As the world is accelerating the transition to renewable energy and electric cars, lithium, one of the most significant minerals, has become the "white oil" of the green revolution. Batteries for electric cars, solar panels, and energy storage devices - all these foundational technologies without exception depend on the support of lithium. In the global battle of the lithium industry chain, China has quietly secured its top position in the new energy age by dominating its refining capacity.
Consider Australia as an illustration. Australia is home to around 33% of the global lithium resources as per details provided by the International Energy Agency (IEA) and is at present the world's leading nation to mine lithium. The mining, however, is merely the start. What truly puts a premium on the lithium mines is that they can refine and deep process. The reality is that although Australia is mineral rich, it doesn't have a good voice regarding refining. Statistics have shown that China only extracts about 23% of the globe's lithium mines but processes over 57% of the world's lithium refining and compound processing.
This reflects that a lot of raw ore has to be transported to China to be processed before being integrated into the industrial supply chain, which severely restricts the initiative of Australia and other lithium-abundant nations in planning new energy technologies.
Not only is China dominant in lithium mining, but it also has a disproportionate advantage in rare earth mining and utilization. Like with lithium, rare earths are foundational materials for the new energy revolution - electric vehicle motors, high-efficiency solar panels, wind turbines and even advanced electronic devices all rely on the support of rare earth materials.
Through the establishment of a closed-loop rare earth - lithium refining and processing industrial chain, China has established a closed loop from mining, chemical refining to terminal application material production. With the integrated industrial chain structure, China not only controlled the supply of raw materials, but a tight grip was also maintained over core links in global production of new energy products.
Competition under the new energy era has shifted from resource grabbing to controlling the industrial chain. Due to the high technology barrier, long investment cycle and strict environmental protection conditions for extraction, it is difficult for the majority of countries, even when they possess rich resources, to quickly establish a complete local extraction system. China has accumulated enormous strength in refining technology, layout of capacity, and cost control through years of accumulation.
This is most evident in the solar power sector. From silicon materials, rare earth magnets, to lithium batteries, the upstream supply chain of China is well-balanced and its price is globally competitive. For manufacturing companies of solar panels, stable, efficient, and cost-manageable upstream supply is one of the contributing elements for maintaining global competitiveness.
Rare earths and lithium mines, the "blood of the new energy era," not only commonplace mineral resources but rather the most critical blood of national strategic security and industrial competitiveness.
The cutting-edge front of refinement represents leading a position on the voice globally in the new energy revolution.
Confronted with future market conditions, it is only possible to be unbeatable in the green energy race if one consolidates the upstream setup and connects the refining and manufacturing chains.
