India’s Overseas Critical Mineral Quest

Critical Mineral Latest News

• Critical minerals such as lithium, cobalt, nickel, rare earth elements and graphite are indispensable for electric vehicles (EVs), batteries, renewable energy, electronics, defence and advanced manufacturing. 
• With domestic reserves and production insufficient to meet future demand, India is seeking overseas mineral assets through Khanij Bidesh India Ltd. (KABIL).
• India’s critical-mineral strategy combines domestic exploration, overseas asset acquisition, recycling, substitution and processing capacity to reduce vulnerability to concentrated global supply chains.

KABIL and India’s Overseas Strategy

• Established in 2019, KABIL is a joint venture of National Aluminium Company Ltd. (NALCO), Hindustan Copper Ltd. (HCL) and Mineral Exploration & Consultancy Ltd. (MECL). 
• Its mandate is to identify, explore, acquire and develop overseas critical-mineral assets.
• However, KABIL’s expansion has faced difficulties in Australia, Vietnam, Mali and Chile, with several proposed investments being delayed or abandoned. Argentina remains the principal area of tangible progress.

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Relative Success and Opportunity Lost

• Argentina:
  • KABIL has acquired five lithium brine blocks in Catamarca province. It is also evaluating seven additional greenfield lithium blocks in Catamarca and negotiating two more lithium projects in Jujuy.
  • The progress in Argentina reflects India’s attempt to secure lithium resources at source and develop a more resilient supply chain for the emerging battery economy.
• Australia:
  • In December 2024, a consortium of KABIL, Coal India Ltd. (CIL), Oil India Ltd. (OIL) and ONGC Videsh Ltd. (OVL) submitted a non-binding offer of $184 million for stakes in Australia’s Mt Marion and Wodgina lithium mines.
  • After the bidding process was reopened, the consortium revised its offer to $233 million in September 2025. 
  • Nevertheless, the assets were ultimately acquired by South Korea’s POSCO, which paid $765 million for 15% stakes in each mine.
• Why India lost the bid:
  • KABIL identified several lessons from the failed transaction –
    • High asset valuations amid intense international competition.
    • Volatility in lithium prices, creating uncertainty over project profitability.
    • Wide divergence in long-term spodumene concentrate price forecasts.
    • Absence of an adequate domestic value chain for spodumene concentrate.
    • Limited time for consortium partners to complete due diligence.
    • Financial constraints and difficulties in mobilising large amounts of capital.
  • The episode demonstrates that acquiring mineral resources alone is insufficient; India also requires domestic capabilities in processing, refining, technology, logistics and manufacturing.

Chile – Financial Constraints and Institutional Delays

• KABIL also explored a lithium brine project in Chile involving a high-value investment. 
• After signing a non-disclosure agreement (NDA) in October 2025, it obtained initial access to the project’s data room.
• Given the scale of investment, KABIL decided to pursue the opportunity jointly with other PSUs. 
• However, due diligence could not be completed within the available timeframe, preventing submission of a bid.
• In another opportunity involving Chile’s state-owned mining company ENAMI, KABIL explored the entire lithium value chain—from exploration and extraction to processing and commercialisation. 
• It eventually transferred the opportunity to CIL because of limited financial capacity and the substantial investment already required for its Argentine projects.

Structural Challenges Experienced by KABIL

• Four constraints:

• • Financial limitations: Critical-mineral projects require large upfront capital and have long gestation periods.
  • Commodity-price volatility: Lithium prices can fluctuate sharply, making high-priced acquisitions risky.
  • Global competition: Countries and companies with deeper financial resources can outbid Indian entities for strategic assets.
  • Geopolitical and country risks: Mining investments are exposed to regulatory changes, political instability, local opposition and resource nationalism in host countries.
• India must therefore move from a narrow “mine acquisition” approach towards an integrated overseas mineral strategy involving sovereign partnerships, risk-sharing finance, long-term offtake agreements and domestic processing capacity.

Way Forward

• India should strengthen KABIL through greater financial autonomy, professional project evaluation, faster inter-PSU coordination and specialised mineral expertise. 
• Public-sector entities can partner with private companies, foreign governments and global mining firms to distribute risks.
• Simultaneously, India needs to develop a domestic critical-mineral value chain, including beneficiation, refining, battery-material production and recycling.
• The long-term objective should be mineral security rather than ownership of individual mines.
• Diversified suppliers, strategic stockpiles, recycling, technological substitution and resilient supply chains can collectively reduce India’s external vulnerability.

Source: IE