The Geopolitics of Lithium

Mitigating Supply Chain Disruption and Strengthening The Lithium Market

Contents

 1) Introduction

2) Imports

3) Exports

4) Reducing Lithium Supply Chain Disruptions

5) Mitigating General Supply Chain Impacts

6) Concluding Remarks

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Bitesize Edition

• A small number of nations are big players in the lithium trade. China, South Korea, Japan, Chile and Argentina are the largest players.

• In 2022, when Russia invaded Ukraine, we saw sharp price rises in natural gas and wheat, among other commodities. How can we diversify the global lithium trade to reduce the impact of any potential lithium market disruptions?

• Finally, outside of the lithium trade, how can we work to mitigate the impact of supply chain disruptions generally? As the world continues to increase in connectivity, supply chain resilience is of vital importance.

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Introduction

Do countries trade with each other to ensure everyone has enough lithium for their own clean energy transitions? Is there a clear divide between developed and developing world attitudes towards the clean energy transition?

We’ve discussed in the previous pieces how the speed of production of lithium from the ground to a usable state is the biggest problem facing the lithium sector long term. Direct Lithium Extraction could help this, but states wishing to electrify their transport sector either need to possess lithium sources within their country or need access to trade with another country that does. Let’s explore who is in an advantageous position when it comes to lithium trade.

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Imports

Figure 1 - Lithium Carbonate Imports

Figure 2 - Lithium Oxide Imports

We’ll explore imports for both lithium carbonate and lithium oxide. Lithium carbonate is the product produced from brine pools. Lithium hydroxide decomposes at a lower temperature and is more sustainable and long-lasting. It also increases battery performance. However, extracting lithium hydroxide is currently more expensive than lithium carbonate. Either lithium-based compound can be used for batteries.

Of 1.47B of global lithium carbonate imports, China, South Korea, and Japan makeup 74.56% of this ($1.1B).

Of $1.2B of global lithium oxide imports, South Korea and Japan make up 80.4% of imports.

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Exports

Figure 3 - Lithium Carbonate Exports

Figure 4 – Lithium Oxide Exports

The $1.47B of lithium carbonate exports are 63.99% from Chile, 15% from Argentina, and 6.58% from China. Flashing back to the largest lithium mines and producers in the world and this isn’t surprising. These three states possess the largest brine extraction lithium mines in the world.

Of the $1.2B lithium oxide exports, 67.8% leaves China, 10.03% from Chile, 7.81% from the US, and 6.54% from Russia.

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Reducing Lithium Supply Chain Disruptions