The Indian government has just passed an amendment to allow private companies to also exploit mineral reserves. A deposit has been found in the Muslim-majority region that could reduce imports from China. The discovery has fueled enthusiasm for the ambition to produce electric vehicles, but aside from the potential environmental damage, the Supreme Court will begin to assess next month whether or not Delhi’s revocation of Kashmir’s autonomy was a legitimate move.
Delhi () – The Indian government has approved a series of amendments to allow private companies to commercially extract lithium and other key minerals for the production of mobile phones, semiconductors, solar panels, electric vehicles and wind turbines. Considering that up to now mining was only managed by the State, this is an important development, probably related to the fact that, in February, a 5.9 million tonne lithium deposit was discovered in the district of Reasi, in the Jammu and Kashmir region, disputed with Pakistan.
Even larger reserves were also recently discovered in Degana (Rajasthan) and, according to the Indian Geological Survey, 80% of the national demand for lithium could be met from this single deposit, which would make the country independent of China. “A single exploration license will encourage more private investment in an area where private presence is currently limited,” a government official explained.
India aims to achieve 30% electric vehicle market penetration by 2030, a goal for which lithium resources – hitherto secured through imports – are crucial. In 2021, the global extraction of this mineral exceeded 100,000 tons and India hopes to become a key player in global supply chains. According to estimates by industry experts, with the 10% of Kashmir’s mineral reserves could supply the production of most of the cars on the road in India, and the cost of producing a battery could be would reduce at 5% or 7%.
But for now there are many political, judicial, technological and environmental challenges. A few days ago, the Supreme Court of New Delhi formed a panel that will have to rule on the decision that the Government made in 2019 to limit the autonomy of Kashmir. In that year, Prime Minister Narendra Modi repealed Article 370 of the constitution, which gave the Muslim-majority region the ability to enact laws, adopt its own flag, and draw up a Constitutional Charter. The decision had been accompanied by preventive arrests of local political leaders and the suspension of the Internet, ignoring protests from Islamabad and Beijing, which is in an open dispute with Delhi over control of Ladakh.ì, a neighboring territory.
Now, the highest Indian court announced that there will be daily hearings to challenge the executive’s decision to revoke the special status of the region, which will take place from August 2. So far, Delhi has defended its performance, saying the revocation of autonomy has brought “peace, progress and prosperity” to a territory ravaged by decades of rebellion. Arguments that, according to the Court, have “no relevance” in the judicial dispute. In recent years, India has increased the presence of its security forces and increasingly curtailed civil liberties after the central government appointed a governor.
But the obstacles do not end there: it could still be years before lithium extraction takes place in Kashmir. According to experts, further evaluations will be needed to determine the exact quality and quantity of the materials at the site. It appears that Kashmir’s lithium is mixed with bauxite and India does not currently have the expertise or technology for this type of extraction.
In addition, the region, at the foot of the Himalayas, is also ecologically sensitive: while electric cars are favored to achieve government zero emission targets, the manufacture of their batteries could be very harmful to the environment, undermining the benefits that could be obtained in terms of clean energy production. However, the Indian government has announced in the last months that it will launch a tender for the Kashmir deposits before the end of the year.
The discovery of new mineral reserves is not accidental, but part of India’s program to become independent from Chinese imports. To do this, Delhi adopted a two-pronged strategy: domestic geological exploration, launching 18 projects across the country, and international procurement, creating the Khanij Bidesh India (KABIL) joint venture, to identify and procure minerals from abroad as well. According to government data from the Ministry of Trade and Industry, India spent 163 billion rupees (1.77 billion euros) on lithium imports between April and December 2022.
