#GEO POLITICS
$3 Trillion Lithium Found in J&K || Natural Resources
India has made a groundbreaking discovery in the realm of natural resources! The Geological Survey of India recently announced the unearthing of 5.9 million tons of lithium in the Salal-Haimana area of Reasi district in Jammu and Kashmir. This significant find has the potential to transform the region’s economy and significantly impact the global geopolitics of natural resources.
Lithium, a rare element, plays a crucial role in the production of electric vehicle batteries and other high-tech devices. Here are some key points about this discovery:
Importance of Lithium: Lithium is a key component in rechargeable batteries that power gadgets like smartphones, laptops, and electric cars. With the growing demand for electric vehicles, securing a domestic source of lithium is vital for India’s sustainable energy transition.
Boosting Electric Car Adoption: Experts believe that this discovery could aid India’s ambitious goal of increasing the number of private electric cars by 30% by 2030. By reducing dependence on imports from countries like Australia and Argentina, India can accelerate its transition toward cleaner transportation and cut carbon emissions.
Global Context: Around the world, the demand for rare metals, including lithium, has surged as countries seek greener solutions to combat climate change. China, for instance, signed a $1 billion deal to develop Bolivia’s vast lithium reserves, estimated at 21 million tons—the largest in the world.
Environmental Considerations: While lithium is essential for clean energy technologies, its extraction process is not without challenges. It involves mining hard rocks and underground brine reservoirs, often found in Australia, Chile, and Argentina. Unfortunately, this process consumes significant water, releases substantial carbon dioxide, and scars the landscape.
Water Scarcity Concerns: In water-scarce regions like Argentina, extracting lithium from underground reservoirs requires copious amounts of water, leading to protests from indigenous communities. Balancing resource extraction with environmental conservation remains a critical issue.
In summary, India’s newfound lithium reserves hold immense promise for advancing sustainable energy solutions. As the world strives to meet global climate targets, responsible mining practices and innovative technologies will be essential to harnessing lithium’s potential while minimizing environmental impact.
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Hello friends, on 9th February, the Ministry of Mines of India made an announcement which was heard by some people and they started inviting Elon Musk to the country. In fact, he said that in the Riyasi district of J&K, almost 60 lakh tonnes of lithium have been found. Now the thing is that lithium is called white gold today. And from the batteries in your smartphone to the cars of electric cars, where lithium ion batteries are being used, there is a need for lithium. And in today's world, it has become a very valuable natural resource.
According to one estimate, if you look at the world's lithium reserves, which country has the most of it? So, Chile comes in the first place with 9.2 million ton reserves. After that, Australia is in the second place with 5.7 million tons. Does this mean that India has the world's second largest reserves of Lithium. Does this mean that India has won the lottery? Like Gulf countries became rich with the help of oil, can India become rich with the help of Lithium?
In today's video, let's try to answer all these questions.
India has got 5.9 million tonnes of Lithium Bandaar for the first time in J&K's state district.
Lithium battery is in the package which goes into the house. We have found out about Lithium Bandaar.
Let's clear one thing first that there is no doubt that Lithium is a very valuable metal.
In all your smartphones, whichever company's smartphone you are using, either put Lithium ion battery or lithium polymer battery. Apart from this, almost all the electric cars that are being manufactured today, be it any company, almost all of them have lithium batteries. This is because, in comparison to other batteries like lead acid batteries, lithium batteries have a lifespan of almost 10 times longer. Their weight is 50-60% less and their efficiency is also much higher. Even for the storage of renewable energy,
whether it will be possible to mine it economically or not, we don't know. How much will be the cost, what will be the environmental impact, we don't know much about all these things. Because in this graph, see, on the inferred resources, there are indicated resources, then measured resources, proven reserves, probable reserves, on the y-axis, we know how much geologically we know about a place. And on the X-axis, we have other factors like whether it will be economically possible to mine or not. Geological Survey of India has put it in the G20 category of initial assessment. They have said that more research and studies are needed to make it reach the G1 or G2 category. In the above categories, they can be called mineable reserves.
And only after that, the Ministry of Mines will know how much lithium is available, how much can be extracted, what is its quality. And it can take a minimum of 5 to 7 years to reach this point, friends, until we commercially exploit it. Two years ago, in 2021, a similar news came from Karnataka, when the government said that they have received 1600 tons of lithium. That lithium was also of the inferred category. But in the latest news, the number of Lithium is many times more
so its importance is also that much. In the beginning of the video, I told you that the largest reserves of Lithium are in the Chilean country of South America. 9.2 million tonnes. Second number is Australia at 5.7 million tonnes. Does this mean that India is now at second number?
It is not so because in India, the reserves are in the Inferred resource category. If we compare it with this logic, then Bolivia has the most lithium reserves in the world in the category of inferred resources, 21 million tonnes. The world's known supply is at 89 million tonnes. This means that India has a total of 5.5% lithium reserves, which is a huge number. If we compare the top players in the lithium industry, then more than half of the global lithium reserves are in three South American countries.
Chile, Argentina and Bolivia. On the other hand, China is the number one player in producing lithium-ion batteries. Out of all the lithium-ion batteries produced worldwide, more than 75% are produced in China. And according to a recent study by the International Energy Agency, China controls 58% of the global lithium processing. 2nd is Chile at 29% 3rd is Argentina at 10%.
In case of Lithium extraction Australia has 52% share then Chile at 22% and then China at 13% Interesting thing to note is that in China, Lithium reserves are not that high but still, processing is done in China the most.
They have focused so much on developing their industry. Now, while mining Lithium, obviously, there is a heavy environmental cost. Like other mining, in Lithium mining, there is water, soil and air pollution. The process of extracting Lithium from its ore is a very water intensive process. A lot of water is wasted in this. According to an estimate, to produce 1 ton of Lithium, 2.2 million litres of water This is the same water as an Olympic sized swimming pool 2. Lithium is extracted from hard rocks and underground brine reservoirs Does this mean that we will see more incidents like Joshi Math from Lithium mining?
Of course, we will see more if the government ignores the environmental impact 3. What about the air and soil pollution. It is true that lithium is being used in the production of electric vehicles and batteries which is reducing overall carbon emissions. But here, the carbon emissions from mining cannot be ignored and we have to keep a balance. We have to see who is causing more damage and what is the better option. In countries like Argentina and Bolivia, protests were seen due to this environmental impact. But for a second, let's assume that the 60 lakh ton reserves that were mined are proven reserves, they will be economically profitable to mine, the environmental impact will not be much, it is being taken into account. So what impact will it have on the Indian economy and geopolitics? This is the most interesting thing. Because if we take all these assumptions, then India's situation will be very similar to the situation of the Gulf countries. Their fate was turned upside down when they got oil.
It is very interesting to see in history how different countries reacted and what impact it had when they got abundant natural resources in a country. There are many positive examples of this. Except for the Gulf countries, Norway where oil was found, Australia, small countries like Botswana and Rwanda, whose condition was good, but along with that, there are also counter examples. Countries for which natural resources have become a curse and the country has to suffer losses because of them.
Like Congo, Bolivia and Netherlands are examples. Netherlands is so famous that the whole phenomenon is named around it. Dutch Disease. What is this Dutch Disease? You can also call it a Resource Curse. A disease that is found in countries where natural resources are abundant. It seems that a country should become rich with the help of natural resources, but it's the opposite. In 1977, Economist magazine used the word Dutch disease for the first time, explaining the case of Netherlands.
Actually, in 1959, heavy gas reserves. Because of this, they started exporting natural gas. The economy benefited a lot. But, after 10 years, the period from 1970 to 1977, the unemployment rate increased to 5.1%. Which was around 1% earlier. Private sector investment decreased.
Economists were very confused about how this was happening. Is this gas found to be a treasure or a curse? How would you feel if I tell you that this treasure is a curse? There are two ways to look at this. First, when a country has a lot of natural resources, then that natural resource is exported to other countries. By doing this, it means that foreign investment is coming to your country. If the export of that natural resource is high and other people want to invest in your country,then it means that the price of your currency will be appreciated. In the case of Netherlands, you can say that their currency will be stronger. Now, becoming stronger currency is a good thing, but as I explained in the video of 1 dollar equals to 1 rupee, the exchange rate of currency being up or down is not 100% right or 100% wrong. Some industries benefit from it, some industries suffer losses. If the value of our country's currency increases, then it will be difficult to export other goods because the price of goods exported from our country will increase. And this will be seen in other sectors of the country.
So, if we take the example of Netherlands, their gas exports were very good. But the other industries in the country, like the manufacturing industry, exporting goods from other countries, that became more expensive. These other industries could not sustain their businesses and they had to incur losses.The second impact is on the labour market of Dutch disease. When oil or lithium is discovered in a country, then labour is needed to mine, and jobs will be created in that sector. People will shift from other sectors to this sector, and this can have a bad impact on other sectors. So, roughly speaking, Dutch disease means that if a country has a lot of natural resources, then the rest of the sectors of that country, if they are not developed,they will not be able to compete with the natural resources sectors and they will start to fall. This is what we saw in the Netherlands and in many other countries. On top of that, the mining sector is a sector in which skills are not needed in jobs. Knowledge is not needed. The people who are working in mining industry don't have to be educated. So if more jobs are shifted to such sectors, it will affect people's skill development and knowledge.
And it will also impact the country's long term growth. If we look at the Gulf countries, they avoided the Dutch disease very easily because they didn't have any other sector. Literally, Gulf countries don't have any economy if oil is not found there. The currency of these countries could have increased in value, but it would have had no impact on other sectors, because these countries are not exporting anything else. Another example is developed countries like Australia and Norway. Resources are available here. These countries avoided the Dutch disease by diversifying in other sectors. If we talk about Norway specifically, it was fortunate that the government of this country spent money on the education of its people Spent money on building good infrastructure, gave high quality of life to the people And all this was done before the discovery of oil You heard it right, it was in 1969 that the first oil field was discovered in Norway Till then, Norway already had a strong democratic government Public institutions were very strong Economy was already very diversified Countries like Venezuela and Iran were not that fortunate. Oil was found in 1908 in Iran and in 1922 in Venezuela. In both these countries, other sectors were not developed, people were not educated.
Due to oil, all money and labour was attracted to that sector. And the whole country was thinking of surviving with the help of just one resource. And in both these countries, the rest of the economy had to bear heavy losses. There is another sure shot way to save from Dutch disease is to use the money from natural resources for the welfare of the people. It should not be that only 1-2 billionaires are becoming rich because of the oil. The oil is doing good to every citizen. The easiest way to do this is to create a sovereign wealth fund. The excess money that is being earned by selling that natural resource.
should be collected in a fund and that money should be used to diversify the economy and develop the country. Norway's wealth fund today is more than 1 trillion dollars. The world's largest sovereign wealth fund. This excess money is spent on education and infrastructure. And this is a lesson that even the Gulf countries are paying attention to. Countries like UAE and Saudi Arabia which were dependent on oil are trying to diversify their economies. Dubai has become a tourism hub.
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