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20 Sep China Seeks Adequate Mineral Resources for New Energy Industries
China will need to accelerate the exploration of key mineral resources for its new energy industries to ensure energy security while transiting to cleaner fuel sources, as reported by Caixin on September 17. According to a report from the resource & environment policy research institute under the Development Research Center of the State Council, the nationwide energy demand will grow 20% from the current level to 6bn tons of standard coal equivalent by 2030. Meanwhile, the proportion of electricity in final energy consumption would hit 31.5%, increasing five percentage points compared to 2020 levels. As electrification relies on mineral resources including lithium, nickel, cobalt, platinum, and rare earth, the report suggests that China should increase mineral resource exploration domestically and enhance international collaboration to secure an adequate supply.
Lithium, cobalt, nickel, and copper are key materials for manufacturing batteries, and batteries are fundamental to energy storage facilities and electric cars. However, around 70% of China’s lithium consumption relies on imports. In addition, according to an estimation by Rystad Energy, China controlled 65% of the world’s lithium processing and refining capacity in 2021, but the country’s lithium deposits may only be under 25% of the world’s total lithium reserves. The gap between China’s processing capacity and its scarce lithium resources has prompted enterprises in domestic new energy sectors to look for mineral supplies overseas. On September 16, the Zimbabwean government approved a proposal by a group of Chinese investors to build a USD2.83bn industrial park that processes lithium, platinum, and nickel exploited from the country.