Lithium, fresh silver lining on economic horizon of Pakistan
Yasir Masood is an Islamabad-based Political Economist, a broadcast Journalist and an academic. His areas of interest include BRI, CPE, Chinese Affairs and Regional Geopolitics.
Lithium is a versatile metal with numerous applications in a variety of industries, including the automotive and energy sectors. Although it is abundant in the earth's crust, it is not found in its pure form. Lithium can be extracted from various minerals, including spodumene, petalite, and lepidolite, as well as brine pools. There are various advantages to employing lithium-ion batteries (LIBs) for energy storage, including their high energy density, which makes them ideal for applications such as electric vehicles (EVs) where weight is a consideration.
Pakistan is one of the world's richest countries in terms of natural resources, including trillion worth of untapped mineral reservoirs. However, due to years of political instability and weak institutions, the country has been unable to develop its mining sector, relying instead on imported oil and gas to meet its energy needs.
Pakistan requires a novel electric power source. Given the current electricity shortage, this obligation is more pressing than ever, and Pakistan's role in reducing emissions from fossil fuels calls for looking into lithium alternatives alongside CPEC and other investors.
Pakistan possesses substantial lithium reserves. According to the Metal Mining Agency of Japan, these reserves may fulfil global demand for nearly 500 years. With China and India, two of Pakistan's major trading partners, investing extensively in electric vehicles (EVs), Pakistan has a significant chance of becoming a bigsupplier and a major consumer of this essential commodity.
“Given the existence of favorable geological environments in Pakistan which are found elsewhere for the occurrence of Lithium on a global level, Balochistan, KPK, and GB Provinces have been identified as target areas for finding this commodity in substantial quantities”, said Mr. Muhammad Yaqoob Shah, ex-General Manager (Geology) Pakistan Mineral Development Corporation Islamabad.
Exploration of lithium would have several advantages for Pakistan. As an example:
1) Job Creation: According to a recent International Labour Organization report, the mining industry has the potential to produce millions of jobs in Pakistan. With such substantial lithium deposits, exploration and mining activities could, directly and indirectly, create thousands of jobs.
2) Economic Growth: Lithium is a precious commodity, and exporting it may provide billions of dollars in revenue for Pakistan. It will also help in lowering poverty levels and provide Pakistan's economy with a much-needed boost.
3) Energy Security: Lithium-ion batteries play an essential role in renewable energy systems like solar and wind power. Pakistan would become less reliant on imported fossil fuels and boost its energy security by developing its own domestic supply of lithium.
4) Environmental Benefits: The mining of lithium has a minimal impact on the environment compared to other methods of mining. Lithium-ion batteries also have a decreased carbon footprint than traditional lead-acid batteries and are recyclable.
5) Social Benefits: Lithium mining can assist local communities by improving infrastructure and increasing access to social services.
Favorably, Pakistan is well positioned to benefit from these resources by capitalizing on the urgent need for suitable materials for use in renewable energy applications, as well as fulfilling its own growing domestic industry requirements. The exploration of these minerals and lithium in particular will add a significant asset to Pakistan’s portfolio, allowing it to obtain increased energy security as well as economic prospects through downstream production. To that end, the country is actively seeking financial partners willing to invest in scientific research that could result in promising possibilities for the elements within its energy sector.
Beijing has also expressed an interest in investing in Pakistan's mining sector in recent years. Given China's financial resources and mining knowledge, Chinese corporations have a significant opportunity to assist Pakistan in developing its lithium deposits. There are several ways China may help Pakistan utilize its lithium riches. For instance, Beijing may finance exploration and mining operations. Second, Chinese corporations might share their technological expertise with Pakistani industries to assist them in extracting lithium more efficiently. Finally, China may be interested in purchasing Pakistani lithium ore and processed lithium goods for use in electric vehicles and batteries.
Unfortunately, Pakistan lacks adequate energy supplies. Recent years have been marked by frequent power shortages that have stifled economic growth and sparked widespread concern. The World Bank estimates that Pakistan would need to add approximately 20,000 megawatts (MW) of energy to its grid by 2030 to fulfil the increasing demand.
Positively, Pakistan developed the Automotive Industry Development and Export Plan (AIDEP 2021-26) last year intending to encourage the local EV industry, bringing related manufacturing here and reducing the country's reliance on fossil fuels.
Thanks to CPEC, which is already assisting Pakistan in developing renewable energy projects such as hydroelectric reservoirs and solar fields to strengthen its economy and establish better transportation infrastructure. In recent news, a joint research centre between China and Pakistan is anticipated to deploy cutting-edge lithium battery technology within the next five years, which may revolutionize the global energy storage industry.
The use of lithium in CPEC projects could provide myriads of benefits to the country. The first is that technology might help Pakistan lessen its dependency on imported fossil fuels, making the country more energy-independent. Lithium batteries could also reduce air pollution and carbon emissions by providing clean, efficient electricity. Finally, lithium could cut the cost of power plants and energy systems, allowing for more effective resource utilization.
However, it is critical to assess the viability of employing lithium in Pakistani projects. Because lithium is expensive, the cost of installing and maintaining it may be prohibitively high. The use of lithium batteries may also pose possible safety issues due to their unstable nature. Finally, the country lacks lithium technological competence, making deployment challenging.
However hazardous it may be, lithium can nevertheless provide Pakistan with a reliable and sustainable source of energy. In light of the practicality and possible risks of lithium technology, Pakistan's economic standing and energy security will improve if it can develop its own lithium reserves and forge trade ties with China.