Los Angeles, CA, Nov. 04, 2023 (GLOBE NEWSWIRE) — The global lithium market is unlikely to experience significant shifts shortly due to a widely argued possibility to introduce Afghanistan’s undiscovered resource base, a new report published by market research firm IndexBox states. However, China may first emerge as a potential investor in Afghanistan’s mineral sector.
China is the world second-largest importer of lithium carbonate but dominates globally in lithium oxide and hydroxide exports. In 2020, China’s market share accounted for 74% of world exports, estimated at 77K tonnes. Korea and Japan are the leading importers of Chinese lithium. Lithium production in China grew from 10.8K tonnes of lithium content in 2019 to 14K tonnes in 2020. According to USGS estimates, China stands in fourth place globally for lithium reserves (1.5M tonnes of lithium content), behind Chile (9.2M tonnes), Australia (4.7M tonnes) and Argentina (1.9 M tonnes).
The rapidly developing electric car and electronics industries in China will require enlarging their resource reserves to meet production needs. Alternative methods to increase their mineral reserves could include expanding domestic excavation, building mining facilities abroad or expanding lithium imports.
Recently in China, there have been discussions about creating a mining facility in Afghanistan for rare earth metals to provide one means of expanding their resource reserves. Implementation of such a project in the near future is highly unlikely, mostly due to the difficult military and political situation in the country. Mes Aynak in Afghanistan, one of the world’s largest copper deposits, serves as a precedent, where China invested in mining operations. In 2008, the Chinese Company MCC-JCL Aynak Minerals (MJAM) received a permit to rent and develop the ore, but they haven’t begun to extract nor smelt the ore so far. Currently, the project remains within an exploration phase. The main reasons for the facility’s stalled construction are threats of armed conflict in Afghanistan and a shortage of necessary resources such as coal and phosphate.
There are no reliable sources of data about Afghanistan’s lithium deposits. According to estimates from the Afghanistan Ministry of Mines and Petroleum, there are 1.4M metric tonnes of rare earth elements in the country. There is no open-source information detailing whether those minerals are accessible for extraction or whether they are contaminated by radioactive elements. At the moment, there are no active mining operations for lithium in Afghanistan. The mining industry is significantly under-developed there, and due to a low GDP, the only method to stimulate growth is to attract foreign investments, which is hardly feasible until new Afghanistan’s authorities are internationally recognized, and the political situation in the country stabilize.
Currently, the Belt and Road Initiative should enable China to strengthen its leading position in the global lithium export market. The initiative’s main goal is to construct a large unified market among countries in Asia Pacific, Africa as well as Central and Eastern Europe. It should help China increase exports of lithium as well as increase imports of crude ores when necessary. Within the Belt and Road Initiative, China has invested in transport and logistics infrastructure in Sri Lanka, Pakistan, Bangladesh, Nepal and Afghanistan.
China’s Lithium Carbonate Imports
Lithium carbonate imports into China reached 50K last year. In value terms, they also expanded sharply by +8.5% to $261M in 2020.
Chile (37K tonnes) constituted the largest lithium carbonate supplier to China, with a 74% share of total imports in 2020. Moreover, lithium carbonate imports from Chile exceeded the figures recorded by the second-largest supplier, Argentina (13K tonnes), threefold.
China’s Lithium Oxide and Hydroxide Exports
Lithium oxide and hydroxide exports from China skyrocketed to 57K tonnes in 2020, picking up by +16% against the previous year. In value terms, lithium oxide and hydroxide exports declined slightly to $688M, IndexBox estimates.
South Korea (29K tonnes) and Japan (26K tonnes) were the main destinations of lithium oxide and hydroxide exports from China. In 2020, the most notable growth rate regarding the volume of shipments, amongst the main countries of destination, was attained by South Korea (+68% y-o-y). In value terms, South Korea ($357M) and Japan ($313M) constituted the largest markets for lithium oxide and hydroxide exported from China worldwide.
About IndexBox
IndexBox is a market research firm developing an AI-driven market intelligence platform that helps business analysts find actionable insights and make data-driven decisions. The platform provides data on consumption, production, trade, and prices for more than 10K+ different products across 200 countries.
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Companies Mentioned in the Report
Sichuan Tianqi Lithium, Albemarle Corp., Sociedad Química y Minera de Chile S.A., Orocobre Ltd., Talison Lithium Pty Ltd., Galaxy Resources Ltd., Mineral Resources Ltd., Nemaska Lithium Inc., Lithium Americas Corp., Rincon Ltd., Contemporary Amperex Technology Limited (CATL), LG Chem, Samsung SDI Co., Ltd., Panasonic, Livent, Ganfeng Lithium, Tesla Motors, Inc., BAIC Motor Co., Bavarian Motor Works AG (BMW), BYD Co., Daimler AG (Mercedes-Benz), Ford Motor Co., General Motors Co., Jaguar Land Rover Automotive PLC, Mitsubishi Motors, Nissan Motor Co., Volkswagen Group, Toyota.
Sources
China – Lithium Carbonate – Market Analysis, Forecast, Size, Trends and Insights
China – Lithium Oxide – Market Analysis, Forecast, Size, Trends and Insights
World – Electric Accumulators – Market Analysis, Forecast, Size, Trends and Insights
World – Primary Cells and Primary Batteries – Market Analysis, Forecast, Size, Trends and Insights
