New Delhi: Chile and Argentina are open to deeper cooperation with Indian firms for the exploration and extraction of critical minerals such as lithium, their ambassadors to India Juan Angulo and Mariano Caucino said Thursday.
“We have developed a national policy for lithium. We have opened the system for the extraction of lithium. We have a high concentration of lithium and it is easy to extract…However, we have some concerns. Firstly, it needs to be done in a sustainable way. The second concern is with the local people living there. They need to be a part of the process,” Angulo, Chile’s Ambassador to India, said.
“Lithium is part of the discussion we are having with India in the strategic minerals dialogue…We have opened our bids for [investment in lithium mining] everybody. There are Indian companies interested. There are many countries interested and India is looking to participate in the bids to extract lithium.”
Angulo and Caucino were speaking at the Diplomat Diaries organised by the Observer Research Foundation (ORF) at the B.R. Ambedkar International Centre here. The session was moderated by Harsh V. Pant, vice-president strategic studies at ORF.
Chile has roughly 14 million tonnes of lithium resources, according to recent reports, making it the third largest country globally in terms of resources. However, it has the world’s largest lithium reserves at roughly 9.3 million tonnes.
Resources indicate the size of mineral deposits available in a geographic area. However, it cannot be economically extracted at that given point in time. Reserves refers to the developed mining sites from where the raw materials can be economically extracted.
Chile is the second largest lithium producer in the world currently. The Chilean state-owned mining company Empresa Nacional de Minería (ENAMI) has been receiving bids from Chinese car maker BYD and other international firms for providing financing for its lithium production projects.
India has been looking to build international partnerships to diversify its supply chains for critical minerals. Currently, China remains the largest refiner of a number of critical minerals and rare earth elements. Beijing has been willing to weaponise its large output of critical minerals and rare earth minerals in its ongoing trade war with the US.
In an attempt to impose export restrictions on magnets for example, with the aim of hurting the US’ supply chains, Indian manufacturers have been impacted. However, China has recently given licences to at least four Indian companies to export these goods.
“Both leaders agreed to accelerate collaboration in exploration, mining and processing along with research and development to promote investment across the entire critical mineral value chain for mutual benefit,” the joint statement of Prime Minister Narendra Modi and Chilean President Gabriel Boric Font released in April said.
Font was in India for a state visit during which New Delhi and Santiago agreed to the terms of reference for a Comprehensive Economic Partnership Agreement (CEPA). Trade negotiators for the CEPA met at the end of October for their third round of negotiations.
Angulo highlighted that the aim is to complete the negotiations either by the end of this year or by early next year. The agreement has around 25 chapters covering a number of areas including the standard ones such as intellectual property.
“No commercial agreement we have signed will be a winner for Chile…This agreement is not only about goods but it also has rules for sanitation, for services, for the expansion of sectors such as IT services. The CEPA also has chapters on mobility of people. We [Chile] do not see this FTA (Free Trade Agreement) as only related to goods,” said Angulo.
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Consensus in Mercosur
The Argentinian ambassador Mariano Caucino highlighted during the discussion that there exists a consensus at this moment within Mercosur–the Southern Common Market–to expand the preferential trading agreement (PTA) with India. Mercosur has five members including Brazil, Argentina, Bolivia, Paraguay and Uruguay.
“I think now they [Mercosur] are working on this [expanding the PTA]. I think we are able to work together [on this issue]. In the case of India, the four founding members are agreeing that trade has to be deepened. It is one of the issues that we [Mercosur members] can work on together,” said Caucino.
Buenos Aires has the second largest resources of lithium in the world. Last year, India’s state-owned exploration firm Khanij Bidesh India Limited (KABIL) announced an investment of $24 million to explore five blocks in Argentina.
“Indian companies are working in the north of Argentina. I think that’s very positive…However, I must warn that we should not only trust in natural resources,” Caucino said, pointing out that the basis of ties needs to be more than a transactional one.
“There is a sort of paradox [for countries in Latin America]. Politically we belong to the Western Hemisphere but economically more and more we rely on Asia. We share the same values with the US. But our economies are competitive, not complimentary,” the Argentinian ambassador added.
(Edited by Tony Rai)
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