CIL scouting for Lithium, Nickel, Cobalt mining projects abroad, due diligence underway

New Delhi: In a bid to diversify its operations, state-run Coal India Limited (CIL) is scouting for critical minerals like Lithium, Nickel and Cobalt mining projects overseas and is conducting first-level due diligence before the submission of a non-binding offer, a top official at the Maharatna company told PSU Watch. Coal India’s Director (Business Development) Debasish Nanda said that the company has the financial heft to be able to invest in these projects and the only challenge before the Maharatna PSU is to find a project that is commercially viable.

CIL looking to invest in Lithium, Nickel & Cobalt mining projects

Nanda said that Coal India is actively scouting for Lithium, Nickel and Cobalt mining projects. “We are looking at the Lithium Triangle (Argentina, Bolivia and Chile). We are also looking at Australia. For Cobalt, we are looking at the Democratic Republic of the Congo. There are some new finds in Canada as well. Wherever we find a commercially viable option, we will go there,” he said.

First stage of due-diligence underway, various biz models being considered

The first stage of due diligence is underway and various kinds of business models are being considered right now, said Nanda. Coal India is considering equity in lieu of medium-to-long-term off-take rights. “Some countries say that you can’t take Lithium ore away, you have to process it there. We don’t mind processing it there. But then we will need to tie up with a technology partner for refining. Then there are other countries who are allowing the offtake at the beneficiation stage — as Lithium oxide. So, we will weigh our options. For example, consider South America and Australia. Freight charges will be very high if we bring Lithium from South America. So, we might want to convert it to Lithium Hydroxide and get it here. But if it is Australia, we can bring it as Lithium Oxide. So, those commercial considerations are currently underway. We hope to work out these finer details in the next six months,” Nanda said.

What is the importance of this plan?

India is 100 percent dependent on imports to meet its requirement of Lithium, Cobalt and Nickel. While Lithium and Cobalt are predominantly used in Electric Vehicle (EV) batteries and battery energy storage systems (BESS), Nickel is also used in stainless steel manufacturing apart from EV batteries and BESS. Both EVs and BESS will be an integral part of the energy transition journey because energy produced from renewable sources will have to be stored owing to its intermittency. India is planning to put in place manufacturing facilities for BESS and will need critical minerals in order to do so.

For Coal India, the foray into the critical mineral business value chain marks an attempt to diversify its business portfolio beyond coal. At an annual general meeting held in August 2022, CIL amended its Memorandum of Agreement (MoA) to include new businesses like Advance Chemistry Cells and Energy Storage Devices Manufacturing Value Chain, etc, in the Main Object Clause. And the acquisition of critical mineral assets will be crucial to implementing these plans.

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