State-run iron ore miner NMDC has initiated discussions with a couple of Australian miners — Hancock Prospecting and Hawthorn Resources — to acquire a minority stake in an operating lithium mine in the island country.
“We had very preliminary talks,” said a top NMDC official.
NMDC could take a minority stake in one of the mines owned by Hancock or Hawthorn Resources, since a “majority stake would require billions of dollars”, the official added.
Also read| NMDC looks to mine lithium and cobalt in foreign lands
The miner would sign an offtake agreement with the target company in lieu of a minority stake. NMDC will bring back its entire quota to India to meet the country’s growing lithium requirement because of the rising domestic sales of electric vehicles.
The market for lithium-ion battery, used in EVs among others, is forecasted to go up to $ 5 billion by 2025 from the current $1.5 billion.
Australia is one of the leading producers of lithium. Globally, more than 80% of lithium is consumed in batteries and ceramics and glasses. Due to lack of resources, India is among the top 10 importers of the metal in the world. India imported 1,124 tonne of lithium carbonate worth $8.8 million in 2021. In February 2021, the Centre had identified the presence of 1,600 tonne lithium in the Mandya district of Karnataka. Currently, there is no production in India.
Also read| NMDC and CIL likely to join SPV to acquire mineral assets overseas
Funding for the acquisition should not be a problem for NMDC. A cash-rich company, the miner had reported Rs 9,398 crore net profit in FY22, 50% higher than Rs 6,253 crore recorded in FY21.
The US Geological Survey had earlier this year estimated that there are about 89 million tonne (MT) of known lithium reserves in the world. The highest reserve was in Bolivia at 21 MT followed by Argentina at 19 MT, Chile at 9.8 MT, UK 9.1 MT, Australia 7.3 MT and China at 5.1 MT.
Chile is the largest global exporter of lithium carbonates accounting for 79% of the global exports in terms of quantity. China is the leading importer followed by Korea and Japan.
Sources said NMDC is also looking for cobalt, nickel and gold mines in various geographies, including Africa.
