Since the beginning of the new energy vehicle industry, the competition for lithium mines, one of the core resources of electric vehicle batteries, has intensified. Countries rich in lithium resources are also taking action.
Chile, Argentina and Bolivia, known as the "lithium triangle", are all countries rich in lithium resources. They are nationalizing lithium mines or have already done so. The U.S. Geological Survey estimates that these countries account for 56 percent of the world's lithium reserves.
Lithium is found in brine, which is evaporated and extracted, Chile's climate has the best conditions for evaporating brine. Chile, in particular, has even come up with its own standards for lithium production. There is strong sunlight all year round, the height is also suitable, the hot air is stable, and the production efficiency is high.
Illustration: Lithium-ion battery structure
In this context, three countries tried to control production on the grounds of resource security and environmental protection. Chinese electric vehicle company BYD won a lithium mining contract with the Chilean government in early 2022, but finally ran into trouble after the Chilean Supreme Court ruled that the contract was invalid in June 2022.
The lithium used in electric vehicle batteries must reach a high purity of more than 99.5%. Usually an electric car needs 30~60kg of lithium. Within the battery, lithium moves from the positive electrode to the negative electrode, storing electrical energy, and moving from the negative electrode to the positive electrode, generating electrical energy.
In addition, Chilean President Gabriel Boric who was elected in December 2021 has criticized the privatization of lithium mines as a mistake in the past after his regime came to power. After that, with the announcement of plans to form a state-owned lithium company, the shortage of lithium resources, an important factor for electric vehicle batteries, will be further intensified. In addition, Bolivia has completed the nationalization of lithium in 2008. Argentina has stopped mining rights for private enterprises.
But unlike this concern, lithium prices have fallen by nearly 30% in the last 3 months. Because with the abolition of China's electric vehicle subsidy policy, the demand for electric vehicles is declining, but the supply is smooth. Industry experts analyzed: "Lithium demand will continue to grow. At some point, lithium prices will stabilize upwards again. ”
Japan, South Korea these resources are poor, but there are battery industry countries, lithium demand is all dependent on imports. So far, South Korea's battery supply chain is still competitive in terms of market share, technical capabilities, production and quality, but materials and raw materials are less competitive. In particular, many of the things needed to produce cathodes depend on China.
The International Energy Agency estimates that total lithium demand will surge more than 40 times in 2040 compared to today. In order to stabilize the supply of lithium and strengthen competitiveness, Korean battery companies are cooperating with foreign companies or directly developing lithium.