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As the global race for “new oil” heats up, China’s electric vehicle battery king asks Beijing to expedite lithium mining

The chairman of China’s largest electric vehicle (EV) battery producer, Zeng Yuqun, has proposed that the Chinese government expedite “search and development” of lithium reserve in the nation assure supply chain security despite a broader scarcity of the rare earth metal as more people switch to EVs.

In his position as a delegate of the CPPCC (Chinese People’s Political Consultative Conference), Zeng, the chairperson of CATL (Contemporary Amperex Technology Limited), mentioned lithium advancement as one of his ideas made to authorities.

Lithium, a critical metal in the batteries which power electric vehicles, must be incorporated in China’s overall “national security” planning, he said.

China is facing a grim supply and demand scenario for lithium, as per a summary of his ideas provided by CATL, and the nation must work harder to secure supply chain security.

“Lithium resources are the basic raw materials of the lithium batteries, and understanding and ensuring the supply of primary goods for these batteries is of strategic importance,” stated Zeng.

Thanks to Beijing’s backing of a local EV industry, CATL is presently the world’s leading supplier of EV batteries. CATL also supplies batteries to Tesla, the American tech behemoth, in China.

As major economies adopt a broad move to EVs as part of an attempt to tackle climate change, the global rivalry for lithium, also known as “the new oil” and “white gold,” is expected to heat up.

If the world meets its climate targets, worldwide demand for lithium is expected to climb by more than 4,000 percent by 2040, according to estimates from the International Energy Agency.

Lithium prices have risen in China, with the spot price last month reaching over 2 million yuan ($316,000) a tonne, more than 4 times the cost a year ago.

The United States, which wants electric vehicles to account for half of all trucks and cars sold in the United States by 2030, has emphasized the importance of metal in its efforts to reduce reliance on China.

China’s dominance in lithium refining, according to Washington, “presents a key risk to the survival of the US domestic auto sector.”

According to the United States Geological Survey’s 2022 Mineral Commodity Summary, China modifies two-thirds of the globe’s lithium and is the largest buyer as well as an investor in lithium mines all over the world, particularly Latin America and Australia, which contain 64% of the globe’s known lithium reserves.

Last month, China revealed that it had found a massive lithium resource near Mount Everest.

An international team of scientists from the Chinese Academy of Sciences’ (CAS) Institute of Geology and Geophysics estimates that the ore deposit could contain up to 1.0125 million tonnes of the lithium oxide.

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