OCTOBER 20238INDIA WANTS SAUDI ARAMCO TO DEVELOP A STRATEGIC PETROLEUM RESERVEIndia seeks to improve ties with its main oil supplier by including Saudi Arabia's Aramco in its projected 6.5 million metric tonnes (MMT) strategic petroleum reserve (SPR) initiative. For years, the two countries have discussed Aramco's involvement in the SPR initiative. However, after Crown Prince Mohammed Bin Salman's meeting with Prime Minister Narendra Modi last month, the negotiations gained momentum.The Indian government stated in an internal document that "Saudi Arabia's Aramco can be invited to participate in Phase II" and that construction of two new commercial-cum-strategic petroleum reserves of 6.5 MMT have been approved under the Phase II Strategic Petroleum Reserves Programme. India revised its SPR policy in 2021, adopting a strategy that was used by nations like Japan and South Korea and permitting the commercial sale of crude to encourage private investment in the construction of new storage facilities.India, the third-largest importer and consumer of oil in the world, has developed strategic storage at three locations in southern India to hold more than 5 million tonnes of oil to guard against supply disruption. India imports more than 80 percent of its oil needs. The 1.5 million tonne SPR in the southern city of Mangaluru is home to 750,000 tonnes of oil storage that Abu Dhabi National Oil Company (ADNOC) has leased.According to a government release, India has held two road shows for the second phase of its SPR plan and garnered interest from businesses such as Trafigura, British Petroleum, Petrochina, Hyundai, Gulf Energy, Glencore, and Shell. Anish De, a partner at KPMG, commented on a potential transaction between Saudi Aramco and India, saying that "getting the investment there will align the economic and political interest". The two nations are acting for good political and economic reasons.CABINET APPROVES ROYALTY RATES FOR MINING OF LITHIUM & TWO OTHER MINERALSIndia imposed mining fees for three essential minerals, including lithium, that are essential to achieving its goals for renewable energy. The London Metal Exchange (LME) will set the royalty rates for lithium extraction by mining companies at three percent of those prices.Lithium is a crucial raw material used to produce electric car batteries, and India has been looking for ways to secure supply of this material. In February, it discovered its first lithium resources in the federally controlled territory of Jammu & Kashmir. The government also fixed the mining royalties for rare earth elements (REEs) at one percent of the average sale price of rare earth oxide and three percent of the average sale price for niobium. Batteries for electric vehicles also contain niobium. The clearance will open the door for the nation's first sale of mining blocks for the three minerals. "Critical minerals have become essential for economic development and national security in the country" . "Critical minerals such as Lithium and REEs have gained significance in view of India's commitment towards energy transition and achieving net-zero emission by 2070." India intended to set the extraction-related royalty rate at three percent in June. Later this year, India is anticipated to auction off the freshly discovered lithium blocks, which are thought to contain 5.9 million tonnes of reserves. Adani Enterprises, Vedanta Ltd, Reliance Industries, Jindal Steel and Power Ltd, Himadri Chemicals, and Korea's LX International are just a few of the domestic and international businesses that are likely to participate in the auction. A effort by large economies to secure lithium supplies coincides with plans to auction off India's lithium reserve. A new alliance between the US, Canada, and other nations has been formed with the goal of assuring the supply of vital minerals, such as lithium. TOP STORIES
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