For a long time, the world has been gripped by a rivalry between the two major superpowers, the People’s Republic of China and the United States, which is primarily economic in nature but inevitably affects science and technology. Any significant technological advancement becomes a field of Sino-American competition.
Lithium-ion batteries (LIB), for example, are now extensively used as a source of energy in a wide range of devices that surround modern man. To get an idea of the gigantic scale of LIB production and the size of their market, consider that they are most commonly used as a power element in cell phones, laptops, and drones.
In recent years, as the ideology of fighting for the environment has spread in developed countries, industries such as the electric vehicle industry have gained traction. According to some projections, electric vehicle sales could account for up to 28% of total automobile sales by 2030. Despite their dubious economic and environmental impact, electric vehicles are a highly fashionable and rapidly developing industry that is attracting massive investments. Because electric cars use LIBs, it is only natural to assume that whoever controls the majority of the LIB market for electric vehicles will enjoy enormous profits and influence.
Of course, the resource base serves as the foundation for production. The metal lithium is used in the manufacture of lithium-ion batteries. There are an estimated 86 million tons of this metal in the world.
In descending order, Bolivia, Argentina, and Chile have the world’s largest lithium reserves, and their borders meet in the so-called “lithium triangle” – the world’s largest deposit of this mineral. The United States is in the fourth place, followed by Australia, China, the Democratic Republic of the Congo, Canada, Germany, and Mexico. Australia is currently the largest producer of lithium among these countries. However, in order to begin full-scale production, additional resources, as well as the necessary scientific and technical foundation and industrial infrastructure, are required. As a result, it is not surprising that mainland China, which has both, is the world’s leading producer of LIB.
China is the world’s third-largest lithium producer. However, almost all of the lithium mined in Australia is processed there. 51% of Greenbushes, Australia’s largest lithium miner, are owned by Tianqi Lithium, a Chinese company. SQM, one of the world’s largest lithium mining companies, operates in the aforementioned Latin American “lithium triangle,” and 23% of its shares belong to the same Tianqi Lithium.
At the same time, China is expanding the development of its own lithium deposits. Large new lithium deposits, for example, were discovered in 2020 in the southwest of China, near the city of Yuxi, where it was decided to establish a full LIB production cycle – from material extraction to finished batteries. In Yuxi, a special lithium battery team was formed to attract investment in the development of an industrial chain for mining, processing, and marketing finished products. At the site, a new plant for producing anode material for LIB has already been constructed. This plant is expected to have a capacity of up to 200,000 tons by the end of 2024. Yuxi city government intends to make its city one of the most important centers of LIB production, with a $100 billion turnover by 2025.
China has produced more than 75% of the LIBs entering the global market in recent years. According to data for the first quarter of 2022, the leading producer of LIBs for electric vehicles is the Chinese company CATL, which captured 35% of the global market, ahead of South Korean competitor LG Energy. BYD, another Chinese company, came in third place. In the coming years, all three companies intend to increase production and competition.
Germany, which, as previously stated, is one of the ten countries with the largest natural lithium reserves, is preparing to compete for the global lithium-ion market. Large investments are planned in German LIB production in the near future, with the goal of making Germany the second-largest producer of Li-ion batteries in the world by 2025. But it is clear that China is the undisputed leader, and it has no intention of relinquishing its position.
However, given the modern world’s continuous growth in LIB consumption and production, one can confidently predict that humanity will face a lithium shortage and competition for its deposits sooner or later, just as it is now with hydrocarbon fuels. If the “green” ideology’s predicted complete switchover to electric cars is the near future of humanity, then the state or corporation with the most control over lithium supplies will be one of the most powerful forces on the global stage. As a result, the most ambitious and powerful states may be concerned about controlling lithium deposits in less developed and less independent countries even now. This assumption may add new hues to the current geopolitical clash between the superpowers China and the United States.
This article has already mentioned Chinese companies’ involvement in lithium production in Australia and Latin America (the “lithium triangle” of Bolivia, Argentina, and Chile). It should be noted that both Australia and Latin America are accustomed to viewing the United States as their sphere of influence. It appears that Washington will take steps in the near future to reduce Chinese influence in the Australian and Latin American lithium industries. Given how easily it forced Canberra to cancel its largest defense contract with France in 2021, the US is likely to succeed without much difficulty in Anglo-Saxon Australia. Latin America could prove more difficult: China seeks to establish itself as firmly as possible in this “US backyard,” working bilaterally and collectively with each Latin American country in the China-Latin America and Caribbean Forum, as well as the Belt and Road global transport and economic initiative. Reports of a Chinese electronic reconnaissance base recently discovered in Cuba attest to Beijing’s successes and serious intentions in the Western Hemisphere.
As previously stated, Canada has significant lithium reserves. Canada, like Australia and Latin America, is in the American sphere of influence, so its allegiance to the White House is understandable.
Germany, which is known to have US military bases, is also unlikely to abandon Washington.
The Democratic Republic of the Congo has some of the world’s largest lithium reserves. There is a chance that China and the United States will engage in a fierce competition for the DRC’s lithium resources in the coming years.
As lithium’s role in the global industry grows, we can expect increased competition between the US and China for lithium resources, primarily in Africa and Latin America. This could become an important new component of the already-existing global Sino-American rivalry.
Dmitry Bokarev, political observer, exclusively for the online journal “New Eastern Outlook.”