GS Paper: GS1-12.Distribution of key Natural Resources (world, South Asia and Indian subcontinent)

Why in the News

Lohum, an Indian producer of critical minerals, has dispatched its first shipment of lithium ore from Zimbabwe. The shipment marks the start of its mining operations in the southern African country and makes it the first domestic company to produce lithium from overseas assets. India has no commercial lithium production of its own, and its battery supply chain runs on imported cells and refined lithium compounds. The tension is that ore is not a battery input until it is converted into a lithium chemical, and that conversion capacity sits almost entirely outside India.

What does the Zimbabwe holding contain?

1. The blocks: Lohum has secured rights to 10 lithium mining blocks in Zimbabwe’s Matabeleland South Province, covering about 1,100 hectares.
2. The resource estimate: The blocks carry estimated deposits of 30 million to 40 million tonnes of ore.
3. What that converts to: The assets are expected to support production of around 3,00,000 metric tonnes of lithium carbonate equivalent, the standard unit that restates any lithium bearing material as the weight of lithium carbonate it would yield.
4. The valuation: The holding carries an estimated value of about $7 billion at current prices.

Why does this matter for India’s mineral security?

1. The domestic find is not yet a mine: An inferred resource of 5.9 million tonnes of lithium ore at Salal-Haimana in Reasi district, Jammu and Kashmir, announced in 2023, has been put to auction and failed to draw a successful bidder across two rounds.
2. State led acquisition has moved slowly: Khanij Bidesh India Ltd, a joint venture of National Aluminium Company, Hindustan Copper and Mineral Exploration and Consultancy, signed an exploration and development agreement in January 2024 for five lithium brine blocks in Argentina’s Catamarca province, and that project is still at the exploration stage.
3. The demand is already committed: Lithium is the irreducible input for the lithium ion cells that India’s electric vehicle programme and its grid storage tenders depend on, and those cells are currently imported.

Where does Zimbabwe sit in global lithium supply?

1. Africa’s largest producer: Zimbabwe is the largest lithium producer in Africa and holds the continent’s largest hard rock lithium reserves, in spodumene and petalite bearing pegmatites.
2. Chinese firms own the major assets: The main producing mines are Chinese owned, including Bikita, Arcadia and Sabi Star, which is why an Indian entry into the country’s lithium sector is notable in itself.
3. The beneficiation push: Zimbabwe barred exports of unprocessed lithium ore in December 2022 to force value addition inside the country, and has signalled further restrictions on exporting lithium concentrate.

Challenges to overseas critical mineral acquisition

1. Host country rules change after the capital is committed: Resource nationalism converts an export project into a processing obligation once the mine is built, and the investor has no exit. Eg. Indonesia banned nickel ore exports in January 2020 and forced foreign investors to build smelters inside the country.
   The Fix: Negotiate a stabilisation clause and a fixed export window into the mining agreement before the first tranche of capital is drawn.
2. Price risk is severe in this mineral: Lithium prices fell by roughly 80% from their late 2022 peak, which stranded projects sanctioned at the top of the cycle. Eg. Several Australian spodumene operations curtailed output or went on care and maintenance through 2024.
   The Fix: Anchor project financing to a long term offtake contract carrying a floor price, rather than to spot lithium prices.
3. Refining is the real chokepoint: Ore has no use in a cell until it is converted to battery grade carbonate or hydroxide, and China holds the majority of global lithium chemical refining capacity. Eg. Cell manufacturing under India’s Production Linked Incentive scheme for Advanced Chemistry Cell battery storage still depends on imported cathode active material.
   The Fix: Make an approved domestic conversion plant a condition attached to state support for any overseas mining acquisition.
4. The logistics run through a third country: Zimbabwe is landlocked, so every tonne of ore moves overland to a port in Mozambique or South Africa before it can be shipped. Eg. The Beira and Durban corridors carry the bulk of Zimbabwe’s mineral exports and are the constraint on volume.
   The Fix: Contract long term rail and port slots on the corridor rather than moving cargo on spot road haulage.

Conclusion

An Indian company now has ore coming out of the ground abroad, which is a step no domestic firm had taken before in lithium. What that changes is access to the raw material. What it does not change is the conversion and cell making capacity that turns ore into a battery, which still sits elsewhere. The marker to watch is whether this shipment is followed by a committed conversion facility, in Zimbabwe or in India, since a mining right without a refinery leaves the dependence exactly where it was.

Back2Basics

1. National Critical Mineral Mission: Launched in January 2025 and administered by the Ministry of Mines, to build self reliance across the critical mineral value chain.
2. Outlay: Rs 16,300 crore of government expenditure over seven years, alongside an expected Rs 18,000 crore of investment by public sector undertakings.
3. Coverage: Exploration within India and in offshore areas, acquisition of mineral assets abroad, recycling of end of life products, stockpiling, and domestic processing capacity.
4. The list it works from: The 30 minerals identified as critical for India in 2023, which include lithium, cobalt, nickel, graphite and the rare earth elements.

Matching Previous Year Question

“[2026] Which of the following statements about Rare Earth Elements (REEs) and Critical Minerals is/are correct? 1. Modern technological innovations including Artificial Intelligence, robotics and space exploration extensively utilise Rare Earth Elements (REEs). 2. China has the highest share in mining of REEs followed by India. 3. The Government of India launched the National Critical Mineral Mission (NCMM) in 2025 to establish a robust framework for self-reliance in the critical mineral sector. 4. Rare Earth Elements are a set of 13 metallic elements. Select the answer using the code given below: (a) 1 and 3 only (b) 3 only (c) 1, 3 and 4 (d) 1, 2 and 4 ANSWER: (a)”