Oil India's Pursuit of Lithium and Critical Minerals
State-run Oil India (OIL) is actively evaluating critical mineral blocks in Latin America, focusing on lithium-rich areas essential to India's net-zero journey. Given India's full dependency on lithium imports, mineral security has become a cornerstone of the country's energy transition strategy.
Efforts in Latin America
- A team from OIL visited the Lithium Triangle (Argentina, Bolivia, Chile) to assess various stage assets as part of a government initiative, preparing non-binding acquisition offers.
Domestic and International Strategies
- Domestic Initiatives:
- OIL has secured two composite licenses in India: a graphite and vanadium block in Arunachal Pradesh and a potash block in Rajasthan.
- Discovered lithium in oilfield brines in Rajasthan, with 55 to 66 ppm of lithium, approximately half of Latin American deposits, but considered viable.
- International Collaborations:
- Working with state-run entities like Oil and Natural Gas Corporation and Coal India to explore overseas opportunities.
- India Exim Bank is proposing an empowered committee and concessional financing to support overseas critical mineral investments.
Challenges and Global Context
- India's search for critical minerals like rare earths is nascent, while China dominates the sector with substantial investments and secured deposits worldwide.
- China spent $10 billion on overseas battery-related mineral acquisitions in early 2023 and $6 billion on lithium projects between 2020-23, far surpassing European investments.
National Critical Mineral Mission
- To bridge the gap with China, India's Cabinet approved the National Critical Mineral Mission in January 2025, as outlined in the 2024-25 Union Budget.
- The mission has a total outlay of ₹34,300 crore from 2024-25 to 2030-31, with PSUs expected to invest ₹18,000 crore.
Understanding Lithium
- Lithium, an alkali metal, is sourced from hard rock in Australia and brines in South America's Lithium Triangle, formed from volcanic activity over millennia.
- Unlike oil and gas, critical minerals like lithium occur in low concentrations, often resulting in marginal profitability.
