A scientific breakthrough in the extraction process of lithium has made it considerably cheaper to mine the much sought-after metal, according to a Chinese government report. The South China Morning Post was first to report on this document.

The Chinese Academy of Sciences played a key role in deciphering the new process, as a fifteen-year-old project of the academy finally succeeded in establishing a cost-effective method for mining lithium a few years ago.

The state-owned company Qinghai Lithium Industry, which has a curious profit margin of over fifty percent in the past three years, is reportedly making use of the new method. The total revenues of the company run in excess of $436 million, reveals the document.

The implications of this development go beyond the lithium and electric car industries. With the United States involved in an ongoing trade dispute with China, some officials in Washington believe that if Beijing can come to dominate lithium mining, it could prove to be a major blow to U.S. ambitions in future trade negotiations with China.

Why Is Lithium So Important?

Lithium is a critical raw material for the manufacture of batteries used to power many electronic devices, including electric vehicles. Other metals like copper, nickel, and cobalt can also be used to make batteries, but geopolitical, security and other risks limit their appeal to global supply chains.


According to an estimate by the South China Morning Post, more than one-third of the cost of an electric vehicle is spent on the manufacturing of the battery. If Chinese companies bring down that cost, they could gain a significant edge over competitors in the West in the making of electric vehicles.

The explosion in the demand for electric cars in recent years has also resulted in a shortage of metals used to make batteries. Amid this development, the Chinese have steadily increased the domestic production of lithium, while investing heavily in lithium mining in Argentina, Australia, and Chile.

Although China boasts large lithium reserves, the country does not mine much of the metal because of the difficulty of exploitation. The salt lakes on the Tibetan plateau—the main region where China’s lithium reserves are located—are cold, desolate places.

However, China consumes more lithium than any other country. As the Chinese look to control lithium mining with an aggressive investment strategy, they also buy most of the current output, prompting suspicions of domestic hoarding.

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How Did China Master Lithium Extraction?

Lithium is mined from salt lakes around the world, but an important factor in the process is the extraction of lithium from the other elements present in the mixture, especially the metal magnesium, which has similar chemical properties.

According to the South China Morning Post, the new separation technology used by Qinghai Lithium Industry utilizes multiple processing stages with complex electronic and membrane filtering mechanisms to filter the metal out from other elements.

This dramatically reduces the production cost to around $2000 per ton from the $12,000 to $20,000 per ton currently being sold in the international market. Although the Chinese do not produce much lithium, the country accounts for more than two-thirds of the lithium-powered batteries worldwide. Seven of the world’s top ten electric vehicle battery manufacturers are Chinese companies.

The reliance on the raw material from a foreign country to produce a good made by domestic manufacturers and imported globally might just have been what drove the Chinese researchers to find a solution to the lithium extraction problem.

Since the Chinese overwhelmingly outnumber other countries in terms of domestic sales of electric vehicles, and with growth estimates in the coming years off the charts, the Chinese could also have been driven by domestic pressure to solidify the lithium supply chain.

If the Chinese are able to boost domestic extraction of lithium while controlling global output, Beijing’s domination of the electric vehicle market in the coming years may be a foregone conclusion. In the more immediate term, it could strengthen China’s hand in trade talks with the United States.

Usman Kabir covered science, space, and technology for Globely News. As a kid, he would make models of the solar system and take part in water rocket competitions. His childhood obsession has led him to a degree in Space Science. Usman likes to spend his free time watching reruns of "Curb Your Enthusiasm" and "Seinfeld."


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