India and Australia are joining together in a deal which could see Australian lithium used in the first Indian refinery to produce battery grade material for electric cars.
Neometals, an Australian company with an interest in the Mt Marion lithium mine near Kalgoorlie in Western Australia, has teamed up with Manikaran Power to jointly fund a study into the refinery.
The study is expected to take between 18-and-24 months and could lead to a final investment decision in first half of the year 2021.
India Enters A Market Dominated By Chinese and American Companies
Though a modest step towards creating a new business the deal is significant because it is the first between an Australian and and Indian company whereas most earlier Australian lithium projects have been with Chinese and American companies.
If the India/Australia lithium project proceeds it will be on a 50/50 joint venture basis with the Australian company providing its skills in mining and early-stage processing of lithium ore, sometimes called spodumene.
The Indian company will take the lead in financing at least half the capital cost as well as securing regulatory approvals, Indian Government subsidies that might be available and site selection.
The chief executive of Neometals, Chris Reed, said the Australian and Indian companies shared a common belief in strong future demand for lithium, driven by the electrification of transports and a shortage of renewable energy.
A Compelling Deal
“Given India’s growth projections for electric vehicles and lithium battery manufacturing capacity, this opportunity to partner India’s first domestic lithium development and potentially realize value from downstream processing our offtake from Mt Marion is compelling,” Reed said.
“Manikaran has significant on-the-ground presence and commercial standing in India to assist with site location, regulations, access to finance, utilities and (chemical) reagents, and is part of a group of companies with broad competencies that enhance their value proposition for partners.”
Manikaran was described by Reed in a statement filed today at the Australian Stock Exchange as India’s third biggest power trading company and one of 11 companies under the umbrella of the Manikaran Group.
The lithium joint venture should go some way to smoothing diplomatic and business links between Australia and India since the strain caused by the painfully slow approvals process for the Adani Group’s Carmichael coal mine in the Australian State of Queensland.