Coal India's next big bet is digging lithium in Chile

Coal India, the world's largest coal miner, is exploring the acquisition of a Chilean lithium mining unit owned by Canada's Wealth Minerals, according to two sources familiar with the matter. This move could mark a significant step for India in securing overseas lithium resources, crucial for electric vehicle batteries and energy storage systems.

India has had limited success in acquiring critical mineral assets abroad, having secured only one such agreement thus far - a five-block lithium exploration and mining arrangement in Argentina in 2024. The potential acquisition of Wealth Minerals' Chilean subsidiary would represent a major expansion of India's overseas mineral investments.

As part of the process, both Coal India and Wealth Minerals' Chilean subsidiary, Kuska Minerals, have jointly applied for a lithium extraction license from the Chilean government. After obtaining the license, the companies plan to decide whether to proceed with an acquisition or form a joint venture, though the structure and details of any such arrangement remain to be determined.

Coal India could also explore a joint venture with Wealth Minerals, although the specific terms of any such collaboration have not been finalized. The potential acquisition or joint venture is currently in the licensing stage, with the process being delayed due to a change of government in Chile.

Chile is home to the world's third-largest lithium reserves, estimated at 13 million metric tons, according to the U.S. Geological Survey. This makes the potential acquisition highly attractive for India, which has been actively seeking to diversify its critical mineral supply chains and reduce reliance on China-dominated sources.

The Indian government has been encouraging state-owned companies to acquire overseas mineral assets, signing critical minerals cooperation agreements with Argentina, Australia, Japan, and discussing broader arrangements with Peru and Chile. This year, India also signed agreements with Germany, Brazil, and Canada aimed at improving access to technology, expertise, and mineral partnerships.