NMDC in talks to invest in lithium exploration companies in Australia

Investment would be voa NMDC's Perth-based arm, Legacy Iron Ore, which is already prospecting for iron ore, gold and base metals there

With the race for lithium intensifying across the world, Indian public sector miner NMDC is in discussion to invest in lithium-focused exploration firms in Australia to secure offtake for India.

The investment in Australia would be through NMDC’s Perth-based subsidiary, Legacy Iron Ore, which is already doing exploration in iron ore, gold and base metal assets.

Sumit Deb, chairman and managing director, NMDC, said, “The government mandate was that we need to pick up some offtake. We are working on it. The investment would be attached to an offtake.”

“Right now, it’s at a nascent stage,” he added. He was speaking on the sidelines of the Global Mining Summit organised by CII in partnership with the ministry of mines and coal.

Sources close to the development said that Legacy was in discussions with 4-5 exploration companies for picking up stake.

“We would like to take equity in junior exploration companies and secure offtake for India,” the sources indicated. These companies, the sources said, were at an advanced stage of exploration.

Legacy, it may be mentioned, has had success in discovering a major iron ore resource at Mt. Bevan in Western Australia.

On lithium, sources explained, “There is a madness for lithium. And right now, the offtake from big companies is sold out.” NMDC was also exploring offtake from the big companies.  

It’s not just lithium, NMDC is also scouting for opportunities in nickel in Australia. Nickel is a key ingredient in lithium-ion batteries used in electric vehicles (EVs). With the government focus on increasing EV penetration, the demand for lithium and nickel is expected to see a surge and end-users are already looking to secure supply chains.

India’s imports of lithium and lithium-ion in FY21 stood at Rs 8,984 crore in FY21 and increased to Rs 13,838.22 crore in FY22. China and Hong Kong were the major sources of imports.

However, Australia is the world’s largest producer of lithium. Addressing the summit, Catherine Gallagher, Head of the Australian Trade and Investment Commission (Austrade) in South Asia, said, in June 2020, Australia’s relationship with India was elevated to a Comprehensive Strategic Partnership. “At the same time our governments signed an MoU on critical and strategic minerals.”

“Only last month 14 representatives from Australia’s critical minerals ecosystem visited India under the auspice of my agency,” she added.