A South American lithium, A fuel for Make in India Zero Emission Vehicles!

"Nearly 60-70 per cent cost of E-vehicle is its most common rechargeable battery (Lithium Battery), and India is fully depended on the importation of Lithium Batteries, either for cellphone, wristwatch, toys, and vehicles or any electronic, which runs on Lithium batteries".

 

 

By Sandeep Wasnik,

By 2030, the government of India aims to have 100 percent Zero Emission Vehicles (Electric Vehicle) on the roads. EV sales in FY 20 was nearly 246,000 units — Cars -3,400, Three-wheeler (E-Rickshaws) – 90,000, Two-wheelers – 152,000 and Buses – 600 Units. And these numbers are expected to grow by 30 per cent till end of the 2021.

| "60-70% Cost of EVs is only its Batteries. India imports $17.18 Million valued batteries in 2020 (Jan-Oct)" |

Nearly 60-70 per cent cost of E-vehicle is its most common rechargeable battery (Lithium Battery), and India is fully depended on the importation of Lithium Batteries, either for cellphone, wristwatch, toys, and vehicles or any electronic, which runs on Lithium batteries.

In 2020 (January-October), India imported nearly USD17.18 million valued Lithium batteries. Info-graph below shows per month importation of Lithium Batteries in India. However, the importation of Lithium Batteries dropped in March-20till July-20, but it is due to the global Pandemic lockdown.

 

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| "Manikaran Power Limited, will be the first Lithium refinery in India" |

In this pandemic, Self-reliant India campaign (Atmanirbhar Bharat Abhiyaan) is the vision of new India envisaged by the Hon'ble Prime Minister Shri Narendra Modi. Many Indian industries seeks for in house Lithium-ion Battery pack production. Last year, Manikaran Power Limited, one of the country’s largest power trading and renewable energy company will be investing over Rs 1,000 crore to set up this refinery, it will be India’s first Lithium refinery which will process Lithium ore to produce battery-grade material will be set up in Gujarat.

Lithium not only to use for manufacture of batteries but also used for manufacturing of special glass, Frits for ceramics and enamels, Cements and special adhesives, Powders for continuous casting, Industrial air conditioning, Aluminum and pharmaceuticals. India imports nearly $6.54 million valued Lithium Carbonate and $10.38 million valued Lithium Oxide and Hydroxide in 2020 (Jan-2020 to Oct 2020).

 

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An overview of South American Lithium

According, US Geological Survey (USGS), there are around 80 Million tons of Lithium reserves identified globally as of 2019. Nearly 66 per cent of the world's economic Lithium deposits are found in Lithium Tringle in South America. Geographically, the “Lithium Triangle” is located on the borders where Chile, Bolivia and Argentina meet. Bounded by the Salar de Atacama, Salar de Uyuni and Salar del HumbreMuerto, the Lithium Triangle also takes in the northern ends of Chile and Argentina. As a result, these three countries dominate world Lithium supplies thanks to the tectonic forces that shaped the South American continent.

| "80 Million Tons of Lithium reserves in globally, 66% is in Lithium Trangle" |

Chilean Lithium: The Salar de Atacama salt flat is a key resource for the nation. Since 1980, the world’s top Lithium-mining companies, SQM (Sociedad Química y Minera) and Albemarle have been mining Lithium in the Salar de Atacama. Chile’s largest salt flat, which holds nearly 9 million tons of the world’s reserves of the mineral. These two companies have rental contracts with the Corporación de Fomento de la Producción (CORFO is a Chilean governmental organization that was founded in 1939). In 2019, Chile was the second largest producer of Lithium 18000 tonnes after then Australia 42000 tonnes.

 

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Argentina Lithium: Since 1997, for a long time there was only one Lithium-producing project in the country. In recent years, Argentina has experienced increased interest in Lithium mining activities. Two Lithium producers Livent and Orocobre were operating in two large mines, Salar del Hombre Muerto in Catamarca Province and Salar Olaroz in Jujuy Province of Argentina and reserves are enough for at least 75 years. The country also has the most advanced Lithium brine project in the region, which is Lithium Americas andCaucharí-Olaroz venture, and planned to go into production in 2022 and expected to produce 40,000t/y of Lithium carbonate, which would more than double Argentina’s current Lithium output of 30,500t/y. In addition, other project is in design phase of Caucharí-Olaroz with Australia’s Galaxy Resources venture in Salar de Vida. In 2019, Argentina was the fourth largest producer of Lithium production of 6,400 tonnes after then China 7500 tonnes.

 

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Bolivia Lithium: The Bolivia is home to the world’s largest salt flat, the Salar de Uyuni, which contains an estimated 23 million tonnes of Lithium in brine deposits. There are two other Bolivian salt flats, the Coipasa in north and Pastos Grandes in south of Uyuni.

Until recently, Bolivia has struggled to get its Lithium out of the brines. The Uyuni’s brines contain high levels of magnesium, an impurity that’s difficult to separate from Lithium. Also, the region has relatively rainy climate this means that traditional methods for concentrating Lithium from brines is difficult, open air evaporation ponds don’t work as well as they do in the drier salt flats of Argentina and Chile, where Lithium is already being produced commercially.

The state-run company “Yacimientos del Litio Boliviano” (YBL) was created in 2017, under the Ministry of Energy of Bolivia by the Morales government with an aim to build an entire Lithium value chain from salts to batteries in Bolivia. In 2018, YLB created a joint venture with a German firm “ACI Systems”, which claimed to have new technology that could help Bolivia extract large quantities of Lithium.

Another step was taken in February 2019 — Yacimientos de Litio Bolivianos (YLB) and the Chinese company Xinjiang TBEA Group-Baocheng (YBL, 51per cent – TBEA, 49per cent) signed an agreement for the construction of the Lithium industrialization plants in the salt flats of Coipasa (Oruro) and Pastos Grandes (Potosí) that USD2,390 million in partnership for the both Salt flats. Peru Lithium: The recent discovery further north has fueled speculation that Peru too might join the Lithium party and turn the triangle into a quadrilateral. The recent discovery in the Peru Andean and Peruvian south were confirmed by 2.5 million tons of high-grade Lithium resources which is seven times higher than the deposits of Bolivia and Chile 2.5 and 124 million pounds of uranium resources at its Falchani deposit in southern Peru, but they have been found together with uranium and that marks the difference in terms of potency or the reserves of the neighbors. An opportunity for India in South America Lithium An overview of South American Lithium, shows the reserves, projects, organization, production and Lithium extraction issues. There is a lucrative opportunity for Indian Mining’s companies, Importers and for Indian industries to get the south American Lithium.

The Government of India formed; KABIL’ consortium comprising of three state-owned companies- National Aluminum Company (NALCO), Hindustan Copper (HCL) and Mineral Exploration Corp Ltd. (MECL), to acquire the most strategic mineral globally. Lithium active mineral is not only required for electric vehicles but is also used in space launchers solar panels, mobile phones and laptops and hi-tech military platforms.

Chile is the second largest Lithium producer in the world, there are currently 17 Lithium Projects in Chile where India or Indian Companies can invest and can enter in it by Bidding System, which is organized by CORFO.

On the other hand, Miners in Argentina already have created an association, named Calbafina that aims to boost the development of new projects and enable a transparent setting of prices and to create a Lithium carbonate index to track and publish the price of the battery metal on international markets. Calbafina also intends to help companies obtain financing and close deals with governments and local institutions leading to improved Lithium exploration, production and sales. Being the world’s third largest Lithium producer, the Argentine government has included 15 Lithium brine projects in its plan to boost mining exports over the next decade.

| "Miners in Argentina created an association Calbafina" |

Last year, India signed a Memorandum of Understanding (MoU) with Argentina to establish a supply link and technological development in the field of Lithium. MoU includes joint exploration, production and commercialization of mineral products. The MoU was signed between Jujuy Energía y Minería Sociedad del Estado (JEMSE), an Argentine state-owned enterprise, and the Indian joint venture company Khanij Bidesh India Ltd. (KABIL).

Bolivia is looking for the technology to extract the Lithium from its high levels of magnesium contained brines. Indian research institutes and other organization have good opportunity to work and participate in Lithium extraction technology, also can seek joint venture with YBL for extraction of Lithium active materials. Although in March 2019, both countries have signed a Memorandum of Understanding (MoU) for the development and industrial use of Lithium for the production of Lithium-ion batteries. As part of the MoU, Bolivia will support supplies of Lithium and Lithium carbonate to India, as well as joint ventures between the two countries for Lithium battery production plants in India.

| "Bolivia is looking for Lithium extraction technology" |

Peru has a long history of encouraging and supporting foreign private investment in general and in the mining sector in particular, which is and has always been paramount to the economic stability and ongoing development of the country. Canada’s Plateau Energy Metals is seeking nearly USD600 million to develop Peru’s sole Lithium project. Although, European mutual funds had shown interest in investing around USD587 million needed to help develop the Falchani deposit in the Puno region near the border with Bolivia. Plateau Energy Metals would look to raise additional funds beyond this.

👉 Click to read article on The Financial Express 

El Salvador: A market on the rise for Indian companies

 Trade between India and El Salvador grew substantially in the last decade, reaching US$1,051 million during that period. This growth, together with the need to diversify the supply chains that has arisen as a result of COVID 19, opens up countless business opportunities for Indian companies, especially SMEs, in sectors such as the pharmaceutical, textile and plastic industries, automobile and spare parts, renewable energy and services (especially IT and industry 4.0).

Ariel Andrade and Sandeep Wasnik

Friendship between India and El Salvador begun some centuries ago, in the form of commercial exchange when El Salvador was still under the colonial rule of Spain, as part of the Captaincy General of Guatemala, and European merchant companies were taking Indian products all over the world. Though, the official diplomatic relation initiated just 41 years ago (February 12, 1979).

Still more, theorists like Dr. B. G. Sidharth (B.M. Birla Science Centre) notice possible contacts between the Indus Valley and Mayan civilizations during ancient times. The remarkable similarity in various astronomical, artistic and cultural references of both regions lies as a basis of their argument.

These include the connection between Arjuna and the Naga tribes recorded in the epic Mahabharata. According to Dr. Sidharth, the Naga would be associated with the Mayas, a civilization that settled in the present-day southern Mexico, Guatemala, Honduras, and El Salvador, circa 2,000 B.C.

While not assessing this reasoning, the enigma of an ancient relationship unknown to the vast majority, serve as a right metaphor for the current relations between India and El Salvador, two countries in nearly diametrically opposed locations, but which are getting closer commercially fast.

That closeness becomes more important as the world adjusts to the new normal post-COVID 19, where international markets and supply chains are quickly reorganizing. For this reason, it is crucial to identify areas where the greatest benefits can be obtained for companies of both countries. 

 

An overview of economy and foreign trade of El Salvador 

In 2019, El Salvador GDP was US $27 billion with a per capita GDP of USD 3,572. Foreign trade is highly dynamic: Goods export recorded US $5,943 million as well Services were US $3,197 million. On the other hand, the import of goods reached US $12,017 million as Services were US $2,005 million.

The following chart shows merchandise trade growing rapidly in the last ten years, especially Imports.

 

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The total went from US $12,915 million in 2010 to US $17,960 million in 2019, growing by an annual average of 5.1%. Within this, the growth of imports at an average annual rate of 5.3% stands out, while exports have grown slightly less, at an annual rate of 4.6%.

It also highlights the growth of Services that has shown great dynamism in the last 10 years, with total revenues of USD 23,000 million, mainly in tourism (sun and beach, adventure, medical, and business), maintenance and repair (aircraft), contact and call centers, and creative industries (graphic design, software, video games, translation and post-production for film and television).

 

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In addition, the impact of remittances should be highlighted, mainly from the United States, where the largest Salvadoran community abroad resides. In 2019 it was up to US$ 5,649 million. Remittances have grown at an average annual rate of 7.5% to a total US $77.5 billion in the period 1995-2019.

 

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India – El Salvador bilateral trade relationship 

According to El Salvador official statistics, in 2019 US$134.4 million were imported from India, while US$2.5 million were exported, for a total goods trade of US$136.9 million.

The total imported from India ranks El Salvador at the 119th position of the 220 market destinations of India. Not bad for a country 156 times smaller than India. Furthermore, in Latin America and the Caribbean, El Salvador was ranked 15 out of the 40 countries to which India exports.

In the last 10 years, trade of goods between the two countries has recorded US $1,051 million, with a favorable balance for India of more than US $955 million. Bilateral trade grew at an average annual rate of 14.9% during 2010-2019.

 

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Among the main products imported from India in 2010-2019 are synthetic dyes (11.4%), medicines (10.9%), motorcycles (7.1%), knitted fabrics (6%) and automobiles (4.8%). Exports to India have been concentered in four products: tropical wood (63.2%), iron waste (15.5%), aluminum waste (7.3%) and paper waste (2.9%).

Undoubtedly, India has positioned itself as an important economic partner for El Salvador. It took the 17th place in 2019 as a supplier of goods (out of 124). In contrast, it is located in position 38 as an export destination (out of 120).

All the above confirm that there is an already strong and growing bilateral trade relationship, but the good news is that in El Salvador's foreign trade, there is still plenty of room for India to expand, especially in ​​imports. 

 

Potential trade between India and El Salvador 

Traditionally, El Salvador tended towards the concentration of markets, especially the adjacent ones (Central American countries), North America (Mexico and the United States), Europe (Germany, Italy, and Spain) and some countries in Asia (Japan, Taiwan). However, a trend towards diversification (e.g. China and India) has been observed since the 1990s, which in the new post-COVID 19 context will definitely deepen.

The following chart shows the evolution of El Salvador's five main partners in terms of merchandise imports plus India. Three of these partners (United States, China and Mexico) are extra-regional and two of them (United States and Mexico) have free trade agreements with El Salvador.

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In the last decade, the total growth of imports from India (239.4%) greatly exceeded that of imports from the first five partners in El Salvador: The United States (31.7%), China (97.6%), Guatemala (73.2%), Mexico (22%) and Honduras (133.2%).

The growth potential for imports from India is high, as can be seen in the following table. This shows the 10 largest import items of El Salvador in 2019, the corresponding imports from India and the total exports of India in these items.

 

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Business opportunities for Indian companies are evident in six of these tariff lines. A relevant case is that of Medicines (HS 300490), where there is already an import volume of USD 8.34 million, but which only represents 2.8% of total imports in the category. A deeper analysis reflects more opportunities, especially for small and medium businesses.

Two other areas with great potential are renewable energy, especially in residential generation of solar energy, storage and efficiency; and the supply of raw materials for light industries such as plastics, textiles and pharmaceuticals, which are flagship industries for Salvadoran exports, mainly to Central America countries and the United States.

Likewise, there are great opportunities as a result of the new normal after COVID 19, especially in areas such as medical supplies and devices, and in transportation (particularly motorcycles and their spare parts and accessories, whose local consumption has soared).

Vertical integration in TICs, call and contact centers, creative industries in video games and movies, specialized medical services and medical tourism, and industry 4.0 stand out with greater relevance.

 

A new bridge for the 21st century

The dawn of the 21st century was promising a new era for the world, that finally left the cold war behind and delved into globalization and the technological revolution, however, many subsequent events disturbed that desire: terrorism, climate change, economic crisis, pandemics, etc.

Despite this, one of the best news in the first 20 years of the century is the resurgence of India as one of the main economies in the world, destined to regain the position it held before colonialism that for centuries submerged our peoples in misfortune.

In the words of Prime Minister Modi: "the sleeping elephant has woken up and has joined the race" and in the next three or four decades, it will become the world's leading economy, which not only brings increasing responsibilities on the global stage but great opportunities for benefit.

However, these opportunities only make sense when they are seized at the right time by those who are called to do so, that in the case of the relationship between India and El Salvador are the SMEs, at this precise moment.

We believe that it is the time to build new collaboration bridges, both to supply local markets with more competitive products and services, and to supply better inputs and raw materials that allows local industries to better export to third markets.

In El Salvador, interest and appetite for Indian products and services will continue to grow due to the interest in diversifying supply chains and the incessant search for higher quality products at more competitive prices, emblematic characteristics of Indian products.

Since the 90s, El Salvador has promoted the opening of markets through free trade agreements and partial agreements with a large number of countries and regions such as Central America, the United States, the European Union, Korea, Mexico and Colombia, among others, enabling preferential access to a market of more than 1,200 million people.

This strategy seeks to convert the country into a platform for the transformation and re-export of goods and services to this large network of markets, for which it has also adopted other measures such as the use of the US dollar as legal tender, the establishment of numerous free-trade zones, the development of the country's airport and seaport infrastructure and the renewal of its legal framework.

In analogy to the mythical contact between the Mayan and Indus Valley civilizations, the need of the hour are new Arjunas in the form of brave companies willing to take the risk of crossing half the planet to take advantage of the wide range of opportunities indicated.

👉 Click to read article on The Financial Express

El Caracazo "The Wave of Protests"

It was Monday, February 27, 1989.

Venezuela was hit by protest and rioting wave of the disturbances that have spread across the countries. Security forces killed more than 300 Venezuelans and many of them innocent bystanders. the protesters and looters were on the street of Caracas (Capital of Venezuela).

Many of Venezuelans residents of the poorest neighborhoods that surround the capital are venting their anger at a raft of new government economic measures.

But, What was the Reason for Protest and Riot?

Carlos Andrés Pérez Rodríguez (Click for Large View)

It happens when Carlos Andrés Pérez Rodríguez once again become President of Venezuela on 2nd of February 1989 (term till 21 May 1993).

Previously, he was the president of Venezuela from 12 March 1974 to 12 March 1979. Carlos Andrés Pérez Rodríguez also known as CAP and often referred to as El Gocho.

On Monday, February 27, 1989 and over the weekend Carlos Andrés Pérez liberalization of petroleum prices had kicked in, the first stage of which was an immediate 100% increase in the price of consumer gasoline. While the government had attempted to force small transporters to absorb the majority of the increase, convincing the National Transport Federation to pass on only 30% of the increase to passengers, many smaller federations and individuals refused to respect this agreement. Since their gas costs had doubled overnight, one can hardly blame them.

Then the Protests kicked off during the early commute of informal workers into Caracas. Upon discovering that prices had doubled, many refused to pay. Resistance, rioting, and the burning of buses was reported from a number of suburbs and in cities across the country in early morning. Demonstrations in the eastern suburb of Guarenas (where looting was reported as early as 7:30 O'clock morning), sparked off broader resistance in the region. By 6 O'clock in morning, students had occupied Nuevo Circo station in Caracas, at the other end of the Guarenas-Caracas line, and were publicly denouncing the drivers.

The armed forces massacred thousands of people on February 27th 1989 (Archives United Socialist Party of Venezuela) - (Click for enlarge view)

Joined by informal workers, the crowd at Nuevo Circo moved to north onto Avenida Bolívar, building barricades to block traffic on this major artery. By noon, blockades had spread eastward to Plaza Venezuela and the Central University, southward to the Francisco Fajardo highway, and westward to Avenida Fuerzas Armadas. Revolutionary ferment united students, informal workers, and hardened revolutionaries, and the initial anger at increased transport prices (an anger directed predominantly at individual drivers) was successfully generalized to encompass the entire neoliberal economic package (thereby directing anger directly at the president).

The structure of the informal economy provided more than the constituents of the rebellion: it provided the means of coordination and communication as well, with motorcycle taxis zipping back and forth across the city, drawing the spontaneous rebellion into a broader coordinated picture which more closely resembles what we would consider a revolutionary situation.

The Venezuelan government deployed military personnel to the streets to repress the popular rebellion that began on February 27th, 1989

Meanwhile, a similar pattern was appearing spontaneously in every major Venezuelan city: protests emerged early in the morning in San Cristóbal, Barquisimeto, Maracay, Barcelona, and Puerto la Cruz, and Mérida, and later in the afternoon in other major cities like Maracaibo and Valencia. Some have argued, and rightly so, that the common moniker "Caracazo" is misleading, concealing as it does the generalized and national nature of the rebellion.

Deaths were reported in Caracas as early as the afternoon of the 27th, as police opened fire on students near Central Park. As night fell, sacking and looting became widespread (often aided by the police), touching even the generally untouchable sectors of wealthy eastern Caracas, and more than 1,000 stores were burned in Caracas alone. While many were looting necessities (most video evidence shows people hauling away household products and food, especially large sides of beef) luxuries were not exempt, and as a result many barrios enjoyed a taste of the life so habitually denied, celebrating with fine food and imported whiskey and champagne.

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The morning of February 28th saw a mixed picture: in some areas, the police fired indiscriminately with automatic weapons, while in others like the Antimano district of southwestern Caracas, police agreed to permit controlled looting. The government's first attempt to control the rebellion was a spectacular failure: the minister of the interior appeared on live television calling for calm, only to faint on live television thereby forcing the suspension of the broadcast.

At 6 O'clock evening, Pérez appeared on television himself, to announce the fateful decision to suspend constitutional guarantees and establish a state of siege. The simultaneous claim that the country was experiencing a situation of "complete normality" was hardly credible given the decision. This marked both a green light for government repression and the beginning of the end for the rebellion. A curfew was imposed, and those violating it were treated harshly.

Dead Bodies Carried in coffin on truck

Repression was worst in Caracas' largest barrios: Catia in the west and Petare in the east. Police directed their attention to the former, and especially the neighborhood of 23 de Enero, as the organizational brain of the rebellion. Known organizers were dragged from their homes and either executed or "disappeared," and when security forces met resistance from snipers, they opened fire on the apartment blocks themselves (the bulletholes are visible to this day). In Petare, the largest and most violent of Caracas' slums, up to twenty were killed in a single incident, when on March 1st the army opened fire on the Mesuca stairway.

Much of the country was "pacified" within three days, while Caracas saw rioting for more than five days. The human toll of the rebellion has never been entirely clear, especially since the Pérez government obstructed any and all efforts to investigate the events. Subsequent government investigations set the number killed around 300, while the popular imaginary places it around 3,000. Rumors of mass killings led to the 1990 excavation of a mass grave in a sector of the public cemetery called, perhaps not coincidentally, "The New Plague." There, 68 bodies in plastic bags were unearthed, and no one knows how many more deaths were concealed by government forces.

Article by Sandeep Wasnik | Latin America & the Caribbean Countries Expert

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