Some more data points on Lithium, this time focused on what China is doing
- Global lithium prices have decreased by over 50% in the first half of 2023.
- Chinese companies are investing heavily in domestic lithium sources to secure access to the metal for the energy transition.
- An auction for the Jiada Lithium Mine in China’s Sichuan province closed at about $580 million, 1,300 times its starting price.
- The auction for the Lijiagoubei Lithium Mine also closed at over 1,700 times the opening bid.
- China’s lithium-battery exports reached $26.7 billion in the first five months of 2023, a 66% increase from the previous year.
- Chinese companies are bidding intensely due to expectations of growing lithium battery demand.
- Geopolitical concerns drive bidding, as access to lithium reserves outside China may face pressure.
- Global lithium demand is forecasted to reach 1.5 million metric tons in 2028, up from 900,000 tons in the current year.
- China refines about 55% of the world’s lithium and has around 12% of the world’s lithium supply from domestic mines.
- China’s Ministry of Natural Resources plans to boost efforts to develop domestic mineral reserves.
- Economic transformation in lithium development due to rising demand for electric vehicles and energy storage.
- China’s domestic lithium rush could lead to a bust due to financing challenges and a lack of industry experience.
- Environmental concerns are significant, as soil degradation and water pollution could limit production growth.
- Beijing is addressing environmental impact through inspections and crackdowns on illegal mining and pollution.
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