CHINA’S efforts to ramp up lithium extraction could see it accounting for nearly a third of the world’s supply by the middle of the decade, according to UBS AG.

The bank expects Chinese-controlled mines, including projects in Africa, to raise output to 705,000 tons by 2025, from 194,000 tons in 2022.

That would lift China’s share of the mineral critical to electric vehicle batteries to 32% of global supply, from 24% last year, according to UBS.

China is the world’s biggest producer of new energy vehicles, but the country holds only a modest slice of global reserves of lithium.

The race to secure lithium is playing out at the highest levels, with nations, including the United States, prioritizing access to the materials necessary for making batteries as the world turns away from fossil fuels.

China’s needs are particularly acute because it’s home to the world’s biggest market for new energy vehicles.

The rise in Chinese output will include an increase in material derived from lepidolite, a lithium-bearing rock often overlooked as poor quality and environmentally unsound because of its low yield and high energy costs.

About a fifth of China’s lithium output was derived from lepidolite in 2021, according to an academic study published by the journal China Geology.

UBS sees lepidolite in China accounting for 280,000 tons of lithium in 2025, or 13% of global supply, from 88,000 tons last year, as the government continues to support the sector.

China has already moved to curb unlicensed lepidolite extraction in Jiangxi Province, a major mining hub.

Lithium prices hit an all-time high last year as booming demand for electric vehicles outstripped production.

Despite a drop of more than 40% from its November peak, lithium carbonate, a refined version of the metal, is still eight times more expensive in China than it was in 2020.

(SD-Agencies)