G L Khajuria
Jammu and Kashmir besides being a paradise on mother earth is as well bestowed with world renowned natural resources.
There is unambiguously endless list of such resources so far known and what more is in store, the future shall tell. Sapphire mines of Paddar, coal mines of Kalakote, limestone mines of Rajouri and Poonch, POP of lime, (though min) of Ramban are in conglomeration our state’s mineral wealth.
This gives a unique identity of Jammu and Kashmir when compared with other states of India. And now of the latest on 9th February, an addition of 5.9 million tons of lithium reserves found for the first time in Reasi district of our country. As per GSI (Geological Survey India), Lithium is scarcely available in a few countries.
It is reactive with other metals and is found in crystalline form, not in metal form. To extract lithium is cumbersome water extensive project, Chile leads the world reserves with 9.2million tons followed by Australia with 5.7 million tons. 5.9 million tons of lithium at Reasi is a lot by any standard. Lithium has some unique qualities like highest metal with low density.
Smart-phones, Solar panels, irrespective of brand, phone has either a lithium-ion battery or lithium-polymer battery. In addition, electric vehicle that is manufactured today by any company has lithium battery.
In comparison to other types of batteries, such as lead-acid batteries, life span of lithium batteries is comparatively 10 times longer as well as the weight of the lithium batteries is concerned 50 per cent-60 per cent lighter with much higher efficiency.
As people move away from petrol and diesel vehicles, towards electric vehicles, as solar and wind energy is used more, replacing coal power plants.
Lithium reserves discovered in J&K, Reasi have been categorized as Inferred resources, it is not sure in respect of quantity and quality of lithium reserves as to whether it will be economically possible to mine it and impending the environmental impact.
The ESI (Economical Survey Of India) has put it into G3 category. It needs more research and studies to take it up to the G2 or G1 categories.
Then only ministry of mines would be able to know exact tonnage of lithium present.
How much of it could be extracted and to reach that stage at least 5-7 years would be required. In 2021 Karnataka, when the government announced that they found 1600 tons of lithium that was in the inferred state too but this time in J&K’s Reasi quantity of lithium is huge and it is significantly important.
But if we go by quantity Bolivia has highest lithium reserves with 21 million tons with inferred state so at this point in time, it is difficult to say lithium we have found would be minable.
On the other hand, china stands one of producer of lithium-ion batteries and at least 75 per cent of world wide.
As per International energy agency china controls 58 per cent of the lithium processing globally followed by Chile and Argentina with 29 per cent and 10 per cent respectively.
Interestingly enough, China has not discovered many lithium reserves but as far as processing is concerned China is global leader. It is quite obvious that there is a huge environmental cost of lithium mining, similarly in respect of mining for other resources, it produces water, soil and air pollution, lots of water is wasted under this process. According to the estimate, to produce 1 ton of lithium 2.2 million liters of water is required.
India it can create the chances of incidents like Joshimath irrespective of air and soil pollution. It is correct that lithium is being used in manufacturing electric vehicles, batteries which reduces carbon emissions.
But the fact goes that same amount of carbon emission is produced at once during mining as it needs to be balanced. In countries likes Bolivia, people have been protesting the adverse environmental impact.
Lets consider, if the 5.9 million tons of inferred reserves become proven pure reserves and it will be profitable to mine them for us by considering the environmental impact on the state of Jammu and Kashmir as well as for the country.
Provocatively, if we go by this analogy, the situation would be similar to that of the Gulf countries which hit bonanza when they found oil reserves.
There are positive examples, Apart from Gulf countries where oil was discovered in Norway, Australia and the countries like Botswana and Rwanda, which developed a lot, but at the same time, where as there are opposite examples too. Countries for them their natural resources become the evil eye. Such as Congo, Bolivia and Netherlands.
The Case of Netherland is famous for its name Dutch Disease.
It can be known as the resource curse. A disease that is seen in countries that have an abundance of natural resources. It might seen that country should become rich due to the natural resources, but unfortunately it doesn’t happen, In 1977, the economist magazine coined the phrase ‘The Dutch Disease’.
Actually, in 1959, large gas reserves were discovered in the Netherlands. They began exporting natural gas, it helped the country’s economy. But after 10 years later, the unemployment rate increased up to 5.1 per cent which was earlier 1 per cent. The private sector investment decreased.
This can be seen in two ways. First, when the amount of natural resources in the country is more and natural resources are imported to other countries, it tantamount to inflow of foreign investment.
If the exporting country of natural resources are highly attractive to foreign entities to invest, this leads to an appreciation of the currency’s value. Strengthening of currency can be considered a good thing, if the value of our country’s currency increases, then people who are exporting other products will suffer.
Another effect of Dutch disease would be on the labor market. When a country discovers oil or lithium, they will need labor for mining activities, thus creating jobs in that area. People from other sectors will shift to this sector have a detrimental effect on other areas. It will also affect the long term development of the country.
If we look at the example of Gulf countries. They easily escaped the Dutch disease.
Because there were no other fields. Indeed, the Gulf countries would have no economy if oil reserves had not been discovered.
The value of their currency was able to appreciate independently without any effect on other regions.
Because these countries were not exporting anything else. Another example is of developed countries like Australia and Norway.
There are abundant resources to be found there. These countries skillfully diversified among other regions to avoid Dutch disease.
Talking about Norway in particular, this country was lucky because their government spent on the education of its citizens. Spent on building good infrastructure, providing citizens with a high quality of life, they did this before the discovery of oil.
Dubai has become a tourism hub, 95 per cent of Dubai’s GDP is not oil based, rather it is non-oil. Only 30 per cent of the UAE’s GDP depends on oil and gas. If you look at developing countries, one of the positive examples is Botswana in Africa, which has successfully avoided the Dutch disease.
But negative examples would be countries like Congo and Zimbabwe where natural resources have proved anathema due to corruption and mismanagement. Cobalt is another important metal used in the manufacture of lithium-ion batteries. 74 per cent of the global cobalt supply is produced in Congo. With such a large amount of valuable resources in a country, the Congo could have become extremely prosperous.
But today Congo is at the bottom of almost all lists. Until 2015, many mines in the Congo were controlled by warlords. They used to run the mining mafia. Even today mining is done by children. Child labor is rampant throughout the country.
Mining destroyed the country’s environment. And the economy didn’t benefit at all. Overall, the lesson here is pretty clear. Even if we find a treasure of natural resources, we should not depend on that treasure. We need to use the resource to help the citizens and to diversify the country’s economy.
The government should be wary of things like corruption and mismanagement, because if there is corruption with natural resources. This will prove harmful for the country.
(The author is former Deputy Conservator of Forests).
