NMDC Ltd, a significant player in the Indian iron ore mining sector, has expanded its horizons into the exploration of lithium assets, targeting regions in both Africa and Australia.

This strategic move reflects the company's proactive approach to diversifying its resource portfolio and capitalizing on emerging opportunities in the global market.

The decision to explore lithium assets comes in response to the increasing demand for lithium, driven primarily by the burgeoning electric vehicle industry and the growing adoption of renewable energy technologies worldwide.

According to a source with direct knowledge of the matter, NMDC is currently engaged in negotiations to secure lithium assets in Africa and Australia.

The company's exploration efforts signify a bold step towards harnessing the potential of lithium, a critical component in the production of batteries for electric vehicles and energy storage systems.

By venturing into lithium exploration, NMDC aims to bolster its position in the rapidly evolving energy landscape while diversifying its revenue streams beyond traditional iron ore mining.

"We are a government company and we want to use the reservation route instead of auctions," the source explained, highlighting NMDC's preference for securing mining blocks through government nomination rather than participating in competitive auctions.

This approach aligns with the company's strategic vision of leveraging government support and regulatory mechanisms to streamline the acquisition process and minimize uncertainties associated with bidding processes.

Despite NMDC's silence in response to a Reuters request for comment, reports from June of the previous year revealed that the company's subsidiary, Legacy Iron Ore, had entered into a significant lithium exploration agreement with Australia's Hancock Prospecting Pty Ltd.

This partnership underscores NMDC's commitment to expanding its presence in the lithium sector, leveraging collaborative ventures to access the expertise and resources necessary for successful exploration and development initiatives.

Furthermore, in addition to exploring opportunities abroad, NMDC is actively seeking lithium blocks from the Indian government through nomination-based allocations, as disclosed by the source.

By pursuing lithium assets domestically, NMDC aims to contribute to India's efforts towards achieving self-sufficiency in critical minerals while bolstering the nation's position in the global energy transition.

Despite the promising prospects associated with its foray into lithium exploration, NMDC's shares experienced a 1.6% decline on Friday, reflecting fluctuations in investor sentiment and market dynamics.

However, this short-term fluctuation does not diminish the long-term strategic significance of NMDC's initiatives in the lithium sector, which hold the potential to drive sustainable growth and value creation for the company and its stakeholders in the years to come.