South American Lithium: A fuel for Indian future vehicles is the most wanted commodity globally

November 15, 2019 6:26 PM

A high-level delegation of Khanij Bidesh India Ltd., (KABIL) set up by the government has made several trips looking for acquiring strategic mineral assets in “Lithium Triangle” in three countries in South America including Argentina, Bolivia and Chile.

South American Lithium, Indian future vehicles, Khanij Bidesh India Ltd, Lithium Triangle, White Gold, EV manufacturer, vehicle sales in IndiaSouth American Lithium production is expected to grow by 199%.

By Sandeep Wasnik

Indian Electric Vehicles (EV) dreams depend on the supply of lithium, cobalt, nickel and manganese to manufacture the EV batteries. These batteries are massive 500 kg pack consisting of hundreds of large lithium-ion cells. For India, the biggest worry is looking for mines for these metals, as it has set plans to replace a significant portion of its conventional combustion engine fleet by EVs in the next decade.

A high-level delegation of Khanij Bidesh India Ltd., (KABIL) set up by the government has made several trips looking for acquiring strategic mineral assets in “Lithium Triangle” in three countries in South America including Argentina, Bolivia and Chile. These three countries have taken very different approaches to exploit the Lithium which is also known as ‘White Gold’.

Almost 66 percent of the world’s lithium reserves are in South America. Due to high-altitude South American nations’ salt flats are the key suppliers of the metal, with vast deposits. The investor-friendly nations are attracting prospectors and developers. Recently the discovery of Peru’s hard rock lithium has been attracting the consumers and giving a lucrative opportunity to EVs manufacturers.

Indian Navy Scorpene class submarine INS Khanderi: It’s a deadly deep-sea predator

South American Lithium production is expected to grow by 199%. Chile’s largest lithium reserve is located in the Atacama Desert, one of the aridest places in the world and therefore ideal for lithium extraction and storage (the metal is highly flammable and potentially explosive when exposed to water). Argentina boasts of vast lithium deposits which are located mainly in the northern provinces of Jujuy, Salta and Catamarca. Bolivia has the largest deposits of the three countries of the lithium triangle, which is located in the Salar de Uyuni area, not far from Potosí and Salar de Coipasa. Although Bolivian lithium reserves are estimated to be among the largest, if not the world’s largest, the production of this metal contributes only to a small extent to the country’s economy. However, due to the recent political uncertainty in Bolivia, investors and explorers are probably going to be a bit wary of going to that country. Info-graph will show the Lithium reserves in South America.

Today, in India, all OEMs (Original Equipment Manufacturer) import Lithium-ion cells from China, Taiwan and South Korea, India only has Cell-to-Pack manufacturing (assembly) plants totalling 1 GWh of annual production capacity. On the other hand, China is already planning to have 630 GWh of annual battery production capacity by 2023. India has imported nearly $1.225 Billion Lithium-ion Batteries from the world in April 2018-March 2019; this includes all sizes and different uses of Lithium-ion batteries. Info graph shows the import of Lithium-ion Batteries in India from April 2015 to July 2019 and can be easily calculated by linear equation y = 0.0694x – 2920.50

China remains the world’s largest electric car market and electric two/three-wheelers on the road exceeded 300 million. And the vast majority of them are in China with sales in the tens of millions per year, the Chinese market for electric two-wheelers is several hundred times larger than anywhere else in the world. Therefore, India is likely to face lots of issues looking for Lithium mineral resources in the world, Most of the Lithium minerals reservoirs or Stocks are reserved by Chinese Lithium-ion batteries manufacturer. Although the electric vehicle (EV) market is still in its nascent stage India, it is expected to be more important going forward, as the Indian government has undertaken various initiatives to promote electric vehicles. Indian EVs players in the market focus to expand their business operations and have consistently introduced innovative solutions to enhance their products portfolio. Thus, expansion and product launch are two prominent growth strategies adopted by these players. Info-graphics shows top impacting factors to introduce EVs in 2017 and 2025.

At present, EV market penetration is only 1% of total vehicle sales in India, and of that, 95% of sales are electric two-wheelers/three-wheelers. To ramp up the industry some actions are needed to be taken – like charging infrastructure and stations for batteries and mobility service providers. As well as automobile sectors should focus on educating consumer base on how to differentiate between hybrid and electric vehicles.

There is also a misconception that the electric two, three and car could provide a maximum mileage of 70km per charge, however, EVs models in the Indian market can deliver a mileage of over 100 km per charge.

Research institutions and automobile sector need to work on the use of suitable Li-Ion batteries, where the 60-70% cost of EVs is only for Battery in it. To understand this more clearly Info-graph shows comparisons of different types of Li-ion batteries used in EVs from the following perspectives: capacity, specific power, safety, performance, life span, and cost. This concludes that Lithium Nickel Manganese Cobalt Oxide (NMC), Lithium Iron Phosphate (LFP) and Lithium Manganese Oxide (LMO) batteries stand out as being superior among.

(The author is Latin America and the Caribbean Countries Market Expert. Views are personal.)

Get live Stock Prices from BSE, NSE, US Market and latest NAV, portfolio of Mutual Funds, Check out latest IPO News, Best Performing IPOs, calculate your tax by Income Tax Calculator, know market’s Top Gainers, Top Losers & Best Equity Funds. Like us on Facebook and follow us on Twitter.

Financial Express is now on Telegram. Click here to join our channel and stay updated with the latest Biz news and updates.

Next Stories
1IAF continues airlifting critical Oxygen cylinders and aid; Foreign aid keeps coming in
2Restore frequency of cargo flights, stop surging prices of medical supplies of COVID-19: India to China
3Army chief General MM Naravane reviews security situation along LoC during visit to Jammu region