Chinese firms have dominated half of the significant lithium deals since 2018, according to a study.
China’s Growing Influence in the Global Lithium Market
China’s presence in the critical minerals sector, particularly in the lithium market, is steadily expanding as the country strategically secures more resources. According to a recent S&P study, Chinese firms have accounted for half of the major lithium deals valued at over $100 million since 2018, totaling more than $7.9 billion.
“Heeding urgings from the industry, the Chinese government is likely to take more supportive actions, as it views these sectors as integral to the country’s core strategy,” the study explains. “This alignment of interest will facilitate the development of China’s influence over these minerals and the industries that rely on them as more Chinese firms secure access and expand production capacity.”
Lithium is a crucial material in the transition to cleaner energy and has been deemed essential to the economic and national security of the United States by the Department of Energy. However, Chinese firms have been more active in mergers and acquisitions within the lithium sector. The study reveals that Chinese mining majors and lithium producers have been rapidly acquiring these assets since 2021, coinciding with the surge in lithium prices. This trend has attracted the attention of miners, battery makers, and electric vehicle manufacturers, all vying to establish a foothold in the market.
These developments intensify the competition between Beijing and Washington for dominance in the lithium market, which is vital for electric vehicles, renewable power, and various technologies. Additionally, it poses a challenge to the Biden administration’s goal of electrifying multiple sectors without relying on foreign adversaries.
Leading lithium producers like Ganfeng Lithium Co. Ltd. and Tianqi Lithium Corp. are actively seeking upstream raw materials to expand their production capacities. Metal miners, such as Zijin Mining Group Co. Ltd., are also venturing into the lithium market to diversify their portfolios and capitalize on the mineral’s growth potential.
Despite facing more restrictive foreign investment policies, Chinese firms are exploring alternative sources for critical minerals. They are expanding their presence in countries like Argentina, Mali, Mexico, and even within China itself. Furthermore, China currently controls the majority of lithium offtake agreements in Africa.
In conclusion, China’s increasing influence in the global lithium market poses significant challenges and opportunities for other nations, particularly the United States. As the demand for lithium continues to rise, the race for control over this essential resource becomes more critical than ever.
Read more:
" Conservative News Daily does not always share or support the views and opinions expressed here; they are just those of the writer."
*As an Amazon Associate I earn from qualifying purchases
Now loading...