With new gigantic lithium reserves, China dominates the entire battery production chain, surpassing the restrictions imposed by the US.

The recent discovery of a new lithium reserve in China, announced by the country’s geological service, can raise Chinese participation in global reserves from 6% to 16.5%. With estimates between 6.5 and 30 million tons, China would become the second largest lithium holder. However, Bolivia is still leading the ranking with 23 million tons, followed by Argentina (22 million) and Chile (11 million), according to the United States Geological Survey (2024). These numbers may vary as new discoveries are made and estimated methodologies are improved.

ANA CAROLINA RUSSO, POLY-USP

To understand the impact of this discovery and the role of Brazil in the sector, the Red portal Interviewed Professor Ana Carolina Russo, from the Department of Engineering of Mines and Petroleum at the Polytechnic School of the University of SĆ£o Paulo (USP).

The discovery reinforces the importance of lithium as a strategic resource in the energy transition, especially for the production of electric vehicle batteries and renewable energy storage. Can lithium replace oil as the main source of natural wealth?

ā€œLithium has often been compared to oil because of its importance in energy transition. But its exploitation depends on factors such as economic viability, infrastructure and regulatory policies, ā€explains Professor Ana Carolina.

Also read: China becomes the second largest lithium reserve holder in the world

South America: the ā€œLithium Triangleā€

South America, especially the region known as ā€œLithium Triangleā€ (Argentina, Bolivia and Chile), concentrates most global reserves. However, production is dominated by countries such as Australia and China, which have more industrialized and efficient operations. ā€œDespite the large reserves, South America still faces challenges to add value to the production chain, such as refining and battery manufacturing,ā€ says the expert.

The teacher points out that, unlike oil, whose exploration is controlled by OPEC, the lithium market is more fragmented and depends on technological advances and investments in infrastructure.

Alternatives to lithium and technological challenges

The growing demand for lithium, a rare ore, has driven the search for alternatives, such as sodium-ion batteries, which use a more abundant and cheap element. Chinese companies, such as CATL, have already started commercial production of these batteries, but their energy density is still lower than lithium batteries, limiting their use in long autonomy electric vehicles.

Other development options include solid state batteries, safer and more efficient but still expensive, and magnesium, zinc and sulfur -based batteries, which face technical challenges to achieve commercial viability. ā€œTechnological innovation will be crucial to reducing lithium dependence and minimizing the environmental impacts of mining,ā€ says Russo.

China x USA: Who is in front of the lithium race?

China currently dominates the lithium production chain, refining approximately 60% of world ore and leading battery manufacturing. Companies like Ganfeng Lithium and Catl control much of global extraction and processing. By 2023, the country refined about 60% of the worldwide lithium, while the United States, although they are investing in the restructuring of its production chain, still depend strongly on imports.

ā€œThis dispute reflects the strategic importance of lithium in the global economy. Countries that can master production and technology will be in a leadership position in the future, ā€says the teacher.

According to consultancy Rystad Energy, China will continue to master the global production of lithium -ion batteries this year, as manufacturers will circumvent higher tariffs by transferring their foundations to other countries. Chen Shan, the Norwegian consultancy market analyst, says the US and European decision to impose higher tariffs on Chinese electric cars will lead to more Chinese electric vehicle manufacturers and batteries to consider establishing factories abroad to reduce costs and increase The competitiveness.

Opportunities for Brazil

Brazil has significant lithium reserves, estimated at 730,000 tons, concentrated mainly in the Jequitinhonha Valley, in Minas Gerais. Recently, the government has flexed the standards for ore export, which can position the country as a relevant exporter. However, Ana Carolina points out that the greatest economic potential is in adding value to the production chain.

“Brazil needs to invest in technological infrastructure and establish strategic partnerships with China, USA and Europe to refine the lithium and manufacture batteries in their own country, rather than just exporting the raw material,” he explains. The expert also emphasizes the importance of public policies that encourage sustainability and battery recycling, reducing the environmental impacts of mining.

Environmental and future impacts of the market

Lithium mining consumes large amounts of water and affects sensitive ecosystems, especially in desert regions such as Chile and Argentina. In addition, battery recycling has gained prominence as a way to reduce mining dependence and minimize environmental impacts.

ā€œThe future of the lithium market will depend on the capacity for technological innovation, the sustainability of mineral extraction and the development of national productive chains,ā€ she concludes. “The countries that can dominate and balance these aspects will be at the forefront and better positioned in the global economy of the future,” he concludes.

The information cited by the teacher was based on data from China’s Geological Service, United States Geological Survey, National Agency for Mining and Reports of the International Energy Agency and Bloombergnef. The analysis included references to academic studies and technical reports on battery technologies and environmental impacts of lithium mining.

Source: vermelho.org.br



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