Indian Consortium Targets Australian Lithium Projects
India is advancing its electric vehicle ambitions by pursuing a 20% stake in two Australian lithium projects. These projects, owned by Chilean mining giant SQM, involve the Mount Holland and Andover lithium assets located in Western Australia.
The proposed $600 million deal involves a consortium of Indian state-owned enterprises. The consortium includes Khanij Bidesh India Ltd (KABIL), Coal India, Oil India, and ONGC Videsh. The initiative aims to secure critical minerals essential for India’s rapidly growing electric vehicle market.
Critical Mineral Supply Chain Strategy
India’s growing focus on lithium supply reflects its desire to become a prominent player in the global EV market. Lithium remains a crucial component for battery production, essential for the country’s expanding EV sector. Government initiatives promoting sustainable transportation have driven this rapid growth.
Electric vehicle sales in India made up 2.5% of over 4 million cars sold in 2024. Despite this modest share, the sector’s growth rate of 20% far outpaced most other markets. As sales are expected to double in 2025, securing a reliable lithium supply becomes critical.
Shift Away from Chinese Lithium Imports
Sourcing Australian lithium would help India reduce its reliance on imports from China and Hong Kong. With the country striving to enhance its energy security, diversifying supply sources becomes essential.
India announced a 5.9-million-tonne lithium discovery in Jammu and Kashmir in 2023. However, stalled projects and weak investor interest hindered progress. Geological and technical challenges also emerged, with experts arguing the reported lithium content was lower than initially claimed.
The deposit’s clay-based composition complicates extraction due to the presence of potassium, aluminium, silicon, and fluorine. Additionally, political instability in the region, exacerbated by India’s 2019 revocation of Jammu and Kashmir’s semi-autonomous status, has deterred investors.
International Partnerships and Expansion
India’s strategy involves securing critical minerals from resource-rich countries. KABIL recently entered a $24 million exploration deal for lithium blocks in Argentina. The agreement with the Argentinian state-owned CAMYEN secured exploration rights for 15,700 hectares in Catamarca.
KABIL’s pursuit of the SQM deal aligns with this broader effort. The consortium is reportedly in the process of selecting a mergers and acquisitions adviser to support the transaction. India’s latest move indicates a recognition that waiting for domestic supply development is not a viable short-term solution.
Figure 2: Mount Holland Lithium Project
According to anonymous sources cited by Reuters, “This is so far India’s biggest attempt to secure lithium supplies overseas. The due diligence is on, and the companies have expressed their interest with an initial offer.”
Increasing Lithium Demand
SQM ranks as the world’s second-largest lithium producer. India, the fastest-growing major economy globally, aims to secure a steady supply of the critical metal. The anticipated spike in demand for EV batteries, essential to lowering carbon emissions, drives this effort.
India has also expressed interest in forging deals with other resource-rich nations. New Delhi is reportedly exploring agreements with countries such as Congo, known for its cobalt reserves.
KABIL’s Formation and Mandate
KABIL emerged as a joint venture between India’s National Aluminium Company, Hindustan Copper, and Mineral Exploration and Consultancy. Its mandate focuses on acquiring, developing, and processing strategic minerals overseas for use in India.
The Indian government established KABIL several years ago to reduce dependence on imports and strengthen the country’s mineral supply chain. This deal with SQM represents the most significant overseas investment in India’s pursuit of lithium assets.
Figure 3: KABIL was established to reduce dependence on imports
Implications for India’s EV Ambitions
The Indian consortium’s interest in the Mount Holland and Andover lithium projects marks a critical step. The country aims to become a major player in the global EV market, with battery production serving as a cornerstone of this effort.
The $600 million proposal, if successful, could significantly enhance India’s ability to meet the rising demand for lithium. The deal would also position India to reduce its reliance on imports and fortify its energy security.
Future Outlook
Industry experts suggest that competition for resources like lithium will continue to intensify. As the world transitions towards clean energy, securing critical minerals remains a strategic priority.
India’s engagement with SQM reflects a broader effort to establish a resilient supply chain for EV battery production. The outcome of the proposed deal could significantly influence the nation’s electric vehicle industry and its position within the global market.
