Discovery of Lithium Reserves

News of the discovery of 5.9 million tonnes inferred resources of lithium by Geological Survey of India in the Salal-Haimana area of Reasi district, Jammu & Kashmir has been received as a game-changer in India’s impending transition to a green economy. With this discovery, India now has the third largest resource of lithium globally, but it will take time to convert it to reserves.

Significance of this discovery –

• Crucial for a green economy — Lithium-ion batteries are used in wind turbines, solar panels, and electric vehicles, all of which are crucial in a green economy.
• Sustainable supply of critical metal amidst the increased global demand —
  • • A World Bank study suggests that the demand for critical metals such as lithium (Li) and cobalt is expected to rise by nearly 500% by 2050.
    • The global electric vehicle market is projected to reach $823.75 billion by 2030.
      • It will register a Compounded Annual Growth Rate (CAGR) of 18.2% from 2021 to 2030.
      • At the same time, India’s EV market is projected to register a CAGR of 23.76% by 2028.
    • Hence, this discovery will enable India to secure its critical mineral supplies and build self-sufficiency in this sector.
• Boost the domestic battery-manufacturing industry —
  • • India currently imports all of its Li from Australia and Argentina and 70% of its Li-ion cell requirement from China and Hong Kong.
    • The lithium reserves in J&K could boost the domestic battery-manufacturing industry.
    • If the perceived size of the mineral reserves in J&K is borne out by further exploration, India could jump ahead of China vis-à-vis its Li stockpile.
• Support to India’s ambitious plans —
  • • The J&K reserves will also help advance the Indian government’s ambitious plan of 30% EV penetration in private cars, 70% for commercial vehicles, and 80% for two and three-wheelers by 2030 for the automobile industry.
    • They will also strengthen India’s National Mission on Transformative Mobility and Battery Storage as well.
      • Launched in March 2019, this mission aims to formulate strategies for transformative mobility and Phased Manufacturing Programmes for EVs, EV Components and Batteries.
• Geostrategic significance —
  • • Critical mineral dependencies constitute a major geo-strategic concern in the transition to net-zero carbon energy systems.
    • China currently controls 77% of the global lithium-ion battery manufacturing capacity and is home to six of the world’s 10 manufacturing companies.
    • The growing geopolitical rivalry with China complicates India’s security considerations.
      • This is especially relevant in light of the longstanding, and recently escalating, territorial and border disputes.
    • To reduce dependence on China, the Indian government and industry are pushing for a ‘Rare Earths Mission’ to exploit the country’s critical mineral reserves.
      • Country’s critical mineral reserves accounted for 6% of the world’s rare-earths’ reserves prior to the discovery of Li in J&K.
    • In this context, the new discovery has more geo-strategic implications considering the geopolitical sensitivity of its wider location.

Environmental effects of Lithium mining –

• Environmental degradation —
  • • Extracting Li from hard rock mines entails open-pit-mining followed by roasting the ore using fossil fuels.
    • Industry estimates suggest that this process consumes 170 cubic metres of water and releases 15 tonnes of CO2 for every tonne of Li extracted.
    • Open-pit-mining, refining, and waste disposal from these processes substantially degrades the environment.
    • It also depletes and contaminates waterways and groundwater, diminishes biodiversity, and releases considerable air pollution.
• Socio-environmental challenges —
  • • In Australia, Li-bearing pegmatite deposits are found in the ancient geological regions of Pilbara and Yilgarn cratons, whose continental rocks have been stable for over a billion years.
    • The Himalaya on the other hand is the youngest mountain range in the world and is much more unstable.
      • The ongoing land sinking tragedy in Joshimath is an example of this fact.
    • Against this backdrop, the socio-environmental effects of mining are likely to be far worse considering the densely populated regions of India.
    • Also, it is being feared that the mining would negatively affect the employment scenario in the region.
      • Experts claim that employment in mining may not fully offset the consequences on local agriculture, animal husbandry, and tourism.

Safeguards for India’s mining sector –

• In 2015, Lok Sabha amended the Mines and Minerals (Development and Regulation) Act 1957 to establish the District Mineral Foundation (DMF).
• The DMF is a non-profit statutory trust for every Indian district affected by mining-related operations.
• DMF works for the interest and benefit of persons, and areas affected by mining-related operation.

Criticism of District Mineral Foundation –

• The DMFs have become sites of centralised bureaucratic control, without meaningful public participation or accountability.
• Example — A CAG audit in May 2022 noted that the district collectors of Bokaro, Dhanbad, and Ranchi incurred an expense of ₹1568.04 crore from DMF funds, without identifying the areas affected by mining or a list of affected people.