In the era of new energy, how important is the lithium resource known as "white oil"?

Over the past 30 years, the energy metal lithium has become a valuable resource. As the lightest and least dense metal in nature, lithium is an important component of modern batteries, widely used not only in everyday mobile phones or laptops, but also in the rapidly expanding electric vehicle industry.


my country's lithium resources are very rich. Among them, salt lake brine lithium mines are concentrated in Qinghai, Tibet, Hubei and other provinces, and mineral lithium mines are mainly distributed in Sichuan Province and Xinjiang Uygur Autonomous Region.


In terms of lithium processing, my country also has obvious advantages. In 2021, China processed about 40% of the 93,000 tons of primary lithium mined globally. Hundreds of "gigafactories" across my country are supplying millions of electric vehicle batteries to domestic automakers and foreign automakers such as BMW, Volkswagen, and Tesla.


China's share of the lithium-ion battery market could currently be as high as 80 percent, according to research firm Bloomberg NEF. Six of the world's top 10 electric vehicle battery manufacturers are located in China, and 3 out of every 10 electric vehicle batteries in the world are produced by CATL, an advantage that even extends to the entire supply chain. Chinese companies have signed a number of agreements with lithium-rich countries to further expand supply chains.


In terms of consumption, the "China Lithium Battery Industry Development Index White Paper" proposes that my country has become the world's largest lithium battery consumer market for five consecutive years. It is reported that an electric vehicle battery contains 30 to 60 kilograms of lithium. U.S. automakers hope that electric vehicles will account for 40% to 50% of new vehicle sales in the country by 2030, according to Forbes, reflecting a dramatic increase in lithium consumption. Some experts predict that by 2034, the United States alone will need 500,000 tons of unrefined lithium a year to produce electric vehicles, which will far exceed the global supply in 2020.


Many countries are trying to gain more market share in the lithium-ion battery supply chain. According to Wired magazine, 13 gigafactories may be added in the United States by 2025, and 35 gigafactories may be added in Europe by 2035 to process lithium resources or produce lithium-ion batteries.


In March, U.S. President Biden announced plans to use the Defense Production Act to fund domestic mining of lithium and other critical battery materials. On the other side of the Atlantic, the European Union is advancing legislation to try to create a green battery supply chain in Europe that focuses on the recycling of lithium resources.


But building a lithium processing plant or gigafactory is still years away, and converting lithium ore into the purer lithium carbonate or hydroxide needed for batteries is an expensive and complex undertaking. At present, my country has at least two-thirds of the world's lithium processing capacity, which is also one of the most important factors for my country to dominate the lithium-ion battery market in the next few years.


A new lithium processing plant is located in Kwinana, a port city in Western Australia, Western Australia. In May, the plant successfully converted a lithium ore called spodumene into lithium hydroxide, which can be used in batteries. The major shareholder of the lithium processing plant is Tianqi Lithium, a Chinese supplier of new energy core materials for lithium batteries, which owns nearly half of the world's lithium production. Tianqi Lithium also holds stakes in Chilean Mining Chemicals (SQM) and Australia's Greenbushes lithium mine. In addition, Tianqi Lithium and Ganfeng Lithium have signed agreements with South America's "lithium triangle" region. The "Lithium Triangle" is located in the Andes where Argentina, Bolivia and Chile meet and is rich in minerals.


In addition to laying out the lithium supply chain, my country has further expanded domestic production. At present, my country's lithium supply is close to 10% of the world's supply, making it the third largest lithium producer after Australia and Chile.


As early as 2015, my country listed lithium as the focus of the "Made in China 2025" industrial strategy. Strategic plans such as "Made in China 2025" and "Special Plan for Scientific and Technological Innovation in the Materials Field during the "Thirteenth Five-Year Plan" period aim to promote structural changes in my country's new energy materials industry, comprehensively reshape technological methods, and form an open, competitive and cooperative development ecosystem. In addition, my country's vigorous promotion of electric vehicle purchase subsidies and other measures have helped open up the domestic market and the battery supply chain supporting it.


Some experts also said that fundamentally, lithium is not scarce. As prices rise, new technologies may become more economically viable. For example, a method to extract lithium from seawater, or a new battery chemistry that does not require lithium at all. However, in the short term, the shortage of lithium supply is still an important issue. For example, in the future, the world may face problems such as soaring lithium raw material prices and shortage of market supply.


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