Explained: Lithium reserves found in J&K; how significant is it for India?

Last week, the Geological Survey of India (GSI) discovered 5.9 tonnes of lithium deposits in the G3 category in the Salal-Haimana area of the Reasi District of Jammu and Kashmir. This was the first discovery of lithium deposits in the country. 

The discovery is touted to be essential for India’s transition to clean energy and will support the domestic manufacturing of electric vehicles, and smartphones. Lithium-ion cells or Lithium-ion batteries are a crucial component for the manufacturing of electric vehicles. The discovery of lithium deposits is touted to be a game changer for India’s position in the global electric vehicles market.

According to a report by the International Energy Agency, China currently accounts for 58% of lithium processing globally, followed by Chile which accounts for 29% of lithium procession, followed by Argentina with accounts for 10%. In 2020-21, India imported an estimated ₹8,800 crore worth of lithium batteries 2020-21 and over ₹170 crore worth of lithium metal.

In Union Budget 2023, the government exempted customs duty on imports of capital goods and machinery for manufacturing of li-ion cells for electrical vehicle (EV) batteries, to boost battery production and EV penetration in India. As the EV industry cheers on the recent discovery, a crucial aspect to look at would be the G3 category of lithium deposits.

What is the G3 category?

According to the United Nations Framework Classification for Fossil Fuels, a G3 category or inferred resources is defined as quantities associated with a known deposit that can be estimated with a low level of confidence. Inferred resources mean that part of a mineral resource for which quantity and grade or quantity can be estimated on the basis of geological evidence and limited sampling and reasonably assumed, but not verified, geological and grade continuity.

"A low estimate scenario is directly equivalent to a high confidence estimate (i.e. G1), whereas the best estimate scenario is equivalent to the combination of the high confidence and moderate confidence estimates (G1+G2). A high estimate scenario is equivalent to the combination of high, moderate and low confidence estimates (G1+G2+G3). Quantities may be estimated using deterministic or probabilistic methods," the UN says.

What do experts say?

According to experts, the discovery of lithium deposits in the G3 category would require more research and studies to reach the final 'confident G1 or G2' category of 'mineable reserves', where the ministry of mines can exactly determine how much tonnage is available and how much can be extracted and also determine the quality of the mineral. It would also take another 5 to 7 years to use lithium deposits commercially. As per NITI Aayog, India’s battery storage market is expected to reach more than 1000 GWh by 2030, translating into a cumulative market size of ₹25,000 crore.