India Considers Incentives for Lithium Processing Facilities
India is exploring ways to encourage private companies to establish lithium processing facilities within the country. This move aims to bolster its nascent lithium mining industry and secure a stable supply of the critical mineral for electric vehicle (EV) batteries.
The government is currently formulating a comprehensive critical minerals policy that will encompass all stages of the lithium value chain, from exploration and mining to processing and value addition. This policy is expected to include incentives for companies to set up lithium processing plants within India.
The exact nature of these incentives is still under discussion, but the government is likely to draw inspiration from policies implemented in countries like Australia and Canada. Potential incentives could include subsidies, tax benefits, and other forms of financial support.
This initiative comes in the wake of India's discovery of its first lithium reserves last year. The country, the world's third-largest carbon emitter, has identified 30 minerals, including lithium, as critical for its clean technology ambitions in sectors like electronics, telecommunications, transportation, and defense.
With the growing demand for EVs and the need to reduce reliance on imported lithium, establishing domestic processing facilities is crucial for India's clean energy transition. Several companies, including SoftBank-backed Ola Electric, Vedanta Ltd, and Jindal Power, have already expressed interest in bidding for critical mineral blocks, including lithium. A shortlist of bidders is expected by July.
By offering incentives for lithium processing, the Indian government aims to attract investment, develop its domestic lithium industry, and secure a reliable supply of this essential mineral for its burgeoning EV market.