Topics Covered:
- Bilateral, regional and global groupings and agreements involving India and/or affecting India’s interests.
India gains access to Bolivian Lithium Reserves
What to study?
- For Prelims: Uses and significance of Lithium.
- For Mains: India’s energy needs and significance of this bilateral agreement.
Context: India and Bolivia have signed an agreement for the development and industrial use of lithium, a prime component used to power electric vehicles and cell phones.
Key facts:
- India and Bolivia agreed to forge a mutually beneficial partnership to facilitate Bolivian supplies of lithium Carbonate to India and foster joint ventures for lithium battery/cell production plants in India.
- This agreement will make Bolivia, which is known to have one-fourth of the world’s lithium reserves, one of the major provider of metal for India’s e-mobility and e-storage needs.
- The agreement facilitates mechanisms for the commercialization of Lithium Carbonate and Potassium Chloride produced in Bolivia by Yacimientos de Litio Bolivianos Corporación (YLB – Corporación).
Significance of the agreement:
- Bolivia is estimated to hold over 60% of the world’s reserves for lithium but has not yet started producing it commercially.
- India is the second largest manufacturer of mobile phones in the world and has the ambitious goal of 30 per cent electric vehicles by 2030. But India imports all its lithium-ion batteries since India has no known sources of lithium, and zero lithium-ion battery manufacturing capabilities currently.
- As a result, India is heavily dependent on China, Taiwan and Japan for import, especially of batteries required for portable electronics.
- With this agreement, number of Indian companies setting up production capabilities in Bolivia goes up, as well as the import of lithium to India.
- Domestic production is also set to see a boost, from the automotive perspective. Further, the arrival of hybrids and electric vehicles from as early as 2020 onwards, will force manufacturers to look at local production.
- This agreement could also turn out to be the backbone for the recently launched FAME India policy (Faster Adoption and Manufacture of (Hybrid and) Electric Vehicles) and will also give a substantial push to India’s ambition to have at least 30 per cent of its vehicles run on electric batteries by 2030.
