Khanij Bidesh India Ltd, a joint venture of state-owned miners, has signed a Rs 200 crore deal with an Argentinian government-run mining enterprise for exploring and exploiting five lithium blocks in the South American country’s Catamarca province, Union Minister for Coal and Mines Pralhad Joshi announced in a post on X.

“The project will help India strengthen lithium supplies, while developing lithium mining and downstream sectors of both the countries,” Joshi said on Monday.

Lithium, a rare mineral found in hard rocks and dissolved in saline groundwater, is an essential component in rechargeable batteries used in electric vehicles and electronic gadgets like smartphones, and laptops.

The supply of lithium for these industries is of strategic importance as governments across the world plan to meet their decarbonisation goals by boosting sales of electric vehicles.

However, the process of lithium extraction is not sustainable, requiring billions of gallons of groundwater and potentially contaminating some of it for centuries. The lithium mining process also generates a huge amount of waste.

“KABIL [the venture] will start exploration and development of 5 lithium brine blocks...covering an area of about 15,703 hectares,” the Union Ministry of Coal said in a statement. “KABIL has received exploration and exclusivity rights...to evaluate, prospect and explore and subsequent to existence, discovery of lithium mineral, exploitation right for commercial production.”

In December, Ministry of Mines Secretary VL Kantha Rao had confirmed that preliminary talks were being held with Argentina and Bolivia to secure lithium for India.

The joint venture, also called KABIL, was formed in 2019 between India’s National Aluminium Company, Hindustan Copper Ltd and the Mineral Exploration Company Ltd, with the aim of securing strategic minerals such as lithium and cobalt from overseas, reported PTI.

Argentina, Chile and Bolivia together hold more than half of the world’s lithium reserves and are known as the “lithium triangle”, reported PTI. Argentina alone holds the third-largest lithium reserve in the world.

India, which has largely relied on imports from countries such as Hong Kong, China, and Indonesia for lithium supply, had announced in February that it discovered 5.9 million tonnes of lithium resources in the Salal-Haimana area of Jammu and Kashmir’s Reasi district.

This is the first major lithium reserve that has been found in India.