Sources claim that Indian state firms are interested in SQM’s lithium projects in Australia.
Four sources have confirmed that four Indian state firms were in discussions with Chilean mining company SQM about acquiring a 20% stake of its two projects in Australia. The deal would cost $600 million. This is New Delhi's largest effort to secure supplies for the metal used in EV batteries.
Sources said that Khanij Bidesh India Ltd, a government-backed company, has partnered up with Coal India Ltd, Oil India Ltd, and ONGC Videsh in order to secure a 20% stake in SQM’s Mount Holland Lithium Project and Andover Lithium Project in Western Australia.
Sources did not want to be identified as the discussions were not public.
SQM is a world-leading lithium producer.
India, the fastest-growing major economic power in the world, has increased efforts to ensure a constant supply of lithium. They anticipate a surge in the demand for the metal used to make EV batteries, which will be critical to reduce carbon emissions.
One source said, "This is India's largest attempt so far to secure lithium supply overseas." "The due diligence has begun, and companies have already expressed an interest in making an initial offer."
Sources said that KABIL and the three state-owned companies are in the process to appoint a mergers & acquisitions advisor for the deal.
SQM, KABIL Coal India Oil India and ONGC Videsh have not responded to'requests for comments.
The plans of India to purchase stakes in SQM projects has not been previously reported.
New Delhi established KABIL, a joint venture of the state-owned National Aluminium Company with Hindustan Copper and Mineral Exploration and Consultancy, a few year ago, to acquire, process and develop strategic minerals abroad for India.
India has recently increased its efforts to obtain agreements with resource-rich countries like Argentina, Australia and Chile for the access of critical minerals.
New Delhi also explores an initial agreement with the cobalt rich Congo.
KABIL signed a five-block exploration and mining agreement last year with an Argentine state-owned company.
India, a country with a growing energy demand, is encouraging the production of electric vehicles to reduce its reliance upon fossil fuels.
In 2024, EVs in India will account for only 2.5% of the total 4.3 million vehicles sold. However, their growth rate of 20% is higher than the 5% overall growth in the car market. Analysts predict that sales will double from 100,000 units the previous year to 250,000 units in 2025, mostly due to new launches. (Reporting and editing by Mayank Bhadwaj, Sonali Paul and Mayank Bhardwaj; Melanie Burton contributed additional reporting from Melbourne.
(source: Reuters)
