Demand for batteries is on the rise due to their widespread application in electronics, electric vehicles, renewable energy integration, data centres and many other sectors. Lithium-ion based batteries dominate the battery energy storage (BES) market due to their high energy density, long cycle life and declining costs. Key components of these batteries include lithium, cobalt, nickel, manganese and graphite.
India has substantial reserves of graphite in Jharkhand, Arunachal Pradesh and Tamil Nadu. Limited quantities of cobalt and nickel, often occurring alongside copper ores, have been found in Odisha and Jharkhand. However, India does not have operational mining leases for lithium and largely depends on imports, though lithium reserves have recently been discovered in Karnataka and Jammu & Kashmir.
Globally, the ‘Lithium Triangle’ of South America – including Chile, Argentina and Bolivia – has the largest deposits of the mineral. Australia and China also hold significant reserves. These regions are key to the global lithium supply chain. As per 2024 Statistical Review of World Energy by Energy Institute, the Lithium production has more than doubled over the past three years reaching 198 kt in 2023. Further, International Energy Agency (IEA) estimates the demand to reach 530 kt by 2030.
Volatility in price, however, hinders decisions on new supply investments. As seen in February 2024, when production at Australia’s Greenbushes mine slowed, other producers reviewed their operations. High production costs could further pressure prices, making it difficult to secure long-term supply agreements.
There are geopolitical factors at play as well.
Take cobalt, for instance. The mineral, essential for improving battery life and energy density, is primarily produced in the Democratic Republic of Congo (DRC), which accounts for about 70% of the world’s supply. Australia and Russia also contribute, but the heavy dependence on the DRC poses risks due to political instability in the region. The high concentration of cobalt mining in the DRC and ownership by foreign entities poses supply security risks. Recent disputes between the DRC government and foreign miners, such as the suspension of CMOC’s TFM mine in July 2022, highlight these challenges. The mine resumed operations in April 2023 after a $2 billion settlement. In April 2024, the DRC suspended nine subcontractors at Eurasian Resources Group’s mines, indicating ongoing supply risks due to tensions between the DRC and foreign miners over resource ownership.
Cobalt demand in 2023 was 215 kt with sufficient market supply. Going forward, the IEA estimates an uptick of around 60% in demand, limited only by the shifting market preference towards low-cobalt or cobalt-free cathodes.
Figure: Major producers of critical minerals in 2023 (tonnes)
Source: Energy Institute – 2024 Statistical Review of World Energy
Against this backdrop, India is actively pursuing a strategic approach to secure a stable supply of critical minerals, essential for its burgeoning electric vehicle and renewable energy sectors. The Union Ministry of Mines projects cobalt consumption to increase from 17 tonne in 2025 to 3,878 tonne by 2030. Similarly, lithium consumption is estimated to surge from a mere 58 tonne in 2025 to 13,671 tonne by 2030.
To address these supply chain risks, the government established Khanij Bidesh India Limited (KABIL) in 2019. KABIL is mandated to acquire overseas mineral assets and has already initiated projects in Australia and Argentina. KABIL has secured exploration and exclusivity rights for five lithium brine blocks in Argentina’s Catamarca province, marking India’s first overseas lithium mining venture.
Concurrent with these efforts, industry is exploring alternative battery chemistries to mitigate the risks associated with critical mineral supply chain disruptions. Solid-state and sodium-ion batteries are emerging as potential substitutes for lithium-ion batteries. Furthermore, investing in recycling infrastructure is crucial to recover valuable materials from end-of-life batteries, reducing the demand for primary resources.
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