As soaring global demand for lithium shows no signs of abating amid a global shift to battery-powered vehicles to reduce carbon emissions, the acceleration of lithium mining and extraction in China is of keen interest to industry representatives at the “two sessions” policy-setting gatherings in Beijing.
Jiang Weiping, chairman of Tianqi Lithium, a leading lithium miner and products maker in China, suggested that the country expedite the extraction of lithium resources in southwestern Sichuan province, which has one of China’s richest and most accessible reserves.
Accelerating the development of lithium ore resources in Sichuan would complement Beijing’s inward-facing dual-circulation strategy, according to Jiang, who also serves as a delegate of the National People’s Congress, China’s top legislature.
That strategy was first mentioned in May 2020 at a meeting of the Politburo, the centre of power within the Communist Party, and puts greater emphasis on the domestic market – or internal circulation – as a strategic approach for China to adapt to an increasingly unstable and hostile outside world.
And when it comes to lithium – a critical component in electric vehicle (EV) batteries because it is lightweight, stores abundant energy and can be repeatedly charged – the current supply remains tight, according to Zeng Yuqun, chairman of Contemporary Amperex Technology (CATL) – China’s largest EV battery manufacturer.
The suggestions from the industry leaders echoed recent remarks by Xin Guobin, vice-minister of the Ministry of Industry and Information Technology, the main auto industry regulator in China.
Thanks to the rapid development of the country’s EV market, Chinese companies – including CATL and Tianqi – are currently the biggest buyers and investors of lithium mines around the globe and refine two-thirds of the world’s lithium.
The United States, in particular, has vowed to reduce its reliance on China in the lithium supply chain, by reshoring extraction to their own land. US President Joe Biden said last week that his administration was providing financial aid for the development of a new lithium-extraction project in California.
Compared with China’s global quest to secure the critical metal, its domestic extraction and mining progress has lagged behind. Currently, three-quarters of the mineral supply in China is dependent on imports, mainly from brine operations in Latin America and mineral operations in Australia.
Those two regions are home to 64 per cent of the world’s known lithium, according to the 2022 Mineral Commodity Summary from the United States Geological Survey (USGS).
China had about 7 per cent of the world’s lithium reserves as of last year, or about 1.5 million tonnes, putting it fourth globally after Chile, Australia and Argentina, according to USGS figures.
Most of China’s lithium resources are concentrated in salt lakes of the Qinghai-Tibet Plateau, where poor mining conditions – such as insufficient transport and electricity infrastructure – and proximity to ecologically sensitive areas, serve as detriments to industrial development.
In addition, lithium ore deposits have been detected in provinces such as Sichuan, Jiangxi, Xinjiang and Hunan.
And since 2020, the extraction of domestic lithium resources has been accelerating, mainly from brines in Qinghai and mica mines in Jiangxi, according to a January note from Citic Securities, the large Chinese brokerage.
The note predicted that lithium production in those regions could account for one-quarter of the global supply in 2022. The USGS said China accounted for about 14 per cent of the global supply last year.
