Zhou Yanjing, Che Chao, Ma Lin, CCID
China is the largest lithium consumer in the world, and the demand is largely covered by imported goods because of extremely short domestic supply, despite abundant lithium resources in China. Therefore, accelerating the development and utilization of domestic lithium resources has become an inevitable trend. Measures have been taken in droves to accelerate the development progress and increase the domestic self-supply rate of lithium, allowing the safe and stable domestic new energy supply chain as well as the target of Peaking Carbon Dioxide Emissions and Carbon Neutrality to progress unimpeded.
Supply of lithium resources in China is becoming increasingly tighter
1. The import dependence of lithium has remained high for a long time, mostly from several countries
China is the largest lithium consumer globally, accounting for about 70% of the global lithium consumption. However, domestic lithium resources are far from utilized and developed and have been dependent on imports for a long time. The cumulative mining volume of domestic lithium ore was 41 500 tons (calculated as metal volume) from 2010 to 2020, accounting for only 2.8% of the recoverable reserves of domestic lithium resources, and the average import dependence rate of lithium in the past decade reached 67%. The lithium carbonate consumption in China was 263 700 tons in 2021, of which, 190 000 tons were imported, with the import dependence rate as high as 72%. The import volumes were mainly stemmed from Australian spodumene and South American salt lake resources.
2. Major producing countries are tightening their lithium development policies, making import more risky
Countries are increasingly intending to set thresholds for lithium mining, given higher strategic value of lithium. The "Lithium triangle" countries (Bolivia, Chile and Argentina, with their lithium reserves accounting for 58% of the global total) are discussing the possibility of establishing a lithium-version "OPEC", aiming to broadly nationalize lithium mines so as to transform from an exporter of lithium resources to a manufacturer of lithium products. At the same time, Australia has restricted Chinese enterprises from acquiring local minerals through Foreign Investment Review Board. These policies will further concentrate global lithium supplying channels. For Chinese lithium industry that has long relied on lithium mines in Western Australia and salt lake resources in South America, it will be riskier to import the resources.
Window period for the development and utilization of domestic lithium resources
1. Domestic lithium resources rank 4th in the world, reflecting a great potential for development and utilization
According to statistics, China's lithium reserves were 1.5 million tons in the end of 2021, ranking fourth in the world. There has been big progress in the prospecting and exploration of domestic lithium ore in recent years, with a total of 2 million tons of lithium oxide resources detected in Dahongliu Breach, Xinjiang, 4.5 million tons of lithium oxide resources in Sichuan Jiajika, and about 1.0125 million tons of lithium oxide resources conservatively estimated in a new ultra-big lithium mine in Qiongjiagang, Himalaya. Accordingly, domestic lithium resources have great potential for development and utilization in the future.
2. Demand and price arouse an domestic investment heat
The demand for lithium keeps rising in line with fast-growing new energy vehicles market. From 2010 to 2020, the average annual growth rate of China's lithium consumption reached as high as 20.4%. Prices of lithium products are soaring. According to Baiinfo data, the reference price of battery-grade lithium carbonate reached RMB517 000/ton as of April 2, up 484.5% year on year. The elevated prices and robust demand are a strong push for the investments in the development of lithium mines. Domestic enterprises and capital have accelerated their presence in the lithium sector through equity acquisition, bidding for mining rights and other means, with the amount of money involved exceeding RMB40 billion. The influx of both private and state-owned capital will lend strong support to the development and utilization of domestic lithium resources.
3. The cost edge amid continuous technological upgrading has paved the way for capacity expansion
Domestic lithium resources mainly consist of spodumene, lepidolite and salt lake lithium. The technology of lithium extraction from spodumene ore is relatively mature and stable. The technology of lithium extraction from salt lake and mica was a drag for the large-scale development and utilization of domestic lithium resources, but after years of technological iteration and continuous investment, the process routes have been almost mature, among which, some routes to salt lake lithium extraction have been successively developed, such as membrane method, adsorption method, new extraction method and combination method. Many salt lake lithium enterprises such as Tibet National Energy Mining Development Co and Xinghua Lithium Salt have put units into commissioning, and some of the projects have been completed and recognized by authority. Projects such as Qinghai Salt Lake Fozhao Lake Lithium Co and Zanger Holdings have successfully reached design capacity. The extraction of lithium from mica has also achieved a breakthrough in the all-element extraction process, making mica resources high-valued, clean and comprehensively usable. Jiangxi Special Electric Motor Co has been expanding its capacity. The fast-upgrading technologies are leading to lower production cost. At present, the overall cost of domestic lithium carbonate is pegged at RMB20 000-60 000/ton, while the production cost of lithium carbonate fed by imported spodumene concentrate has been close to RMB100 000/ton as the prices of the latter have surged. Thus, the cost advantage of domestic lithium resources is obvious.
4. Multi-supportive policies are giving a boost to the industry
Chinese President Xi Jinping stressed "accelerating the construction of a world-class salt lake industrial base" when the Qinghai delegation deliberated on to the fourth session of the 13th National People's Congress on March 7, 2021. During his inspection in Qinghai in June, he reiterated “actively cultivating emerging industries and accelerating the construction of a world-class salt lake industrial base based on the unique resource natural endowment of the plateau". In February 2022, the Ministry of Industry and Information Technology claimed that it should improve the key resources guarantee ability, strengthen communication and coordination with Qinghai, Sichuan, Jiangxi and other provinces and cities, as well as moderately speed up the development of domestic lithium resources. The government’s supportive policies are tailwinds for domestic producers to ride on to put lithium capacity in effect.
Means and measures to accelerate the development of domestic lithium resources
1. To put ecology in the first place and carry out scientific, reasonable and orderly development
Most of the distribution areas of domestic lithium resources are ecologically fragile, so we must adhere to the principle of "ecology first, protection first, development in protection and protection in development" in the process of resources development, so as to achieve scientific and orderly development. The specific measures are: first, we should make the unified planning for the exploration, development and utilization of domestic lithium resources, comprehensively and scientifically establish and deploy the lithium resource development programs in various regions, and wipe out the waste of lithium resources caused by excessive development; secondly, we should set up stricter access standards for enterprises developing lithium resources, clearly stipulate the requirements of process level, environmental protection, and management level, so as to make sure that enterprises will achieve the protective development and effective utilization of lithium resources in terms of technology, capital and ability. Thirdly, we should establish and improve environmental protection and management systems, strictly stick to the environmental protection requirements of lithium resources development projects, reinforce the environmental impact assessment system of lithium resource development and construction, and keep protecting plateau lake water resources and local ecological environment.
2. To make innovation-driven technology breakthroughs
With innovative development regarded as the endogenous driving force for the high-quality development of domestic lithium resources, we should make effort to achieve breakthroughs in new processes and technologies of lithium resources development, which will drive up the development level of the domestic lithium industry. First, we should gear up the innovation of green lithium extraction technology from salt lakes; adhere to the principle of "one process for one salt lake", that is, to carry out specific improvement and innovation of lithium extraction technology in Qinghai and Tibet; develop new and environmentally friendly lithium extraction membrane materials and extractants; and encourage the development of entirely clean lithium extraction technology. Secondly, we should shore up the innovation of comprehensive recycling technology. Given the complex elements of domestic salt lakes, which are associated with multiple components such as boron, potassium, magnesium, sodium, rubidium, cesium and bromine, we should attach more importance to the research and development of element separation and comprehensive recycling technologies, and study low-cost, high-quality and pollution-free element separation and extraction technology. Thirdly, we should enhance the research and development level of hazardous waste treatment technology; strengthen the research and development of treatment technology of hazardous chemicals that are possibly involved in the lithium extraction process by chemical and physical methods, such as acid and alkali, and carry out reasonable and legal utilization and disposal of these chemicals.
3. To consolidate the foundation and strengthen the infrastructure construction in the mining areas
At present, most lithium mining areas are located remotely, where infrastructures are less developed, significantly hampering the development process of lithium resources. In this regard, first, we should beef up the construction of road transportation, power, communication, network and other infrastructures in major lithium mining areas and enhance the industrial carrying capacity. Secondly, we should make full use of the abundant solar energy, thermal energy and other new energy resources in Tibet and Qinghai, and encourage the construction of integrated power generation projects in mining areas, so as to meet the local energy demand. Thirdly, we should put more investments in the construction of wellbeing facilities in mining areas and surrounding living-supporting areas, community service centers, sports, health, etc., so as to provide supporting services for the production of mining enterprises.
4. To ensure the supply of lithium resources and speed up domestic resource exploration and development of lithium resources
We should strengthen the exploration of domestic lithium resources continuously, have a general picture of the lithium resources so as to ensure the sustainable development of domestic lithium resources. On one hand, we should thoroughly carry out the Action Plan for Domestic Mineral Exploration of Strategic Minerals (2021-2035), systematically and regularly evaluate the potential of domestic lithium resources, increase the general investigation of key metallogenic zones, and seek to continuously discover and explore new resources. On the other hand, we should enhance the exploration of lithium resources in Qinghai, Tibet, Sichuan, and Jiangxi. Restricted by many factors such as technology, climate and talents in Tibet, there are very limited salt lake lithium resources exploited. Therefore, it is necessary to increase the exploration of salt lake lithium resources in Tibet, so as to increase the identification rate of local lithium resources and provide data support for the scientific development of lithium resources.
