Jammu and Kashmir, often celebrated as a paradise on Earth, is not just a land of breathtaking landscapes but also a treasure trove of natural resources. From the sapphire mines of Paddar to the coal deposits of Kalakote, the limestone quarries of Rajouri and Poonch, and the plaster of Paris (POP) reserves in Ramban, the region has long been a hub of mineral wealth, setting it apart from other Indian states. On February 9, 2023, the Geological Survey of India (GSI) added a new chapter to this legacy, announcing the discovery of 5.9 million tonnes of inferred lithium reserves in the Salal-Haimana area of Reasi district—the first such find in India. This discovery, valued at approximately $410 billion, positions India as the seventh-largest holder of lithium reserves globally, sparking both hope and concern for the region’s future.
Lithium, often dubbed “white gold” for its critical role in modern technology, is a soft, silvery-white metal essential for lithium-ion batteries that power smartphones, laptops, solar panels, and electric vehicles (EVs). The Reasi deposit, with a high-grade concentration of 500 parts per million (ppm)—well above the 100-200 ppm threshold for commercial viability—offers a tantalizing opportunity for India, which currently imports 70-80% of its lithium and lithium-ion cells, primarily from China. With global lithium demand projected to rise by nearly 500% by 2050, according to a World Bank study, this find could reduce India’s import bill—estimated at $3.3 billion between FY17 and FY20—and bolster its ambitious EV goals: 30% penetration in private cars, 70% for commercial vehicles, and 80% for two- and three-wheelers by 2030.
However, the path to harnessing this resource is fraught with challenges. The Reasi lithium is classified as a G3 “inferred” resource under the United Nations Framework Classification for Reserves/Resources (UNFC-1997), indicating a low level of confidence in its quantity, grade, and economic viability. The deposits are primarily clay-based, mixed with other minerals, unlike the more commercially viable brine or hard-rock deposits found globally. Experts estimate that transitioning from inferred to proven reserves, and eventually to extraction, could take 6 to 10 years, requiring further exploration to reach G2 or G1 stages. Two auction attempts in 2023 and 2024 failed due to insufficient bidders, with the Ministry of Mines cancelling the latest in July 2024, citing the need for more detailed studies to attract investment.
The economic potential of the Reasi lithium reserves is undeniable, particularly for a region grappling with high unemployment and economic stagnation. Jammu and Kashmir’s unemployment rate stands at 18.3%, nearly double India’s national average of 9.2%, with an estimated 600,000 people out of work in a population of 12.5 million, according to a 2011 census cited by Eco-Business in 2024. The development of a lithium mining industry could create thousands of direct and indirect jobs, from mining and processing to downstream industries like battery manufacturing and recycling. Local residents, like Rajinder Singh from Reasi, are optimistic, recalling how geologists drilled in the area for two years before leaving in late 2022. “We are sure the projects to extract lithium will provide jobs to the people,” Singh told reporters in 2023, echoing a sentiment shared by many in the district.
Beyond direct employment, the lithium industry could attract significant investment, revitalizing infrastructure and boosting ancillary sectors like transportation and logistics. The development of battery manufacturing units in the region could position Jammu and Kashmir as a hub for India’s green energy transition, aligning with the government’s Production Linked Incentive (PLI) Scheme for Advanced Chemistry Cell (ACC) battery manufacturing, which aims to establish a 50 Giga Watt hour (GWh) capacity. Partnerships, such as the India-Australia Critical Minerals Investment Partnership, could facilitate technology transfers for hard-rock lithium processing, further enhancing economic growth. If managed sustainably, the Reasi reserves could mirror the success of countries like Norway, which used its oil wealth to invest in education, infrastructure, and quality of life, or Botswana, which diversified its economy to avoid the pitfalls of resource dependency.
Yet, the promise of prosperity comes with significant risks, both environmental and economic. Lithium mining is notoriously resource-intensive, requiring an estimated 2.2 million liters of water to produce one ton of lithium. In Reasi, a seismically active region classified under Zone V, the environmental stakes are high. The Chenab River, rural settlements, and local biodiversity are at risk of contamination and depletion, while open-pit mining could lead to habitat destruction, air pollution, and land subsidence—issues already witnessed in places like Joshimath. Kashmiri environmentalists, including groups like Climate Front Jammu, have voiced concerns, organizing protests in 2023 to highlight the potential ecological fallout in the fragile Himalayan ecosystem.
Economically, the Reasi lithium reserves could expose Jammu and Kashmir to the “resource curse,” often termed the Dutch Disease. The Netherlands, after discovering large gas reserves in 1959, saw its currency appreciate due to foreign investment, which hurt other export sectors and led to a spike in unemployment from 1% to 5.1% within a decade. A similar fate could befall Jammu and Kashmir if the lithium boom draws labor away from agriculture and other industries, stunting long-term development. The region’s geopolitical volatility—proximity to the Line of Control, India-Pakistan disputes over the Chenab River, and political uncertainty following the abrogation of Article 370 in 2019—further complicates the scenario, potentially deterring investors and exacerbating local tensions.
The experiences of other resource-rich nations offer cautionary tales. In the Democratic Republic of Congo, which produces 74% of the world’s cobalt (another key battery component), corruption, warlord-controlled mining, and child labor have devastated the economy and environment, leaving the country at the bottom of global development indices. Bolivia, despite holding the world’s largest lithium reserves at 21 million tonnes, has struggled to capitalize on its resources due to overregulation and a lack of infrastructure, missing the EV battery boom. Conversely, the Gulf countries, with no competing industries, escaped the Dutch Disease by leveraging oil wealth to build economies from scratch, while Dubai diversified into tourism, with only 30% of the UAE’s GDP now reliant on oil.
For Jammu and Kashmir, the Reasi lithium reserves present a dual-edged sword. If managed with transparency, environmental safeguards, and a focus on diversification, they could transform the region into an economic powerhouse, generating sustainable employment and reducing India’s reliance on foreign lithium. However, without careful planning, the treasure trove risks becoming a curse, marked by ecological ruin, economic imbalance, and social unrest. The government must prioritize rigorous environmental assessments, engage local communities, and invest in education and infrastructure to ensure that Reasi’s lithium wealth benefits its people, not just its politicians. As the world watches India’s green energy ambitions, the true test lies in balancing progress with preservation in this paradise of potential.
(The author is a regular columnist and freelance writer)
