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Hao Tan
Hao Tan

The View | China and lithium: why it’s time to retire the narrative of resource nationalism

  • While some in China are concerned by its dependence on imported materials for electric vehicle batteries, the West is anxious about Chinese control of resources
  • Fundamental differences exist between mineral and energy resources, however. Unlike oil and gas, minerals are recyclable

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A Controlled Thermal Resources flag and a US flag fly atop a drill rig at the company’s Hells Kitchen Lithium and Power project in Calipatria, California, on December 15. Mineral reserves are not fixed in time. As prices increase, exploration and mining intensify, often leading to expanded reserves. Photo: Bloomberg
Hao Tan
Electric vehicles and their upstream industries were big winners in the global economy in 2021. The growth of China’s electric vehicle industry has been particularly impressive; following a market expansion of 180 per cent in the first 10 months of the year, it now accounts for about half of global EV sales.

This has led to a surge in demand for the essential materials for rechargeable batteries, including lithium, nickel and cobalt. Lithium has been dubbed “white oil” and the price of battery-grade lithium carbonate in the Chinese market increased more than fivefold over the past year.

The clean energy transition is expected to drive substantial demand from the Chinese electric vehicle industry for these mineral resources over the coming decades. Around 80 per cent of the raw lithium used in China is currently imported however, with about 60 per cent originating from Australia. Dependence on foreign cobalt is even higher – with about 90 per cent being imported, primarily from the Democratic Republic of Congo.

There is an increasingly popular view in China that it should reduce its dependence on imported mineral resources by increasing domestic mine production, and meanwhile ramp up state support for investment in overseas mining projects.

A worker from a small-scale miner works at Tilwizembe, a former industrial copper-cobalt mine, outside of Kolwezi, in the south of the Democratic Republic of the Congo, in June 2016. The Congo is the top supplier of China’s cobalt imports. Photo: Reuters
A worker from a small-scale miner works at Tilwizembe, a former industrial copper-cobalt mine, outside of Kolwezi, in the south of the Democratic Republic of the Congo, in June 2016. The Congo is the top supplier of China’s cobalt imports. Photo: Reuters

An academician of the Chinese Academy of Sciences recently called for the establishment of new national organisations for developing strategic mineral resources around the globe – similar to China National Offshore Oil Corporation.

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