India is contemplating offering incentives to private firms to establish lithium processing facilities, aiming to develop its fledgling lithium mining industry and enhance the supply of this essential metal for electric vehicle (EV) batteries. According to three government sources, New Delhi is devising a new critical minerals policy within the mines ministry, which would include incentives for companies to set up lithium processing plants.
The critical minerals policy is expected to encompass all aspects of the lithium supply chain, from exploration and mining to value addition. It will also encompass incentives for beneficiation and refining operations within the country. While the exact nature of the incentives remains uncertain, the government intends to draw inspiration from countries like Australia and Canada, renowned for their robust mining sectors.
The Ministry of Mines acknowledged the government’s efforts to ensure the availability of critical minerals but did not provide further details in response to queries. Karthik Bansal, a research analyst at the Centre for Social and Economic Progress in New Delhi, suggested that subsidies and tax benefits could be part of the incentive package to spur investment in lithium processing.
India, the world’s third-largest carbon emitter, designated 30 minerals, including lithium, as critical last year to support its push for cleaner technologies across various sectors like electronics, telecommunications, transport, and defense. Despite its recent discovery of lithium reserves, India lacks domestic processing facilities, necessitating the establishment of local processing infrastructure.
Several companies, including Ola Electric, Vedanta Ltd, and Jindal Power, are vying for critical minerals blocks, including lithium, with a shortlist expected by July. The selected firms will receive licenses for exploration and mining activities, as well as the responsibility to process lithium into concentrates or chemicals for use in battery manufacturing.
