China’s lithium reserves have risen to 16.5% of the global total, up from 6%, says Xinhua, the leading Chinese media agency. It is now the second-largest holder of this critical battery metal.
Interestingly, China has now surpassed both Australia and Argentina in lithium reserves. So, what sparked this nearly 3X increase in lithium deposits? And with such massive reserves, can China become self-reliant in lithium production? Let’s explore.
What Led to China’s 3X Lithium Boom?
China Geological Survey (CGS) revealed this leap elevated China’s global ranking from sixth to second. As the top consumer of this vital battery metal, China relied heavily on imports. To address this, Beijing has intensified domestic exploration. The goal? To strengthen its supply chain and boost self-sufficiency and capacity for new energy vehicle (NEV) production.
CGS has unlocked important updates on China’s breakthrough in lithium exploration.
Lithium Findings Across Key Regions
Wang Denghong, a senior scientist at CGS explained that China has been ramping up nationwide lithium exploration efforts Since 2021. These initiatives uncovered over 30 million metric tons of lithium ore across regions like Sichuan, Qinghai, Jiangxi, and the Xinjiang Uygur and Inner Mongolia autonomous regions. Key discoveries include:
- Lepidolite Lithium: Approximately 10 million tons were found in Hunan, Jiangxi, and Inner Mongolia.
- Brine Lithium: Qinghai’s reserves now total about 10 million tons.
- Spodumene Lithium: Xinjiang added another 10 million tons to the tally.
Exploration in Tibet also revealed a 2,800-km-long spodumene belt in the Xikunsong-Pan-Ganzi region, further boosting China’s reserves.
Technological Advancements Lower Costs
The CGS highlighted advancements in lithium extraction from lepidolite which they consider a “challenging” mineral. These technological upgrades made extracting the 10 million tons of lepidolite reserves more efficient and cost-effective.
Additionally, China’s salt lake lithium resources have increased significantly. So now it has over 14 million tons of lithium in its salt lakes. It’s the world’s third-largest lithium resource in a salt lake, after South America’s lithium triangle and the western US.
Salt lakes are an eco-friendly and cost-effective source of lithium that can substantially enhance China’s resource base.
Lithium Demand Fuels Growth in China
Lithium has become a critical resource for modern industries. It powers batteries used in electronics, electric vehicles (EVs), and energy storage systems. The rapid expansion of the EV market has pushed global lithium demand to new heights.
China’s EV market remains the largest contributor to lithium demand. As people and industries shift from traditional fuels to electric vehicles, demand is expected to rise further by 2025.
Source: ICCT
As per the International Council on Clean Transportation (ICCT) Global and Regional Battery Material 2024 report, BEV and PHEV sales shares reach 60% for new light-duty vehicle sales nationwide in 2030 and remain constant thereafter.
The assessment assumes that most of these combined BEV and PHEV sales will be BEVs, with PHEV sales shares decreasing from 10% in 2023 to 4% in 2030 and 3% thereafter.
Easing Supply Constraints
China houses the world’s top lithium battery manufacturers, including CATL, BYD, Gotion, EVE Energy, and A123, which have customers worldwide. This is why China’s lithium demand is constantly high.
According to ICCT, it’s predicted that China’s demand for lithium will reach 125 kt in 2030 and 163 kt in 2040. This indicates a steady rise from 39 kt in 2023.
Annual raw material demand for lithium in China under the Baseline and demand reduction scenarios
Source: ICCT
However, the country’s new technologies and discoveries could ease its lithium supply issues and reduce dependency on imports.
Global Impact of China’s Lithium Expansion
The massive expansion of China’s lithium reserves can potentially meet both domestic and industrial needs. Analysts also expect a boost to stabilize supply chains, and production costs, and support the sustainable growth of lithium markets worldwide.
However, it could also intensify competition among nations vying for this crucial resource.
China’s new lithium discoveries are a major step in its renewable energy efforts and in reducing fossil fuel reliance. This surplus lithium will enhance EV batteries and energy storage, and ensure a steady supply for future technologies. Precisely, China has taken the next step to continue dominating the global resource market.
