MUMBAI/NEW DELHI -- Three Indian state-run companies are forming a joint venture to secure minor metals such as lithium and cobalt that could fuel India's plan for mass adoption of electric vehicles by 2030.

National Aluminum, Hindustan Copper and Mineral Exploration Corp. plan on exploring mines in Argentina, Bolivia, Chile and other countries for metals used to produce EV batteries, besides building strategic reserves of tungsten, nickel and rare earths.

India's efforts toward securing a supply of minor metals, experts say, is crucial at a time when China is threatening to restrict export of rare earths as part of its escalating trade war with the U.S.

The three companies are planning to explore alternative sources to meet growing demand from producers of electric cars. The joint venture, Khanij Bidesh India, will have an authorized capital of 100 billion rupees ($1.45 billion), with National Aluminum holding a 34% stake.

"The JV will acquire assets in overseas countries," said Hindustan Copper Chairman and Managing Director Santosh Sharma.

The tit-for-tat trade war between the U.S. and China, which began last year, will enter a new phase if China actually limits exports of rare earths.

The U.S. depends on China for 80% of these metals.

Seventeen rare-earth metals, including neodymium and dysprosium, are used in products ranging from electric motors and hard disk drives to drones and home appliances. Securing these metals is vital for India as it continues to build out its manufacturing sector, which will eventually include mass production of electric vehicles.

India aims to have electrics comprise 30% of its new vehicle fleet by 2030.

At present, India imports most rare earths in finished form as EV manufacturing is still in its infancy. According to the Indian Mines Bureau, total consumption of rare earths during the fiscal year ended March 2016 was 31.9 tons.

Zauba Technologies and Data Services estimates Indian imports of rare earths totaled $3.4 million as of 2016, of which $3.3 million came from China, followed by Hong Kong and South Africa.

Indian automaker Mahindra & Mahindra unveiled a two-seater concept EV in 2018. (Photo by Akira Hayakawa)

The joint venture will start exploring in Latin America, especially Bolivia, as the country is known to hold a fourth of the world's lithium reserves. Having direct access to lithium will help Maruti Suzuki, Mahindra & Mahindra, electric two-wheeler startup Twenty Two Motors and other domestic companies in their plans to produce batteries in India.

Maruti Suzuki -- the Indian unit of Japan's Suzuki Motor -- is the largest automaker India. It has earmarked 1.15 billion rupees to build a lithium-ion battery manufacturing facility in the western state of Gujarat in association with Toshiba and Denso.

Mahindra & Mahindra will invest 1 billion rupees on its expansion plans, which include setting up a new battery manufacturing plant in Chakan near Mumbai. The company has partnered with South Korean LG Chem in the facility.

Apart from EVs, the growth of other end-use industries such as advanced electronics is expected to drive demand for minor metals and rare earths in the country, which has a rising middle class and an economy growing at about 7% annually.

Meanwhile, other companies are looking to find rare earths at home. India holds about 6.9 million metric tons of rare earths -- one-fifth of the world's reserves -- but production has been extremely low, especially for commercial use.

State-owned Indian Rare Earths processes monazite ore, which contains rare earths, at a plant in the eastern state of Odisha, largely for defense applications. In April last year, it partnered with NMDC, another state-owned company previously known as National Mineral Development Corp., to explore rare earth opportunities at home and abroad.

Japanese trading house Toyota Tsusho and its wholly owned local subsidiary Toyotsu Rare Earths India procures mixed rare earths chloride from Indian Rare Earths. The companies have been exporting refined rare-earth metals to Japan, Europe, the Americas and other nations since 2016.

The Indian government in February channeled exports of beach sand minerals through Indian Rare Earths, restricting private sector miners in dealing with garnet, leucoxene, sillimanite, ilmenite, zircon, monazite and other resources.

Major consumers of these minerals are actively seeking alternative sources, offering India an opportunity to enhance production.

India can very well be an alternative supplier of rare earth to the world as it "has large reserves of monazite and is unexplored for other rare-earth minerals," said Jack Lifton, co-founder of U.S.-based Technology Metals Research. "What's missing is a domestic downstream processing supply chain. If this is constructed, India will become a major producer."