China’s reliance on foreign battery metals poses a challenge – industry

DEZHOU, China (Reuters) – China needs to boost its domestic resources of battery metals, including nickel, lithium and cobalt, as its dependence on external supplies poses a risk to its electric vehicle industry , a metals industry official said on Friday.

China depends on foreign sources for 93% of its nickel, 98% of its cobalt and 65% of its lithium, said Hu Changping, deputy secretary general of the China Nonferrous Metals Industry Association.

“The self-sufficiency rate of nickel, cobalt, lithium and other mineral resources is relatively low,” Hu said at the Antaike China Battery Metal Conference in Dezhou City, Shandong Province. .

All three metals are essential raw materials for making lithium-iron batteries, a popular choice for the burgeoning electric vehicle industry around the world.

Hu’s remarks were in line with draft rules issued Thursday by China’s Ministry of Industry to improve the country’s supply of lithium, nickel and cobalt.

The ministry said China will also accelerate research and development of new types of batteries, including sodium-iron batteries and hydrogen energy storage batteries, in a bid to reduce its reliance on lithium-iron batteries.

China’s output of key cathode battery materials almost doubled in 2021, but domestic supply of raw battery materials – nickel metal, cobalt metal and lithium carbonate – only increased by 10%, 15% and 53% respectively, Hu said.

“New energy materials such as nickel, cobalt and lithium have shown vigorous developments. The downward pressure on the real economy is increasing, but the new energy industry is going against the grain,” said Mr. .Hu.

China should strengthen domestic resource exploration and recycling, as well as optimize overseas sourcing, he said, adding that the industry faces challenges.

“Resource nationalism and trade protectionism are on the rise…Europe and the United States have underlined their intention to build a closed-loop supply chain for new energy vehicles, to reduce their dependence on lithium Asia-Pacific,” Hu added.

He also said soaring prices, particularly of lithium, had driven up costs and encouraged irrational expansion and acquisitions in the industry.