This was the first discovery of a major lithium deposit in the country. Back in 2021, India found its first-ever local lithium deposit, totaling 1,600 tonnes, in the state of Karnataka.
The Indian government already has ambitious expectations for the country’s electric vehicle (EV) market and the newly-discovered deposit could help in meeting those expectations because lithium is a key raw material used in EV batteries.
India’s EV market is forecast to reach 10 million annual sales by 2030, growing at a compound annual growth rate (CAGR) of 49% between 2022 and 2030, according to India’s government-run Strategic Investment Research Unit (SIRU).
The number of EVs on Indian roads will jump by 45-50 million units over that period from a current total of around 14 million, according to SIRU forecasts.
Due to a supply that is fundamentally incapable of keeping up with demand from a global push toward green energy and a booming EV sector, lithium prices have skyrocketed over the recent two years.
Therefore, securing lithium supply has been a key factor to the growth of the EV industry.
The new lithium deposit in India may act as a counterweight to demand from the country’s expanding EV market, as well as reduce reliance on foreign countries for lithium supply.
“Global lithium demand is expected to remain strong amid the global energy transition,” Vicky Zhao, Fastmakets’ senior battery materials analyst, said. “Every country is actively looking for lithium resources and India is also actively building EV battery plants, many of which have planned considerable capacities.
Zhao added: “The discovery of the lithium deposit may go some way in meeting domestic demand.”
India’s reliance on lithium imports
Prior to the discovery of the lithium deposit, India heavily relied on imports to meet the country’s EV demand. In January, several Indian media outlets reported that the government had identified two lithium mines in Argentina which the country may soon acquire or lease.
India’s locally-recycled battery raw materials may also help feed its emerging lithium battery-producing industry within the next three years.
The global lithium market has been in a deficit for the past two years and is expected to remain in a deficit of 14,300 tonnes in 2023, according to Fastmarkets’ analysts.
Fastmarkets’ daily price assessment for lithium hydroxide monohydrate LiOH.H2O 56.5% LiOH min, battery grade, spot price cif China, Japan & Korea was $75-78 per kg on Monday February 13, unchanged since February 3 and up by 390.38% from $15.30-15.90 per kg on January 1, 2021.
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