Tomorrow Investor

China Pulls Out Stops to Gain 1/3 of Global Lithium Sector by 2025


It’s a risky gamble that could put China in a precarious situation if it fails, but the country’s massive push to control around a third of the global lithium industry could deliver serious payoffs should it succeed.

Over the past few years, China has spent billions to buy out lithium stakes across the globe in order to secure a larger portion of the metal that had earned the moniker “the new gold” due to its importance in the booming electric vehicle (EV) sector. But it’s a spending spree partly driven by fear.

Given rising tensions between China and numerous nations, particularly the United States, Canada, and Australia, it is possible that the country’s prolific EV manufacturing sector could be in jeopardy if it fails to secure a sustainable – and ample – supply of lithium before the end of the current decade.

This is a struggle that has become more difficult as Canada and Australia have both blocked new Chinese investments into local lithium mining stakes, citing issues related to national security.

How Much Has China Spent So Far – and What Does It Stand to Lose?

Since 2021, Chinese mining firms have collectively spent around $4.5 billion to buy stakes in lithium mines in Africa and Latin America. So far, these include investments in Chile, Mali, Mexico, Nigeria, and Zimbabwe. However, despite having paid for such stakes, a number of factors may cause the Chinese to lose them.

Chinese holdings in Mali and Nigeria are under the specter of terrorism, as militant groups resentful of any perceived colonialism are bound to attack. On the other hand, Chinese companies are scrambling to broker deals with the governments of Chile, Mexico, and Zimbabwe, all of which have begun to assert and gain control over their mineral resources.

While Zimbabwe imposed an export ban on unprocessed lithium back in December to keep foreign companies from taking their lithium for processing overseas, Chile has upped the ante by expressing a desire to create a regulatory cartel along the lines of the Organization of the Petroleum-Exporting Countries (OPEC) with regard to lithium.

Chile’s proposed lithium cartel may include nations like Bolivia which has nationalized its mineral resources and holds a fifth of the world’s total lithium deposits, as well as Argentina.

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