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  • Writer's pictureAayushi Sharma

Lithium and the Australia-India partnership

One critical mineral, and its demand and supply, is at the heart of the critical minerals relationship between Australia and India. Lithium supply is key to India's green transition.


Earlier this year India's Minister for Coal and Minerals Prahlad Joshi embarked on a tour to Australia in order to secure cooperation in the critical mineral supply chains between the two countries. These critical minerals, especially lithium (Li), have been in popular demand over the last few years because of the central role they play in the attempt towards renewable energy transitions. These high demands are the results of the greater utility that these minerals possess in the energy sector. The lithium-ion batteries have come to revolutionise the automobile industry through the development of electric vehicles (EVs) and also the other battery powered electronics such as mobile phones.



The surge in demand has also had an effect on the prices of these minerals that are already present in a limited supply as of now. It has been estimated that the worldwide price of metals like Lithium hydroxide and Lithium carbonate have risen from less than $10,000 per tonne in 2020 to about $60,000 per tonne in early 2022.


The big question however remains on whether we have enough supply of these minerals to meet up with the demands. This is where the importance of securing supply chains through bilateral cooperation comes in.


The challenge of supply


Matching the supply of these critical minerals to the demands is one way of ensuring the stability in the price rise as well. When it comes to exploring the avenues for increased supply, it needs to be noted that while a huge reservoir of untapped resources of critical minerals exist around the world there is still a need to develop plans for judicial and sustainable extraction of the minerals.


Australia has a vast repository of untapped critical minerals. The country is set to become one of the rising suppliers of the critical minerals, especially in the case of lithium because of the vast reserves of lithium that exist in the country. This suggests that Australia is geologically at an advantage to offset the rising demands. One way to leverage this advantage is to work towards potential bilateral and multilateral cooperation in this regard.


Opportunity for partnership


Amongst the plethora of cooperative mechanisms that exist between India and Australia, critical minerals occupy the latest position.


Usually called the ‘white gold’, lithium is likely to become a central economic asset in the decade to come. The statistics pointing towards a high rise in demand make it clear that countries need to tap on this ‘white gold’ so as to secure a stable supply in the future as well. The high rise in demand of lithium ion batteries in India is in itself a huge incentive for Australia to look for an opportunity to cooperate. As per reports, India’s demand for lithium-ion batteries is likely to grow to 70 GWh by 2030. This means that India is all set to become a significant market of battery powered electronics and hence there is a subsequent high demand of the minerals that contribute to it. Australia’s large reserves of critical minerals can become a great source for the Indian markets.


The visit of Minister Pralhad Joshi positively resulted in the signing of the Memorandum of Understanding (MoU) between the Indian firm Khanij Bidesh India, and the Critical Minerals Facilitation Office (CMFO) which falls under the Ministry of Mines in Australia. This is one of the few significant steps that have been taken to increase the industry level cooperation in the extraction and processing of these critical minerals.


Increasing cooperation in the critical minerals industry is also one way for India to secure its position in the global supply chain for the materials that are likely to become the economic driving force in the near future. Andrew Jenkins, the Research Director of the Commonwealth Scientific and Industrial Research Organisation (CSIRO) points out, “India is planting the foot on the accelerator in this area.” The recently established Economic Cooperation and Trade Agreement (ECTA) between the two countries also makes it easier for trading in these critical minerals. The Indian government had identified about 21 of the critical mineral reserves in Australia including that of lithium, cobalt and zircon. These minerals would come under the purview of increased priority trade areas between the two countries.


Apart from the cooperation at the industry level there is also a need to develop the academic and research partnership in this area. India and Australia already have a robust system of academic partnership and improving on the critical minerals research partnership would further add to the sustainable ways of extraction of these minerals.


Another priority area of cooperation for the critical mineral sector is going to be greater investment opportunities for the expansion and building for new mines as well as processing plants for extraction. It needs to be taken into account that there are potential environmental risks attached to unsustainable extraction of minerals and hence the partnership must also focus on using these critical minerals as a bridge to complete transition on renewable energy.


Mutual Benefit


India is also one of the largest manufacturers of mobile phones, this gives the country all the more reason to secure the supply of the minerals to a great extent. On the other hand, the reservoirs of critical minerals pose a huge economic potential for Australia. These minerals are likely to become an important asset for the country. There are a great number of ways as to how the two countries can pool the resources to build cooperation in the critical minerals industry while also keeping environmental sustainability in consideration.


While India has the demand, Australia has the supply. This seems to be the perfect recipe for a long lasting and mutually beneficial bilateral relation in this regard.



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