Critical mineral imports, acquisition of mines could feature in India - Chile FTA discussions
The Hindu Business Line - 30 April 2024
India’s Mines Ministry has suggested, discussions regarding India – Chile Free Trade Agreement (FTA) cover securing of critical minerals ; along with acquisition of copper and lithium mines and commercial off-take agreements at G2G (government -to- government) levels, an official aware, told businessline.
Currently, both countries have a preferential trade agreement (PTA) which is a limited trade arrangement, and not an FTA.
A delegation of industry and government officials had recently visited Chile to explore scope of larger economic cooperation, including securing critical mineral partnerships.
G2G agreements
Previously, India’s Mines Ministry signed a non-disclosure agreement with ENAMI, the state-owned company of Chile, for exchange of information and sharing of data.
“So, we are looking at G2G agreements for exploration, acquisition of mineral blocks and subsequent off-take of these critical minerals – if exploration activities are successful. In this case, the mineral blocks under-discussion is that of copper and lithium. These agreements would be on the lines of what we had done in case of acquiring lithium blocks in Argentina,” the official said.
Earlier this year (in January), India made its first ever acquisition of lithium blocks overseas, in Argentina. Five blocks were acquired through the state-run entity, KABIL or Khanij Bidesh India Ltd - a JV of NALCO, Hindustan Copper and MECL. Around ₹200 crore will be invested towards exploration and other mining activities there, over a five-year-period.
Lithium Triangle
Chile, along with two other LatAm nations, Argentina and Bolivia, form the world’s Lithium Triangle, accounting for majority of the resources globally.
Lithium, also called white gold, is pivotal for usage in EVs (electric vehicles), batteries – mobile phones and cars, and other energy storage solutions. It is the cornerstone of India’s transition to green energy. The country is dependent on imports.
On the other hand, copper, is also identified as a critical mineral in India, and finds widespread usage in power cables, wind turbines, electric vehicles and solar panels. Copper demand, including its price movement, is seen as a key indicator of economic health.
“Our suggestions to the Commerce Ministry have been to include discussions on critical minerals, specially copper and lithium, in the FTA talks with Chile,” the official said.
100-day Action Plan
Priority list for the Ministry, under the first 100-day plan, include carrying out the fourth tranche of critical mineral auctions, covering 20 blocks. Ministry plans to announce auctions by June-end.
Also, on cards are finalising rules and announcing the auction for India’s first ever offshore mineral blocks. Auctions for 10-odd blocks – covering construction sand, lime-mud, among others – are expected around June- July.
This apart, the Ministry will also announce winners for the first tranche of critical mineral auctions. Some six mineral blocks mostly relating to fertiliser minerals – out of 20 announced blocks – got more than five bids and went into the second round.
