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State-run Coal India Ltd is exploring lithium blocks in Argentina along with a U.S. company to secure supplies of the battery material, an Indian source with direct knowledge said on Tuesday.

The efforts are part of India's membership under the U.S.-led Minerals Security Partnership (MSP), which New Delhi joined last year to ensure adequate supplies of minerals to meet zero-carbon goals.

India has been exploring ways to secure supplies of lithium, a critical raw material used to make electric vehicle batteries. Prime Minister Narendra Modi's government last year listed 30 minerals, including lithium, nickel, titanium, vanadium and tungsten, as critical to drive the adoption of clean energy.

India and the United States said on Monday they were co-investing in a lithium resource project in South America and a rare earths deposit in Africa to diversify critical minerals supply chains.

India has been in talks with several countries, including the U.S., to collaborate in lithium processing and avoid relying on China, Reuters had reported. The rare

"Coal India has come forward for the Kachi block in Argentina in which a U.S. company and two other countries are interested to explore under the MSP," the source said, declining to be identified due to the sensitive nature of discussions.

Preliminary studies are being conducted, the source added.

Australian miner Lake Resources <LKE.AX>, which has a lithium project in Kachi, is targeting 50 kilotonnes of annual battery-grade lithium from the project by 2030.

Coal India shares turned positive after the Reuters report, rising as much as 1.2% before trimming gains to trade 0.3% higher.

Shares of the company had been down 0.2% before the news.

In February, U.S. Secretary of State Antony Blinken said on a trip to Argentina that the U.S. was exploring investment opportunities in critical minerals, especially lithium.

Coal India and India's federal Ministry of Mines did not immediately respond to Reuters' emails for comments.

Under the minerals partnership, which India had joined last year, New Delhi was invited to participate in 20-25 critical minerals projects, of which four have been identified by the Indian government, with two of these are in collaboration with the U.S., the source said.

The second project is in the Kangankunde block in Malawi, the source said, which is being explored by India's state-owned IREL (India) Ltd for rare earths.

IREL did not immediately respond to a Reuters email seeking comments.

The Indian government has also asked miners to explore critical minerals in Australia's Dubbo region, the source said.

India had also proposed a critical minerals trade deal with U.S., which would prohibit imposition of tariffs on both countries by each other and would be similar to a pact U.S. has with Japan that grants Japanese automakers wider access to U.S. electrical vehicles tax credit, the source said.

However, the U.S. is in talks with India for a bilateral Critical Minerals Memorandum of Understanding (MoU), both countries said on Monday.