves, but it is also the world leader in the lithium-ion battery supply chain.
It controls 80% of global raw material refining, 77% of cell capacity, and 60% of global component manufacturing of lithium-ion batteries. It also imports lithium from Australia and has managed to get mining concessions in countries like Chile, Bolivia, and Argentina, which hold the world's largest lithium resources.
China recognised the importance of lithium early on and set out for global domination. But what is India doing to catch up?
India's Move
Currently, India is heavily reliant on China for lithium-ion battery supplies. In fact, the amount of money spent on lithium battery imports has increased from $383 million in 2016 to $929 million in 2019 (almost 2.6x in 3 years).
But because of the geopolitical tensions between the two countries, continued reliance on China might not be a great idea.
So, the government of India has launched expeditions to look for lithium reserves in several states like Arunachal Pradesh, Andhra Pradesh, Chhattisgarh, Jharkhand, Jammu & Kashmir, and Rajasthan. These efforts have borne fruit and India has found its first-ever lithium reserves in Karnataka this year, which amount to 1,600 tonnes. Looks like a lot? Well, compare this with Bolivia's 21 million tonnes of lithium reserves!
Along with this, the government has also undertaken the Khanij Bidesh India Ltd or the KABIL program. Under this program, India has signed an initial agreement with Argentina to secure lithium supplies.
But this is not all. It has also launched a production-linked incentive scheme worth Rs. 18,100 crores, which will incentivise battery makers to manufacture lithium-ion batteries in India.
These efforts have caused two battery plants to spring up in India, the TDSG plant in Gujarat and the Epsilon Advanced Materials plant in Karnataka.
These efforts might look good, but they're not good enough when placed next to China's.
And so, India is already gearing up for the next round.
Alternatives for Alternative Energy
Lithium is a finite resource which is widely distributed. So it requires continuous exploration, which slows down the rate of its supply.
However, the demand for lithium is constantly increasing and the world will need five times more lithium than is currently being mined to meet the global climate targets of 2050. Woah. What are we gonna do when it runs out?
Don't worry, you won't be forced to live in a dystopian world without electronics. At least, we hope not.
To make up for inadequate lithium supplies, India is working to develop alternative battery sources using more commonly available materials like aluminum. India’s Reliance Industries is also working on developing solar cells, advanced battery storage systems, and hydrogen fuel cells. But it is yet to be seen how successful these alternative sources are and if they can help us replace lithium-ion batteries.
Will India make a breakthrough discovery and emerge as a global powerhouse?
Only time will tell… Until then, ReadOn.
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