China has played well with lithium, and we are slow to react: CEO

This image from March 2021 shows a worker with car batteries at a factory in China.

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According to the CEO American lithium.

Speaking on CNBC’s Squawk Box Europe on Monday, Simon Clark talked about how China has solidified its strong position in the industry.

“I just think the Chinese — I mean, you have to take your hat off, they played a great game,” he said.

“For decades, they have locked up some of the best assets around the world and quietly went about their business, developing knowledge in the field of creating lithium-ion technologies, from soup to nuts,” he added. “And we were very slow to respond to that.”

He added that the U.S. Inflation Reduction Act and a number of other measures mean people are “beginning to realize it.”

Along with its use in cell phones, computers, tablets and a plethora of other gadgets synonymous with modern life, lithium, referred to by some as “white gold”, is critical to the batteries that power electric vehicles.

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China is by far the dominant force in this sector.

In his World Energy Outlook 2022 reportThe International Energy Agency said the country accounts for roughly 60% of the world’s supply of the lithium chemical. China also produces three-quarters of all lithium-ion batteries. according to the IEA.

With lithium demand on the rise, major economies are trying to bolster their own stocks and reduce dependence on other parts of the world, including China.

The stakes are high. In a translation of her September State of the Union address, European Commission President Ursula von der Leyen said that “lithium and rare earths will soon become more important than oil and gas.”

In addition to ensuring the security of supply, von der Leyen also stressed the importance of recycling.

“Today, China controls the global manufacturing industry,” she said. “Nearly 90%… rare earth[s] and 60% of lithium is recycled in China.”

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Given the above, a number of companies in Europe are seeking to develop projects aimed at securing supplies.

Mineral giant headquartered in Paris Imerisfor example, it plans to develop a lithium mining project in the center of France, while the facility, described as the UK’s first large-scale lithium processing plant, will be located in the north of England.

Looking ahead, American Lithium’s Clark predicts continued geopolitical competition in the sector.

“There is a real initiative to win back part of the supply chain from … China,” he said.

“I think that China is in such a dominant position that it will be very difficult to do this. But… I think you are starting to see how this approach is being implemented.”

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