Nalco JV KABIL begins hunt for lithium in Latin America, eyes acquisition

The firm is mandated to scout for and secure 12 mineral assets in which the country lacks ample reserves and has to bank on imports

Khanij Bidesh India Ltd (KABIL), a joint venture (JV) company floated by National Aluminium Company (Nalco), Mineral Exploration Corporation Ltd (MECL) and Hindustan Copper Ltd (HCL) has begun the hunt for lithium in Argentina, Brazil and Chile -- collectively called the ABC countries.

“The hunt for lithium is to fructify efforts for a possible acquisition. KABIL is mandated to scout for and secure 12 mineral assets overseas where the country lacks ample reserves and has to bank on imports,” said a source familiar with the development.

Nalco owns 40 per cent stake in KABIL, while MECL and HCL have 30 per cent ownership each in the company.

The JV company has the mandate for acquisition, exploration, and processing of strategic minerals abroad for commercial use and for supplying to meet the domestic requirement. The objective of setting up KABIL is to ensure a consistent supply of critical and strategic minerals to the Indian domestic market. While KABIL would ensure mineral security of the nation, it would also help in realising the overall objective of import substitution.

Twelve strategic minerals have been identified and the initial focus will be on lithium and cobalt. Preliminary due-diligence of identified assets shall be initiated soon. Earlier in February 2019, the central government's planning think tank NITI Aayog had cleared the proposal to form the JV company by the three CPSEs (central public sector enterprises) to acquire minerals that are not available in India. It may be noted that KABIL will be among a handful of companies in the country for the acquisition of mineral assets abroad.

KABIL would carry out identification, acquisition, exploration, development, mining, and processing of strategic minerals overseas for commercial use and meeting the country’s requirement of these minerals. The sourcing of these minerals or metals is to be done by creating trading opportunities, G2G (government-to-government) collaborations with the producing countries or strategic acquisitions or investments in the exploration and mining assets of these minerals in the source countries.

The new company will help in building partnerships with other mineral-rich countries like Australia and those in Africa and South America, where Indian expertise in exploration and mineral processing will be mutually beneficial bringing about new economic opportunities.