India partners with Argentina for lithium supply

India's Khanij Bidesh India (KABIL) has signed an initial agreement with Argentinian mining company Jujuy Energia y Mineria Sociedad del Estado (JEMSE) for the exploration and production of lithium, as India strives to establish a robust battery supply chain in order to meet its ambitious targets for electric vehicle (EV) uptake.

Under the agreement, the two companies will work on projects related to the exploration and extraction of products including lithium and polymetallic materials, including projects related to the addition of value of lithium carbonate, and the production and transmission of electricity. Their efforts will be focused on the province of Jujuy, a major lithium producing region from which output has surged in recent years as various international companies ramp up mining operations. Lithium Americas is one of the latest firms to invest in the area, aiming to launch its new Cauchari-Olaroz project in early 2021 with estimated capacity to produce 40,000 t/yr of battery-grade lithium carbonate.

KABIL — a joint venture between state-run Nalco, Hindustan Copper and Mineral Exploration — was formed to explore and produce strategically important minerals overseas for domestic consumption. India is under particular pressure to develop a robust battery supply chain if it is to meet ambitious EV uptake targets — it currently relies heavily on imports of lithium-ion cells from countries including China, Japan and South Korea. There has been speculation this year about whether Delhi will impose an import tax on lithium-ion cells in order to support domestic production, but no announcement has yet been made.

The Indian government has set up incentive schemes to encourage the uptake of EVs over the next decade, approving a 100bn rupee ($1.3bn) incentive plan in March 2019 to help popularise EVs until March 2022, and has plans to set up 2,700 new charging stations across the country. In an attempt to support local EV production, India hiked its customs duty on imports of completely built units of commercial EVs to 40pc from 25pc as of 1 April 2020.

By Samil Surendran