According to a person with knowledge of the matter, talks about the India-Chile Free Trade Agreement (FTA) should address the acquisition of critical minerals, as well as the purchase of copper and lithium mines and commercial off-take agreements at the government-to-government (G2G) level.
Recently, a group of government and business representatives travelled to Chile to investigate the possibilities for further economic collaboration, which included establishing vital mineral alliances. A non-disclosure agreement was previously signed for data sharing and information exchange between the state-owned firm of Chile, ENAMI, and the Ministry of Mines of India.
Therefore, if exploratory efforts are successful, we are considering G2G partnerships for exploration, the purchase of mineral blocks, and the eventual off-take of these vital minerals. The mineral blocks that are being discussed in this instance are copper and lithium. These arrangements would follow the same pattern as our acquisition of lithium blocks in Argentina, the spokesman stated.
India purchased its first-ever overseas lithium blocks in Argentina earlier this year (in January). Through the state-run company KABIL, also known as Khanij Bidesh India Ltd., a joint venture between NALCO, Hindustan Copper, and MECL, five blocks were obtained. Over a five-year period, over ₹200 crore will be allocated to exploration and other mining operations in the area.
Earlier this year, in January, India bought its first-ever foreign lithium blocks in Argentina. Five blocks were acquired through the joint venture of NALCO, Hindustan Copper, and MECL, known as Khanij Bidesh India Ltd., a state-run corporation. More than ₹200 crore would be set aside for exploration and other mining activities in the region over a five-year period.
Lithium, sometimes referred to as “white gold,” is essential for use in batteries for automobiles and cell phones, EVs, and other energy storage devices. It is the main component of India’s switch to renewable energy. The nation is reliant on imports.
Conversely, copper, which is widely used in power cables, wind turbines, electric cars, and solar panels, is also recognised as a key mineral in India. Demand for copper, including changes in price, is seen to be a crucial sign of the state of the economy.
The official stated, “We have recommended to the Commerce Ministry that the FTA negotiations with Chile include discussions on essential minerals, particularly copper and lithium. Presently, rather than a free trade agreement (FTA), both nations have a preferential trade agreement (PTA), which is a limited trading arrangement.
Under the first 100-day plan, the Ministry’s priority list included holding the fourth round of important mineral auctions, which covered 20 blocks. By June’s end, the ministry intends to announce auctions.
Finalising the regulations and launching the auction for India’s first-ever offshore mining blocks are also planned. Around June or July, auctions for roughly ten blocks, including building sand and lime-mud, are anticipated.
This apart, the Ministry will also announce winners for the first tranche of critical mineral auctions. Some six mineral blocks mostly relating to fertiliser minerals – out of 20 announced blocks – got more than five bids and went into the second round.
India and Chile are currently engaged in discussions to elevate their existing Preferential Trade Agreement (PTA) to a Free Trade Agreement (FTA), with a significant focus on critical minerals such as lithium and copper. The Indian Ministry of Mines has proposed that these
FTA negotiations encompass strategies for securing critical minerals, including the acquisition of mining assets and the establishment of government-to-government commercial offtake agreements.
Chile, a key player in the global “Lithium Triangle,” holds substantial reserves of lithium and copper, minerals essential for India’s burgeoning electric vehicle industry and renewable energy initiatives. Recognizing this, India has expressed interest in collaborating with Chile to ensure a stable supply of these resources.
Recent high-level meetings have underscored this mutual interest. In a recent Joint Commission Meeting, Chilean Foreign Minister Alberto Van Klaveren highlighted Chile’s national lithium strategy and invited Indian companies to participate in tenders for new lithium deposits.
Additionally, during a meeting between the Prime Ministers of both countries, there was an agreement to enhance cooperation in the critical minerals sector for mutual benefit.
The progression towards an FTA that includes provisions for critical minerals signifies a strategic move to strengthen bilateral economic ties and secure essential resources for India’s energy transition.
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