Lithium, India and the future of Battery tech

India is heavily dependent on China for its lithium battery supply (~70%). However, a recent discovery found 5.9 million tons of lithium reserves in Jammu & Kashmir's Riyasi district. This discovery is seen as a major development for India's energy security & could potentially reduce its dependence on other countries for lithium supply.

Why Lithium

Lithium is called the "white gold" of the 21st century due to its importance in the development of batteries, particularly due to the increasing demand for electric vehicles & renewable energy. Li-ion batteries are capable of holding a large amount of energy in a compact space, making them ideal for use in electric vehicles. With a single charge, these batteries can provide a driving range of up to 400 miles & also charge up quickly, making them an efficient & reliable energy storage solution compared to other solutions such as lead-acid, nickel-metal hydride, & nickel-cadmium.

Australia (52.9%), Chile(21.5%), China(9.7%), Argentina(8.3%) control 92% of global lithium production. China is the actual leader (>50%) in the lithium processing market, despite not having any reserves of its own. China (through holding companies) has a tight control over lithium mines in the South American lithium triangle & also holds a majority stake in the world's biggest hard rock lithium mine in Western Australia. UK, Iceland, Belgium, Netherlands, Germany, Denmark, Norway, Sweden, Israel, Singapore, South Korea have all committed to banning internal combustion passenger engines (ICEs) within the next decade, putting bare minimum EV sales forecasts at 9.5 Million units annually by 2032 which is a massive rise in demand & needs a massive 4x rise in supply. Such an exponential growth in global demand for lithium gives a lot of power to the country that can control/own the supply.

Lithium & India

Unfortunately, having lithium & using it to manufacture batteries are two entirely different things. Lithium extraction requires a critical process of extracting the mineral ores, refining & processing them for greater purity, making specialized battery components, integrating them into the battery pack, & finally recycling them. China has already invested heavily in lithium infrastructure, with 148/200 Li-ion battery Mega factories & 6/10 top lithium battery manufacturers are located there. Comparatively, India has no expertise in mining, refining, processing or recycling lithium & currently, its only lithium refining factory is yet to be fully operational. The Indian govt. needs to address this issue by promoting independent capabilities & establishing collaborations with reliable allies.

One key policy is the exemption of customs duties on the import of capital goods & machinery required for the production of Li-ion, thus encouraging domestic manufacturing. Another important policy is the "viability gap funding" scheme, which offers financial support (upto 20% of the total project costs) to infrastructure projects related to battery energy storage systems. Other policies are the Production-Linked Incentive (PLI) schemes to promote the domestic manufacturing of key components for EVs & the Faster Adoption & Manufacturing of Hybrid & Electric Vehicles (FAME) subsidy program, with a budget of 10,000 crores, provides financial incentives for the adoption of EVs in India. With more companies investing in lithium infrastructure & continued govt. support, India can soon move closer to becoming a significant player in the electric vehicle industry.

The problems with Lithium & the future of batteries

The Democratic Republic of the Congo (8th poorest country) produces 70% of the world's cobalt, but mining is often conducted by large companies with poor safety & human rights records or by individuals in dangerous conditions with rampant child labor & fatal accidents. Long-term exposure to cobalt has significant health effects in current & subsequent generations. Similar problems with Chile-Argentina-Bolivia (lithium triangle), a major lithium producer that has seen environmental & cultural devastation due to this industry. Ethical cobalt & green lithium are almost non-existent, & increasing mining will be difficult.

The most promising short-term solution is solid state batteries which has several benefits, including higher energy density, increased safety, & elimination of costly & problematic materials like cobalt & nickel. Experts believe solid state batteries could be produced cheaper than Li-ion batteries whole having 2x battery density, but reaching the necessary scale for cost competitiveness is a significant challenge. Most estimates place this more than a decade away, & even then, the world will still require a significant amount of lithium.

The transition to electric mobility is necessary, but the production of electric vehicles can be dirtier than ICEs. However, EVs are responsible for about 75% less emissions than their counterparts, even on current fossil-fuel based electric grids. The world must decide how much bad can be allowed for the greater good, especially in the coming lithium gold-rush where corners may be cut. Sacrifices for the environment have historically been contentious political issues, & determining what is an acceptable sacrifice is crucial to the fate of the world.

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