According to sources, four Indian state-owned companies are currently negotiating with Chilean miner SQM to secure a 20% stake in its two lithium projects in Australia for $600 million. This move by New Delhi marks a significant effort to ensure a stable supply of lithium, a crucial metal for electric vehicle (EV) batteries.
The government-backed Khanij Bidesh India Ltd (KABIL) has teamed up with Coal India, Oil India, and ONGC Videsh to pursue the stake in SQM's Mount Holland and Andover lithium projects in Western Australia. The sources, who chose to remain anonymous, revealed that the companies are in the initial stages of discussions, with due diligence underway.
SQM is recognized as the second-largest lithium producer globally, and as India emerges as one of the fastest-growing economies, the country aims to secure a consistent source of lithium for the anticipated surge in demand for EV battery production. The collaboration between KABIL and the three state firms involves engaging a mergers and acquisitions advisor for the potential deal.
Although there has been no response from SQM, KABIL, Coal India, Oil India, and ONGC Videsh regarding these developments, this is considered India's most substantial endeavor to obtain overseas lithium supplies. The establishment of KABIL, a joint venture comprising National Aluminium Company, Hindustan Copper, and Mineral Exploration and Consultancy, reflects India's strategy to acquire and process strategic minerals globally.
India's increasing focus on securing international agreements for accessing critical minerals extends to countries like Argentina, Australia, and Chile, with preliminary discussions also being explored in cobalt-rich Congo. In the previous year, a partnership was formed with an Argentinian state-owned entity for lithium exploration and mining activities. With a growing demand for energy, India is promoting EV production to decrease dependency on fossil fuels.
Despite EV sales in India accounting for a small percentage of total car sales in recent years, the sector has shown rapid growth, outpacing the overall market. Sales are projected to double by 2025, primarily driven by new product launches.