The World Can’t Wean Itself Off Chinese Lithium

The Kwinana port is an example of the global energy industry. The Anglo-Persian Oil Company owned the largest oil refinery in the region from 1955 to 1955. It used to provide 70% of Western Australia's fuel supplies, and the metal husks of old tanks still dominate the shoreline.

The refinery shut down in March 2021, but it isn't just oil below the region's red soil. The race to secure the clean energy sources of the future is being dominated by China as the trucks and machinery are humming once again.

It has become a prized resource over the past three decades. For the phone, laptop, and electric vehicles that will soon rule the roads, it is a vital component. The refining and processing of the lithium in Australia used to take place elsewhere. China is in a league of its own. About 40 percent of the 93,000 metric tons of rawlithium mined globally in the year 2021, was gobbled up by the superpower. There are hundreds of gigafactories across the country that make EV batteries for both the domestic and foreign markets.

According to estimates, China could have as much as 80% of the market for batteries. One of the largest EV battery producers is based in China and makes three out of every ten EV batteries. The dominance goes all the way through the supply chain Chinese companies have benefited from huge government investment in the process of mining and manufacturing. The rest of the world is worried, and the United States and Europe are trying to wean themselves off Chineselithium before it's too late.

An electric car battery can hold up to 60 kilowatts of power. By 2034, the US alone will need half a million metric tons of unrefined lithium for EV production. The global supply in 2020 is less than that. There is fear that a repeat of the oil crisis sparked by Russia's invasion of Ukraine could happen. China might shut off its supply of batteries just as Western automakers need them to power the switch to EV.

Andrew Barron, a professor of low carbon energy and the environment, says that if China sticks with the home market, the cost of batteries will go up outside of China. Efforts to expand battery production capacity are more important than ever.

Efforts are taking shape. There will be 13 new gigafactories in the US and 35 in Europe by the year 2025. With many projects beingset by logistical problems, protests, and NIMBYism, that is a big if.