The world can’t wean itself off Chinese lithium

The economic port of Kwinana on Australia’s western coast is a microcosm of the worldwide vitality business. From 1955, it was residence to one of many largest oil refineries within the area, owned by British Petroleum when it was nonetheless the Anglo-Persian Oil Firm. It as soon as offered 70 p.c of Western Australia’s gas provides, and the metallic husks of outdated tanks nonetheless dominate the shoreline, slowly turning to rust within the salt air.

The refinery shut down in March 2021, however it isn’t simply oil beneath the area’s pink soil: Australia can be residence to nearly half of the world’s lithium provide. The vans and equipment are buzzing as soon as once more, however now they’re a part of a race to safe the clear vitality sources of the long run—a race being dominated by China.

Over the previous 30 years, lithium has turn into a prized useful resource. It’s an important element of batteries—for the cellphone or laptop computer you’re studying this on, and for the electrical automobiles that can quickly rule the roads. However till not too long ago, the lithium mined in Australia needed to be refined and processed elsewhere. Relating to processing lithium, China is in a league of its personal. The superpower devoured up about 40 p.c of the 93,000 metric tons of uncooked lithium mined globally in 2021. Tons of of so-called gigafactories throughout the nation are churning out tens of millions of EV batteries for each the home market and international carmakers like BMW, Volkswagen, and Tesla.

China’s share of the marketplace for lithium-ion batteries might be as excessive as 80 p.c, based on estimates from BloombergNEF. Six of the ten greatest EV battery producers are primarily based in China—one in every of them, CATL, makes three out of each ten EV batteries globally. That dominance extends by way of the provision chain. Chinese language firms have signed preferential offers with lithium-rich nations and benefited from large authorities funding within the complicated steps between mining and manufacturing. That’s made the remainder of the world nervous, and the USA and Europe are actually scrambling to wean themselves off Chinese language lithium earlier than it’s too late.

An electrical automobile battery has between 30 and 60 kilos of lithium. It’s estimated that by 2034, the US alone will want 500,000 metric tons of unrefined lithium a 12 months for EV manufacturing. That’s greater than the worldwide provide in 2020. Some consultants concern a repeat of the oil disaster sparked by Russia’s invasion of Ukraine, with geopolitical pressure spilling over right into a battle of sanctions. Such a state of affairs may lead to China shutting off its provide of batteries simply as Western automakers want them to energy the swap to EVs.

“If China decides to stay with the house market, lithium-ion batteries are going to be dearer outdoors China,” says Andrew Barron, a professor of low carbon vitality and the surroundings at Swansea College. That makes Western efforts to increase battery manufacturing capability “extra crucial than ever,” he says.

These efforts are taking form, albeit slowly. If the whole lot goes to plan, there will likely be 13 new gigafactories in the USA by 2025, joined by an extra 35 in Europe by 2035. (That’s an enormous if, with many tasks beset by logistical issues, protests, and NIMBYism, most notably Tesla’s controversial gigafactory close to Berlin.)

However these gigafactories are going to wish lithium—and many it. In March, US president Joe Biden introduced plans to make use of the Protection Manufacturing Act to fund home mining of lithium and different essential battery supplies below the auspices of nationwide safety. Throughout the Atlantic, the European Union is advancing laws to try to create a inexperienced battery provide chain inside Europe, with a deal with recycling lithium.