State-run miner NMDC is examining the option of picking up a stake in junior exploration companies focused on lithium mining in Australia to secure off-take of the mineral which is critical to India’s decarbonisation journey.

NMDC, which is primarily engaged in iron ore mining in India, has identified a few entities that have exposure to lithium, which forms the bedrock of batteries for electric vehicles. Australia is known to have the largest deposit of lithium in the world.

The company’s move is in line with the Centre’s directive to secure supply of crucial minerals in the years to come.

NMDC’s investment philosophy will be guided by off take agreements with the explorer.

“We have a company in Australia called Legacy. The government mandate is also that we need to pick some offtake arrangement. We are working on it,” Sumit Deb, chairman and managing director of NMDC Ltd, said.

He later explained that investment from NMDC/Legacy would be linked to off take. “Right now it is in a very nascent stage,” Deb added, at the sidelines of the Global Mining Summit, organised by CII in Calcutta.

NMDC owns 90 per cent share in Australian Stock Exchange listed Legacy Iron Ore Limited, led by CEO Rakesh Gupta. There are 4-5 junior exploration companies which are in the radar of NMDC/ Legacy and a few deals may be struck in a year, even as production from these assets, if any, will start in 5-6 years from now, sources said.

Investing in smaller exploration companies will allow NMDC to contract production ahead of competition, especially China.