China has struck gold, or rather, "white gold," as the Ministry of Natural Resources announces the discovery of a staggering one million tonnes of lithium in Yajiang county, Sichuan province, China Daily reported.
This photo taken on March 12, 2021 shows a worker with car batteries at a factory for Xinwangda Electric Vehicle Battery Co. Ltd, which makes lithium batteries for electric cars and other uses, in Nanjing in China's eastern Jiangsu province. - China OUT (Photo by AFP) / China OUT
China Strucks Massive Lithium Deposits
Lithium, often referred to as "the new oil" or "white gold," is a critical component in the production of electric vehicle (EV) batteries, aligning with China's strategic focus on dominating the renewable battery sector globally.
As SCMP notes, the newfound deposit is expected to further fuel the already outsized EV battery industry, a key driver of China's economic growth. Despite having only 7% of the world's identified lithium resources, China currently refines approximately half of the world's lithium and heavily relies on imports.
This discovery catapults China's lithium supply, potentially reducing dependence on overseas markets. The nation has been actively positioning itself as the global hub for renewable batteries, with this newfound resource catalyzing increased investments in China's EV battery sector.
China's Global Lithium Position
China's current lithium position, ranking sixth globally in identified resources, puts it behind countries like Bolivia, Argentina, the US, Chile, and Australia.
However, China's prowess in refining lithium and its dominance in the production of electric vehicle batteries, accounting for around 70% globally, showcases the nation's strategic advantage.
This lithium windfall comes at a time when the world is witnessing an intensified global race for essential resources for a burgeoning electric vehicle (EV) industry, and China's dedication to exploring domestic resources aligns with its broader goals of achieving energy and resource security.
Meanwhile, Thailand, emerging as a major EV production base in Asia, has also reported significant lithium discoveries, intensifying the competition in the region.
It is important to note that many minerals not mined in China are shipped there for refining because the international market cannot compete, including lithium. China refines more than 50% of the world's lithium.
China's Focus on Green Energy
China's economic landscape, already shaped by a shift from traditional sectors to green technologies, is set to benefit further from this lithium jackpot.
The value of China's combined exports of lithium batteries, solar batteries, and new-energy vehicles surpassed 1 trillion yuan ($139 billion) last year. Shenzhen-based BYD has even overtaken Tesla as the world's largest EV maker in finished vehicles.
Despite this triumph, challenges persist. Lithium projects are deemed "highly risky" with potential delays between resource discoveries and their commercial viability.
To mitigate risks, the Ministry of Natural Resources intends to enhance regional cooperation with lithium-rich countries, including Argentina, Bolivia, and Chile, forming what's often termed the "lithium triangle," SCMP also reported.
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