Four sources have confirmed that four Indian state-owned firms are in talks with Chilean mining company SQM to acquire a 20% stake in two of its lithium projects in Australia. The deal, valued at $600 million, marks New Delhi’s most significant effort yet to secure a stable supply of lithium, a critical metal for electric vehicle (EV) batteries.
According to the sources, Khanij Bidesh India Ltd (KABIL), a government-backed company, has partnered with Coal India Ltd, Oil India Ltd, and ONGC Videsh to pursue the stake in SQM’s Mount Holland Lithium Project and Andover Lithium Project in Western Australia.
The sources, who requested anonymity as the discussions remain private, said that due diligence has begun and that the companies have already expressed interest in making an initial offer.
SQM is one of the world’s leading lithium producers.
India, the world’s fastest-growing major economy, has intensified its efforts to secure lithium resources in anticipation of rising demand for EV batteries, which are crucial for reducing carbon emissions.
“This is India’s largest attempt so far to secure lithium supply overseas,” one source said.
The sources also noted that KABIL and the three state-owned companies are in the process of appointing a mergers and acquisitions advisor for the deal.
SQM, KABIL, Coal India, Oil India, and ONGC Videsh have not responded to requests for comment.
India’s plans to acquire stakes in SQM’s Australian projects had not been previously reported.
New Delhi established KABIL—a joint venture involving National Aluminium Company (NALCO), Hindustan Copper, and Mineral Exploration and Consultancy Limited—to acquire, process, and develop strategic minerals abroad for India.
In recent years, India has ramped up efforts to secure agreements with resource-rich countries such as Argentina, Australia, and Chile for access to critical minerals. It is also exploring an initial agreement with the cobalt-rich Democratic Republic of the Congo.
Last year, KABIL signed a five-block exploration and mining agreement with an Argentine state-owned company.
As part of its strategy to reduce reliance on fossil fuels, India is promoting EV adoption to meet its growing energy needs.
In 2024, EVs accounted for only 2.5% of the 4.3 million vehicles sold in India. However, their 20% growth rate outpaced the 5% overall growth in the car market. Analysts predict EV sales could more than double from 100,000 units in 2023 to 250,000 units in 2025, driven largely by new model launches.