Three PSUs are joining force to create a front to acquire rare earths like Lithium and cobalt, quintessential to power India’s EV Dreams
Indian government with its newest FAME Scheme plans to support 10 Lakhs e-2W, 5 Lakhs e-3W, 55000 4Ws and 7000 Buses on Indian roads in the next three years. But this plan has one debilitating flaw, India, unfortunately, has low reserves for most of the main components, including lithium, cobalt and nickel. Further, India is low on copper reserves as well. Fortunately, the global supply of these minerals is stable and is not considered resource constrained.
In order to acquire reserves of these strategic minerals like lithium and cobalt to power the country’s move into electric vehicles, three state-owned metal and mining companies are due to ink a joint venture agreement early next month.
The Joint Venture will see National Aluminium Company (Nalco), Hindustan Copper (HCL) and Mineral Exploration Corporation Ltd (MECL) as partners with a shareholding pattern of 34:33:33 respectively. The initial equity base of the company is expected to be around Rs 100 crore.
“The boards of the respective companies have already cleared the proposal. We hope to sign the agreement within the next one week or so,” HCL chairman Santosh Sharma said adding “we are part of a government initiative to build up strategic reserves of these minerals.” The first acquisition is likely to be finalised within the next six months. Official teams have already visited mines in countries like Peru, Bolivia and Chile, which are rich in such strategic minerals.”
India, which has set a target of achieving an all-electric vehicle fleet by 2030, has almost no reserve of these minerals and is keen on building up a strategic reserve of these minerals. But on international fronts, it has signed Memorandum of Understanding (MoU) with Bolivia, which provides it with access to the lithium reserves of the country India after signing an Memorandum of Understanding (MoU) with Bolivia, has leveraged its way into the lithium reserves of the South American nation for exploration and extraction of lithium, a prime component used to power electric vehicles.
The JV will give the central government a big push to promote and step up use of electric vehicle into the country. Official think tank NITI Aayog has already given its nod for the proposed joint venture. The JV will be looking at a government to government dispensation for allotment of mines, which is likely to entail fewer risks. Argentina, Bolivia and Chile are widely considered to have the best reserves of lithium and cobalt.
The Union mines ministry has directed the three state-owned companies to aggressively look for reserves of lithium and cobalt, which are used to manufacture batteries for electric vehicles, smartphones and laptops, in addition to other precious minerals like tungsten, nickel and rare earths.
Nalco, HCL and MECL have roped in German consultancy DMT as an advisor for the project to advise them on prospective reserves, foreign government rules and regulations, and also help scout for local mining partners.