As Race for EV Materials Heats Up, China Secures Even More Lithium Supply

lithium supply
Published on: Jul 14, 2022
Author: Philip Tai

As many investors have learned in recent months, lithium, an essential component in the manufacture of batteries for electric vehicles, has faced a surge in its market price.  While many EV battery manufacturers favored nickel-manganese-cobalt (NMC) batteries in the past, lithium iron phosphate (LFP) batteries are gaining popularity.  The rising price of lithium is already affecting the price of electric vehicles with Tesla significantly increasing its prices by as much as $6,000 this month.

Lithium, now, is a strategic resource that large companies and even governments are scrambling to gain control of.  We recently saw companies like Ford and Tesla begin securing agreements for lithium supply directly with mining companies, but in the past few days, China has made a number of major deals to secure the valuable metal from sources around the world.

Ganfeng Lithium Announces Purchase of Argentina-focused Lithea for $962 million

China’s biggest lithium producer, Ganfeng Lithium Co Ltd, said on Monday it plans to buy Argentina-focused Lithea Inc for up to $962 million as it seeks to secure access to more materials for EV batteries.  Privately owned Lithea owns rights to two lithium salt lakes in Argentina’s mineral-rich Salta province.

In its statement to the stock exchange, Ganfeng said that the deal would strengthen “the layout of its upstream lithium resources” and its resource self-sufficiency.

Argentina, part of the so-called “lithium triangle”, has been trying to attract more investors with new mining infrastructure and tax cuts. Lithea is owned by LSC Lithium BV, which is in turn owned by Pluspetrol Resource Corp, an oil and gas mining firm.

Zimbabwe Provides Another Source of Lithium to China

A major mining company in Zimbabwe has agreed to start shipping a lithium-containing spodumene concentrate from its facilities to China next year.

Global demand for lithium has prompted an increase in production at mines in Zimbabwe, home to large deposits of the element. Zulu lithium mines is a subsidiary of Premier African Minerals. The company’s chief executive, George Roach, told the Reuters news agency on Monday that the firm selected Suzhou TA&A Ultra Clean Technology Co. from a number of Chinese, European, and Australian investors. 

“At one point, I was involved with 11 separate negotiations with people all wanting Zulu,” Roach said. “It was a very intense period.”

Suzhou has agreed to invest $35 million (€34.71 million) in the construction of a pilot plant at the Zulu mine, which will help the facility produce up to 50,000 tonnes of lithium-containing rocks annually. This new investment sets the company on the path to achieving vertical integration of the lithium supply chain. 

As the Race to Secure Lithium Heats Up, Look Towards Safe Jurisdictions

As EV and battery manufacturing companies move to secure lithium supply, investors should pay attention to all the safe jurisdictions that contain the resource.  Western countries like Canada, the US, Finland, and Sweden all have lithium resources.

United Lithium Corporation (CSE: ULTH, OTC: ULTHF, FWB: 0ULA) is an exploration & development company energized by the global demand for lithium. The company is actively working on prospective locations in Sweden, the USA, Finland, and Canada’s lithium sector where regional deposits and mining operations along with advanced infrastructure allow for rapid and cost-effective exploration, development & production opportunities.

Learn more about United Lithium here.

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