Then partial nationalisation of a vast lithium project in Chile is the latest move by developed and developing countries to prevent China from locking up the mineral supply critical to its dominance of the world’s battery industry.
China’s Tianqi Lithium spent $US4.1 billion to gain a strategic foothold in Chile’s lithium sector in 2018 – part of a wave of Chinese investment in the past decade and a half aimed at securing supply of the mineral critical to its dominance of the world’s battery industry.
The new joint venture will complete SQM’s contracts with Chile’s government mining agency Corfo through to 2030, but will then get an extension of the concession until 2060, along with a significant increase in the production quota within the contracts.Tianqi, which may have hoped to eventually gain control of SQM when it originally acquired its shareholding, is understandably displeased by the events.
The strategy, backed by an estimated $US100 billion or so of subsidies, rebates and tax concessions, has succeeded. Other Chinese companies have been active here, but they have also been acquiring stakes in mines in Latin America and Africa.The impact of the pandemic on global supply chains highlighted the world’s dependence on China for a lot of products, not the least of which was critical minerals and metals at a time when geopolitical tensions between China and the US were rising rapidly.
Indonesia famously emerged as the world’s largest nickel producer after it banned exports of the raw material, forcing mainly Chinese companies to process the metal within Indonesia.
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