The government has announced the discovery of 5.9 million tons of lithium reserves for the first time in the country in the Reasi district of Jammu & Kashmir. Geological Survey of India (GSI) has made the discovery.

Lithium is a non-ferrous metal and a key component in electric vehicle (EV) batteries.

The details were revealed in a GSI report along with 15 other resource-bearing geological reports and 35 geological memorandums handed over to state governments during the 62^nd Central Geological Programming Board meeting this week.

The discovery comes at a time when the country has set an ambitious renewable energy and EV mobility goal, and has been making efforts to attain self-reliance in the area of critical and strategic minerals.

Last year, the Ministry of Mines incorporated Khanij Bidesh India with participating interests of NALCO, HCL and MECL. The company is mandated to identify and acquire overseas mineral assets of critical and strategic nature such as lithium and cobalt. So far, engagements are underway with source countries such as Australia, Argentina, Bolivia and Chile which are endowed with these minerals.

“The unavailability of lithium has been one of the reasons why India has been dependent on other countries for Li-Ion batteries and other EV components. Lithium being one of the core elements of the Li-Ion batteries and taking into consideration the financial impact of sourcing Lithium, the recent discovery of Lithium reserves in J&K does come in as a new lease of life,” Pankaj Sharma, Co-Founder and Director of Log9 Materials said.

Akshay Kashyap, MD, Greenfuel Energy Solutions said, “By exploiting the potential of the lithium reserves in J&K, India could reduce its dependence on foreign countries making us truly ‘Atmanirbhar’, while also creating jobs, generating revenue, and furthering its renewable energy ambitions. India’s plan to increase EV penetration by 30% by 2030 relies heavily on lithium.”

“The recent announcement of local discoveries of lithium reserves presents an opportunity for India to secure these critical materials and reduce dependency from abroad. For a successful EV industry, an equally successful battery supply chain is needed, and the recent discovery might help in establishing that” said Ankit Mittal, Co-Founder and CEO of the energy storage company Sheru.

International Energy Agency’s (IEA) Global EV Outlook reported that over half of global lithium, cobalt, and graphite processing and refining capacity is in China, followed by Europe, which supports over one-quarter of global EV production with 20% cobalt processing. With 10% of global EV production, the U.S. has a battery production capacity of 7%.

Lithium demand doubled to 80 kt in 2021 compared to 2017, of which the demand for EV batteries accounts for 47%, up by 36% in 2020. While EV batteries are the dominant driver of demand for lithium, their availability is a concern, according to IEA.

Li-ion batteries are irreplaceable, and there are no commercial substitute battery chemistries at a scale currently that meets Li-ion’s performance.

Automotive lithium-ion battery demand reached 340 GWh in 2021, more than twice the demand in 2020, primarily driven by the increase in electric passenger cars, which observed a 120% surge in registrations last year.

After declining steadily since 2010, average prices for lithium-ion battery packs across all sectors have risen to $151/kWh in 2022, a 7% rise from the year before, a BNEF report finds. The agency expects battery prices to start dropping again in 2024 when lithium prices are expected to ease as more extraction and refining capacity come online.