China wants to control global lithium production. This for the Asian giant goes far beyond the economic (although its officials say otherwise), since by controlling the mineral reserves its political power and hegemony would be much greater.. And it is that the value of the metal has skyrocketed in the last year, the price in the Chinese market reached 315,000 dollars per ton for the first time.
Recently, Argentine President Alberto Fernández signed his country up for the Belt and Road Initiative during his trip to Beijing. The Argentine president’s announcement generated discomfort in Washington and other Western countries, which promised to cut off all dependence on lithium produced by the Asian giant.
The South American country is located in the South American Lithium Triangle (along with Chila and Bolivia), which contains more than half of the world’s reserves. China, which is the largest buyer and investor in the metal’s mines, needs to control or have influence in the parts of the world where it is mined.
With climate change and the need to transition from fossil fuels to renewable energy, the silvery-white alkali metal is referred to as “the new oil” or “white gold”a essential material used in electric vehicle batteries, reported The South China Morning Post
Beijing assures that the search for lithium outside its country is not based on geopolitical interests but on market demands, the Chinese newspaper reported.
Estimates from the International Energy Agency project that global demand for lithium will increase by more than 4,000% by 2040.
“These trends indicate that the control of the lithium industry could generate great benefits in the future, which is likely to increase the geopolitical dispute between the great powers.“, said to The South China Morning Post Ryan Berg, a fellow at the Washington-based Center for Strategic and International Studies.
“Capacity revolves around key sources like Chile and China, meaning simmering trade tensions between China and the US are coming into play,” Panjiva Research wrote in a Feb. 9 note.
Both Washington and Beijing have lithium at the center of their interests, they know how essential control of the mineral is for their economies. For this reason, Joe Biden ordered a supply chain review arguing that China’s dominance “presents a critical vulnerability to the future of the US domestic auto industry.”
“The high-capacity battery market is arguably one of the most critical to our nation’s interests,” says a White House report.
“China, in particular, has created a distorted supply chain landscape through government or non-market intervention by state-controlled companies.both nationally and in developing economies,” the report adds.
A Chinese government researcher and adviser, who spoke on condition of anonymity to The South China Morning Post said competition for resources like lithium should take place between multinational companies rather than governments.
“I do not like to exaggerate it to the level of national strategic competition“, said. “Although it is inevitable that competition in the market may encounter some political obstacles, in the long run, the supply of energy resources is more of a business and [se basa en] the behavior of the market”, he added.
Given the demand for batteries in China, driven by the automotive industry, companies in the Asian giant need to have a permanent and reliable supply of lithium. And for Beijing, Latin America is the place of interest, since there are the largest reserves of the mineral.
“Lithium is a strategic resource; it certainly has something to do with the relationship between two countries”, Xu Shicheng, a researcher in Latin American studies at the Chinese Academy of Social Sciences, told the Chinese newspaper.
Keep reading:
The rise of electric vehicles requires greater investment in lithium
Argentine researchers develop an innovative lithium battery for electric motorcycles
Controversy in Chile over the sale of lithium that Sebastián Piñera seeks to tender before the end of his term
Chilean Justice rejects an appeal that sought to paralyze the bidding for new lithium contracts
Controversy in Chile over a lithium tender at the end of Piñera’s term
Source-www.infobae.com