India and Australia sign MoU for joint exploration of Lithium and cobalt.

Why in news?

• The Government of India and Australia has committed to invest USD 6 million jointly to explore Lithium and Cobalt mines in Australia in the next six months.
• Last year 2021, a Government to Government (G2G) Memorandum of Understanding (MoU) was signed between Government of India and the Government of Australia through Ministry of Mines and Critical Minerals Facilitation Office (CMFO) respectively for co-operation in the field of mining and processing of Critical and Strategic Minerals.
• Following which a detailed collaborative framework has been signed between Khanij Bidesh India Limited (KABIL) and Australia’s Critical Minerals Facilitation Office (CMFO) for carrying out a joint due diligence of select greenfield and brownfield projects, identifying lithium and cobalt mineral assets for investment and acquisition of the assets in Australia.
• Engagements are also underway with other source countries (primarily Latin-American countries) such as Argentina, Bolivia, Chile etc., which are endowed with lithium and cobalt in hard rock formations and in brine.
• The MoU includes building an Australia-India partnership in the critical mineral ecosystem; development of a robust and commercially-viable critical mineral supply chain to support sustainable production: and ensure reliable supplies of the materials needed to fuel sectors such as transport, energy, telecommunications, medicine, aviation and defence.

About Lithium policy in India:

• Lithium is a key component in the battery used in Electric Vehicles (EV).
• India, through the Production Linked Incentive (PLI) Scheme, is offering Rs 18,100 crore incentives for companies to build battery cells locally for Electric Vehicles (EV).
• China and Hong Kong are the biggest lithium battery suppliers to India.

About Khanij Bidesh India Limited (KABIL)

• KABIL is a joint venture company set up with the participation of three Central Public Sector Enterprises (CPSEs) namely, National Aluminium Company Limited (NALCO), Hindustan Copper Limited (HCL) and Mineral Exploration Company Limited (MECL).
• The objective is to ensure a consistent supply of critical and strategic minerals to the Indian domestic market and ensuring mineral security of the Nation by Import substitution.