To accomplish the goals of Paris agreement world is moving to renewable sources at record pace. Almost after every day or two we hear about some solar or wind project. Recently you may have read about the world's largest floating solar energy plant on the Omkareshwar Dam on the Narmada river in Madhya Pradesh. With all these advancements we will also need the best storage options. This metal is crucial for electric vehicles. With battery prices falling, electric cars are expected to be as cheap as fuel-powered cars in the foreseeable future. According to the BNEF, electric vehicles (EVs) will hit 10% of global passenger vehicle sales in 2025, with that number rising to 28% in 2030 and 58% in 2040. The most important use of Lithium is rechargeable batteries that we see in everything around us digital camera, phones, laptop, and the list continuous, but it goes beyond that. Lithium Hydroxide is used to absorb carbon dioxide in space vehicles, its alloys are used in aircraft. India is the largest importer of lithium ion batteries by importing batteries worth USD 1.2 billion in 2019-20. We want to change these equations and make India 'Atmanirbhar' in this field too. So, one thing for sure is Lithium is future and will shape the geopolitics rather say it has already started to do so. It is also possible that countries with large lithium reserves can come together and form the grouping like OPEC.
More then 50% of the world's lithium reserves are found in lithium triangle of South America, consisting Bolivia(21 million tonnes), Argentina(17 million tonnes), Chile(9 million tonnes). List is followed by US, Aus and China. Just to give you rough estimate of importance of this metal, Chile earned a revenue of 1 billion USD by selling Lithium and demand is continuously increasing after that. Unfortunately, we are not able to found any major reserves of Lithium in India. Reserves of nearly 1600 tonnes discovered in the district of Karnataka. India has to take quick steps here because China already has the resources and it is all set to control the supplies.
Lets see what steps India is taking to build her strategy for the decade.
India established a new state owned company called Khanij Bidesh India Ltd. with the specific objective to acquire mineral assets abroad. President of India Shree Ramnath Kovind visited the Chile and Bolivia in Mar-Apr last year. He signed the MoU in the field of mining with his Chile counterpart, India offered training slots to Chilean armed forces. Such steps increases the goodwill of India. Bilateral trade stands at 2.8 billion USD in 2017-18, major part of which is of course Lithium. MoUs in the field of mining, space, IT, traditional medicines are signed with Bolivia too. India offered USD 100 million Line of Credit, also Bolivia joined the International Solar Alliance(ISA). It is very rich country in terms of resources of Gold, Silver, Tin and now Lithium. Trade stands at nearly USD 800 million in 2017-18. We already discussed how Australia-China relations are worsening. And that makes the India Australia Alliance more stronger. Australia is the part of QUAD grouping. And is the largest producer of Lithium. Australian high commissioner recently said Australia and India both gain from the promise of expanding trade in lithium resources. He further added that Lithium metal-based battery technologies will form the key component of the push for the rollout of EV and hybrid vehicle.
So, if you left the China, India has very good relations with all major countries with Lithium resources. Initial steps are taken to ensure the supplies. MoUs are signed to bring the precious metal to India and simplify the process of investment in these countries. Next step is building the infrastructure to refine it.
Like petroleum refineries refine the crude oil into various products, we need lithium refineries to process lithium ore to produce battery grade material. India's largest power trading and renewable energy company Manikaran Power Limited will be investing INR 1000 crore to setup India's first Lithium refinery in Gujarat. Tata and Adani groups also want to setup the lithium ion battery plant in Dholera SIR. Dholera SIR is close to Western Dedicated Freight Corridor, which gives additional advantage of great railway connectivity to the capital Delhi and Jawaharlal Nehru Port. This will help the state to become a hub for lithium ion batteries. More such refineries are needed. Demand of Lithium will hit 1.3 million tonnes in this decade. So, securing the supplies, more refineries and state of the art infrastructure for transport is the way forward.
India has started to make her move towards self reliance, Australia is ready to collaborate too. Currently China dominates the market. It focused for years on building complete supply chain with huge advantage of lithium resources in their own country. This need to change, and for that top most priority is of course supplies. Market is really huge and domination of one country is not supposed to be good for healthy supply chain.
India is yet to see a boom in the sale of EVs. EV market is one of the largest consumer of lithium ion batteries. Attracting companies like Tesla and supporting our own startups in this field through the attractive government policy will do the job.
Lithium is going to play the key role in next decade. Being the largest producer of lithium, Australia's expertise in mining equipment, technologies and services are very helpful. It also offered help to develop our own lithium resources. Strategy is simple. Arrange the supplies of lithium, setup refineries and market is already up for grab. Throughout the article I am emphasizing more and more on supplies, that is only because it holds the key here. Lithium only constitutes 0.002% of Earth's crust, its extraction process is also complicated. Unfortunately, we have to rely only on imports.
Parallelly, India has to come up and implement policies for promoting the use of EVs. FAME is one such policy to promote manufacturing of electric and hybrid vehicle technology and to ensure sustainable growth. Recently Norway became the first country in the world where sale of EVs overtaken the petrol and diesel powered vehicles.
India is betting big on lithium, and in this tough race she will definitely seek all possible support from her allies like Australia and USA.