Mines Ministry to appoint consultant for due dilligence on Australian lithium block acquisition

India’s Mines Ministry is planning to appoint a consultant as it looks to carry out due diligence for acquisition of lithium blocks in Australia. Talks are on with one of the State-agencies there for securing the blocks.

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Acquisitions are most likely going to be through KABIL, yet again.

Recently, the Ministry through its CPSE, KABIL (Khanij Bidesh India Ltd) – a joint venture among NALCO, Hindustan Copper (HCL) and MECL – acquired five lithium blocks in Argentina.

“We are still engaging with Australia and trying to get some lithium blocks there. Australia is one of the largest lithium producers globally and (discussions are on) through one of their government offices”, Critical Minerals Office, VL Kantha Rao, Secretary, Ministry of Mines, told businessline.

Work has also begun towards engaging a consultant there. PWC was the previous consultant.

“Previously, there was a consultant, which was jointly appointed by KABIL and the Australian government, helping us there. However, that did not work out. We are now looking for another consultant and some other blocks”, he said.

“Earlier, in Argentina it was a G2G agreement and that worked well. But, in Australia, that may not be the case. We are going with whatever the law of the land is there,” Rao added.

In Australia, rules state that if a mineral block (in this case) is shortlisted for acquisition or investment, then the foreign company or government enterprise (in this case from India), will have to pick up an equity stake in the Australian company who owns that particular block. Off-take agreements are decided on the proportion of equity picked up in the Australian company, sources said.

Incidentally, some 52 per cent of the world’s lithium comes from Australia.

Lithium is mostly found in the mineral spodumene, from which it must be extracted, processed and refined. In 2023, Australia reported an output of of 86,000 tonnes of lithium, higher than the 74,700 tonnes it reported in 2022.

A key use of lithium is in rechargeable batteries for electronic devices such as cell phones, cameras, laptops and electric vehicles (EVs). It is the last of these applications that has investors most excited and lithium is critical to EV production, as its unique properties help create the lightweight batteries they need to function.

Tapping into Africa

This apart, the Ministry has begun consultation with several counties in Africa – Namibia, Ghana, Congo, Zambia, Tanzania and South Africa – for acquisition of critical mineral blocks.

“In some countries, like Tanzania, we can look at G2G arrangements,” Rao said.

African nations would be tapped primarily for copper, cobalt, chromite and other critical minerals.

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“We have been present in African nations previously in sectors like coal and some of the private players have also invested there. Now, we are trying to push through a government support for critical minerals,” Rao said.

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