The lithium entry of Coal India shows India using PSUs to secure critical minerals and protect future EV and manufacturing growth.
Coal India Lithium Expansion: The PSU India Turned Into A Strategic Resource Weapon
The decision of Coal India to create a Chile-based arm to acquire lithium and copper assets looks, at first glance, like a company experimenting with diversification. A coal miner entering battery minerals sounds unusual but not historic. Yet the move is actually the visible endpoint of a policy shift that began more than a decade ago. What we are seeing today is not a sudden idea. It is the final stage of a long, quiet transformation in how the Indian state uses its public sector companies.
For most of its existence, Coal India had a narrow and urgent purpose. Produce as much coal as possible so the country does not go dark. In the late 2000s and early 2010s, power shortages were the defining economic risk. Factories shut, cities faced load-shedding, and growth forecasts depended on how quickly coal output could rise. The company was therefore judged purely on tonnage. More coal meant more electricity, and more electricity meant economic stability.
The first turning point arrived around 2014. India realised that producing coal domestically was not enough. Steel plants required coking coal that India did not have in sufficient quality. This is when the government pushed state firms, including Coal India, into the overseas resource hunt through the International Coal Ventures consortium and the Mozambique coal acquisition. That move did not bring spectacular profits, but it revealed a change in thinking. Coal India was no longer just a domestic producer. It became a tool to secure fuel beyond India’s borders. The objective had shifted from production to supply security.
The second phase came between 2016 and 2019. India’s problem was no longer only fuel shortage but import dependence. Fertilizers, industrial chemicals and feedstock were draining foreign exchange. Coal India was instructed to enter coal gasification and chemical production. Projects like the Talcher fertilizer revival and coal-to-chemicals plans were launched so coal could replace imported industrial inputs. The company’s role expanded again. It was now helping industry operate, not merely generating electricity. Coal was becoming a base for manufacturing inputs.
The pandemic marked the real strategic shift. When global supply chains collapsed in 2020, the lesson was clear. Even if a country has energy, factories can still stop if materials are unavailable. The economic risk had moved upstream. Around this period, the government’s Atmanirbhar approach began redefining public sector companies as instruments of resilience, not only production. Coal India was encouraged to diversify revenue, invest in new sectors and prepare for a world where coal demand would eventually plateau.
From 2021 onwards, the focus sharpened further. The global race for electric vehicles accelerated, and supply chains began concentrating around a few mineral-rich regions. India formally identified critical minerals essential for future industries. Lithium for batteries, copper for electrification and advanced metals for electronics became strategic inputs rather than commodities. Coal India started studying non-coal opportunities and renewable energy projects. This was no longer about energy security alone. It was about industrial sovereignty.
By 2023 and 2024 the logic had matured into policy. Private firms hesitated to invest abroad in politically sensitive mining regions because returns were uncertain and long-term. Yet without upstream ownership, downstream manufacturing policies risked failure. The state therefore needed an entity capable of thinking beyond quarterly profits. Coal India, already experienced in large-scale extraction and backed by government diplomacy, became the natural candidate. The company’s mandate expanded quietly from supplying power to securing materials.
The Chile lithium and copper subsidiary approved now in 2026 is the first visible outcome of that evolution. For the first time, Coal India is not acquiring fuel or fuel-related assets. It is targeting minerals that power batteries, electronics and renewable grids. The objective is not to run thermal plants but to ensure future factories never stop because another country controls the input.
This matters because India’s industrial ambitions face a structural weakness. The country can assemble vehicles, build electronics and expand renewable capacity, but it relies heavily on imported raw materials. When prices spike or exports are restricted, manufacturing slows regardless of domestic capability. Owning part of the source changes that equation. It does not make minerals free, but it makes supply predictable. Predictability is what allows large industries to exist.
The role of a public sector company therefore changes completely. In the past Coal India prevented blackouts. Today it is expected to prevent industrial shutdowns caused by global shortages. The shift is subtle but profound. Electricity security was about keeping homes lit. Mineral security is about keeping the economy competitive decades ahead.
There is also a geopolitical dimension. Countries that secured mineral resources early now dominate battery manufacturing. The lesson learned globally is simple: technology leadership follows material control. Entering late means permanent dependence regardless of engineering skill. India’s approach appears aimed at entering the supply chain before shortages lock the hierarchy.
The decision will not produce immediate benefits. Electric vehicles will not become cheaper overnight and mines will take years to operate. But its impact lies downstream. Stable lithium supply enables battery plants. Battery plants enable exports. Exports enable manufacturing scale. The mine sits quietly at the beginning of that entire chain.
Because of this, the Coal Ministry’s work rarely attracts public attention. Highways, railways and digital platforms show instant results. Resource security shows results only in the absence of crisis. If factories run smoothly in the future without supply shocks, the reason will trace back to decisions that seemed insignificant at the time.
Coal India’s lithium move therefore signals more than diversification. It marks the moment a commodity PSU becomes a strategic economic instrument. The company is no longer just extracting fuel for the present. It is being used to secure leverage for industries that have not yet fully arrived.
India is not merely buying into a mine abroad. It is attempting to ensure that its industrial future cannot be interrupted by someone else controlling the beginning of the supply chain.
