China has announced a significant lithium discovery in the eastern Tibet region of Kham, now part of Yajiang county in Sichuan province. This discovery is seen as a major boost to China‘s burgeoning new-energy sector, which is critical for the country’s economic growth.
The Strategic Importance of the Discovery
The discovery, estimated to be about 1 million tonnes of lithium, commonly referred to as “the new oil” or “white gold,” is a strategic development for China. According to a report by scmp.com, China is intensifying efforts to explore domestic resources to increase energy and resource security amid a global race for essential resources for economic growth.
Lithium’s Role in China’s EV Battery Industry
Lithium is a vital component in lithium batteries, crucial for electric vehicles (EVs) that are gaining popularity worldwide. The US Geological Survey ranks China sixth in the world for identified lithium resources. However, China heavily depends on the overseas market for lithium, despite refining about half of the world’s supply.
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China’s EV Industry and Economic Shift
China produces approximately 70% of the world’s electric vehicle batteries and is focusing on developing its EV industry. In 2023, China‘s exports of lithium batteries, solar batteries, and new-energy vehicles exceeded 1 trillion yuan (US$139 billion) for the first time, signaling a shift from traditional sectors to new-energy industries.
The Geopolitical Context
The Yajiang discovery, called a “major breakthrough” by China‘s minister of natural resources, adds to China’s existing lithium sources in Sichuan, Qinghai, Tibet, Xinjiang, and Jiangxi. Furthermore, China plans to increase cooperation with countries rich in lithium resources, such as those in the “lithium triangle” – Argentina, Bolivia, and Chile.
Challenges in Lithium Exploration
Despite the discovery’s potential, lithium projects are considered “highly risky,” with significant delays possible between resource discovery and commercial viability. Experts highlight the strategic importance of securing critical minerals, with this discovery cementing China‘s position in the global lithium supply chain, impacting batteries and electric vehicle production.
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