via Metal Miner
Nicknamed “white gold,” lithium is invaluable in the modern world. Although the price of lithium has fallen significantly from its record highs in late 2022, China still dominates the lithium supply chain, which is why multiple countries continue to try to get their hands on this precious metal.
Lithium is a key component in rechargeable batteries for electric vehicles and solar/wind power generation, while lithium-ion batteries, with their high energy density and long life, have also become a common component in consumer electronics such as smartphones and laptops.
China not only dominates the global lithium refining industry, but also controls much of the lithium supply chain. Ironically, China itself holds less than 7% of the world’s lithium reserves. China is also the largest importer and refiner of the metal, consuming 70% of all lithium compounds. Meanwhile, China accounts for 70% of global lithium production, primarily for its domestic lithium battery manufacturers.
Lithium prices fall in 2023 but sourcing remains contentious
While the United States and some European countries want to break away from China’s dominance, China itself is scouring the world for lithium resources. In fact, a few days ago, Bloomberg Well-known Chinese battery component maker CNGR is reportedly considering buying a stake in an Argentine brine deposit to build a new link in its supply chain.
CNGR executives reportedly personally visited three deposits in Argentina last week, including the Jama project in Jujuy province and the Rincon project in Salta province, and said the company aims to develop an upstream lithium supply chain for customers in Western countries.
Recently, the company acquired a 90% stake in Argentina’s Lithium Energy S.A.’s Solaros lithium brine project, while it and African private investment fund Al Mada inked a deal for an industrial centre in Morocco last September, and just a few weeks ago Posco Holdings and China’s CNGR announced the establishment of a nickel and precursors production facility. Facility The move, based in Pohang, South Korea, will mark a major step forward for the global battery materials supply chain.
India also moves to secure lithium supplies
Meanwhile, China’s neighbor India is working to secure its own lithium supplies. Media CoverageBattery materials maker Altmin is currently in talks with the Australian government about access to the country’s lithium supplies. Altmin, India’s only cathode active materials maker, sources its lithium carbonate from Brazil and Bolivia. As India does not have lithium processing facilities, the government continues to offer incentives to encourage private companies to set up such facilities locally.
About a year ago, Altomin partnered with Bolivian state-owned company Yacimientos de Licio Bolivianos to set up a lithium iron phosphate material production plant in Bolivia. Altomin plans to eventually source lithium carbonate from YLB’s Bolivian plant for its India operations. Additionally, the company is reportedly considering building lithium refineries in Brazil and Australia.
Lithium market hinges on China and Africa
As the world transitions to sustainable energy, the availability of lithium will play a key role in the success and efficiency of future renewable energy projects. China has the largest fleet of EVs in the world and is also a leader in lithium refining. Over the years, China has established monopolies in the supply chains of several minerals, including cobalt, lithium and many rare earth metals.
African countries with abundant lithium resources have long been of interest to China. Just 5% of the world’s natural lithium ore reserves are in Africa, and several countries, including the Democratic Republic of Congo, Ethiopia, Ghana and Mali, have relatively large lithium deposits. This represents a huge opportunity to generate significant revenue as global demand for battery components grows.
Africa’s lithium industry booms
However, building a full-scale lithium processing plant in any African country would require a stable supply of electricity and raw lithium. Other major challenges include a lack of transport infrastructure and the region’s unique political instability. Analysis Report This shows that China continues to buy up African mines for rare earth elements and other minerals, then ship the raw materials back to China for refining. Meanwhile, Africa needs this Chinese help, at least in the short term, to develop its own lithium industry.
The situation is fraught with contradictions. For Africa to fully benefit from its lithium supplies, it needs to build its capacity and effectively manage its relationship with China. In that respect, the ongoing conflict in Namibia could set a precedent for other lithium-producing African countries to secure better terms with China. Ultimately, the success of the global energy transition may depend on how effectively Africa can negotiate with China and other developed countries over lithium exploration.
Sohrab Darabsho
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