The lithium race in North America is heating up. All thanks to dozens of Gigafactories in progress and in plan. The country that controls the global refined lithium supply will be the superpower of the 21st century.
The World’s Second Biggest Producer Of Lithium, Chile, Shocks The Market As President Boric Unveils A Strategy To Nationalize The Entire Lithium Industry 🚨
Lithium demand is expected to 5x increase in lithium demand by 2030 – it is a key component of lithium-ion batteries that are used in electric vehicles.
Although it’s abundant as a resource, it’s about investing in the right projects and quickly.
Chilean President Gabriel Boric said “Future lithium contracts would only be issued as public-private partnerships with state control” and the strategy was to “to boost its economy and protect its environment.”.
But the overwhelming takeaway here for me is the continuation of an accelerated scramble for key commodities and nationalisation of key industries related to the energy transition.
The energy transition will require significant amounts of key commodities such as copper, nickel, cobalt and lithium for success.
Who controls these resources and refining right now?
China dominates the global supply chain for others critical minerals like graphite, cobalt and nickel, 85-90% of materials that go into a battery are coming from China.
For lithium specifically: Chile, Australia, Argentina dominate the lithium reserves – 54% comes from the lithium ‘triangle’.
Chile’s nationalisation follows Mexico nationalising its lithium deposits last year, and Indonesia banning exports of nickel ore in 2020.
All significant developments that we will look back on as we approach 2030.
China already has a dominant position and is continuing to make significant investments in Africa and the Middle East to secure resources and key projects.
If the last few years have taught us anything, it’s that central banks and governments can’t print natural resources and that forward-looking policy is critical.
Europeans in particular saw how painful concentrated dependence on oil and natural gas was last year – we need to avoid the same in the future.
Transition.
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