Lithium has been talked about for some time, as a raw material linked to the energy transition. Who is ahead on this resource? The answer is China.
In the war for raw materials, the one for lithium will become more and more bitter.
White gold, as it has been defined, is an essential resource for the energy transition and a key element for electric vehicles. The automotive giants, from Stellantis to Tesla, are looking for new agreements and projects to guarantee the supply necessary for their development.
Meanwhile, however, China is at the forefront when it comes to lithium and the rest of the world has not been quick enough to respond to its domination: this is the opinion of the CEO of American Lithium, an exploration company and development based in Canada, engaged in the development of lithium projects throughout the Americas.
His reflection reported in an article by CNBC is useful for understanding the world’s eternal battle to grab the raw materials for evolution. First it was coal, then oil and gas, now rare earths and lithium: the war of power between nations has already started for these last resources. And China appears to have the advantage.
China is winning the lithium challenge
Simon Clarke of the Canadian giant discussed how China secured its strong position within the industry: “For decades, the Chinese have been building knowledge of building Lithium-ion technology. And we were very slow to react.”
He added that the United States Inflation Reduction Act and a host of other measures offered the signal that the US was finally waking up.
The question of lithium is not trivial. In addition to its use in cell phones, computers, tablets and a host of other gadgets synonymous with modern life, this element is central to the batteries that power electric vehicles.
China is certainly a dominant force within the industry. At 14,000 tons, China’s lithium production in 2021 was unchanged from the previous year. 2020 saw the country’s raw material supply grow significantly from 2019’s 10,800 tonnes.
The dragon is also the largest consumer of lithium due to the booming electronics and electric vehicle industries. Nearly three-quarters of the globe’s lithium-ion batteries are made in China, which controls most of the world’s white gold processing plants.
In its World Energy Outlook 2022 report, the International Energy Agency said the Asian powerhouse accounts for about 60% of the world’s supply of lithium chemicals.
As demand for lithium increases, major economies are attempting to shore up their supplies and reduce dependence on other parts of the world, including China.
The stakes are high. European Commission President Ursula von der Leyen said in her State of the Union address in September that “lithium and rare earths will soon be more important than oil and gas”. In addition to addressing security of supply, von der Leyen also stressed the importance of processing this element.
Today Beijing controls the global processing industry and "almost 90%... of rare earths and 60% of lithium are processed in China", recalled the president of the EU Commission.
For this, a number of companies in Europe are trying to develop projects focused on security of supply. Paris-based mineral giant Imerys, for example, plans to develop a lithium mining project in central France, while a facility described as the UK’s first large-scale lithium refinery is expected to be located in northern England.
Looking ahead, American Lithium’s Clarke forecasts see growing geopolitical competition within the industry. There is an attempt to wrest part of the supply chain from China. It is not excluded that we start talking about war on lithium in a world increasingly thirsty for economic domination.
It should be noted that significant quantities of white gold are also found in Australia and Chile.
Original article published on Money.it Italy 2022-11-23 15:41:24.
Original title: La guerra del litio è iniziata. E la Cina sta vincendo
