Europe's LithiumQuest obstructed by China and lack of cash
The 'Lithium Triangle' formed by Chile, Argentina and Bolivia are good for almost half of the world's lithium reserves (Luis Robayo)
The ambition of Europe to be a global player in the decarated transport demonstrably depends on the purchasing of lithium abroad, especially in South America.
Even the wider energy security and climate goals of the block can depend on protecting a steady delivery of the most important mineral, used in batteries and other clean energy supply chains.
But Europe has encountered a trio of obstacles: lack of money, double -edged regulations and competition from China, analysts told AFP.
China has a big lead.
It currently produces more than three -quarters of the batteries that are sold worldwide, refined 70 percent of the raw lithium and is the third largest extractor in the world behind Australia and Chile, according to data from 2024 of the Geological Survey of the United States.
To get a foothold, Europe has developed a regulatory framework that emphasizes the preservation of the environment, creating quality jobs and cooperation with local communities.
It has also signed bilateral agreements with around 15 countries, including Chile and Argentina, the world's fifth largest lithium producer.
All too often it does not deliver when it comes to investments, experts say.
“I see a lot of memoranda of understanding, but there is a lack of action,” Julia Poliscanova, director of electric vehicles at the Transport and Environment (T&E) think tank, told AFP.
“More than once, on the day we still signed a mou, the Chinese bought a whole mine in the same country.”
The investment gap is huge: China has spent $ 6 billion on lithium projects abroad from 2020 to 2023, while Europe hardly coughed a billion dollars in the same period, according to data collected by T&E.
– Lagging Investment –
At the same time, the bottleneck in the supply was tightened: last year an increase in global demand for lithium saw by 30 percent, according to a recent report from the International Energy Agency (IEA).
“To protect the range of raw materials, China is actively investing in Mijnen abroad through state -owned companies with political support from the government,” the IEA noted.
According to the report, China's Belt and Road Initiative stimulated $ 21.4 billion in mining outside his coasts in 2024.
In the meantime, Europe is “lagging behind in investment levels in these areas,” said Sebastian Galarza, founder of the Center for Sustainable Mobility in Santiago, Chile.
“The lack of a clear path for developing the European battery and my industry means that the gap will be filled by other actors.”
In Africa, for example, Chinese question propelled Zimbabwe to become the fourth largest lithium producer in the world.
“The Chinese let their money do,” said Theo Acheampong, an analyst at the European Council on foreign relations.
By 2035, all new cars and vans that are sold in the European Union must produce zero CO2 emissions, and EU leaders and industry want that market share comes locally as much as possible.
Last year, just over 20 percent of the new vehicles sold in the block were electric.
“Currently, only four percent of Chile Lithium goes to Europe,” Stefan Debruyne noted, director of external affairs at Chilean private mining company SQM.
“The EU has every opportunity to increase its share in the battery industry.”
– Shift of supply chains –
But Europe's plans to build dozens of battery factories are hampered by fluctuating consumer demand and competition from Japan (Panasonic), South Korea (LG Energy Solution, Samsung) and, above all, China (Catl, BYD).
The key to locking long -term lithium supply is closer ties in the so -called “lithium triangle” formed by Chile, Argentina and Bolivia, who are good for almost half of the world reserves, analysts say.
To encourage cooperation with these countries, European actors have proposed development paths that would help establish the production of electric batteries in Latin -America.
The EU regulations of the design would enable Latin -America to “reconcile local development with the export of these raw materials, and do not fall into a purely extractive cycle,” said Juan Vazquez, deputy head for Latin -Maamerika and the Caribbean in the OECD development center.
But it is still unclear whether helping exporting countries to develop full supply chains is economically meaningful, or will ultimately tilt to the benefit of Europe.
“What interest are you as a company in setting up Chile to produce cathodes, batteries or more advanced materials if you don't have a local or regional market to deliver?” Said Galarza.
“Why not just take the lithium, refine and do everything in China and send the battery back to us?”
Galarza, who points to the tradition of the automotive cabinet in Mexico, Brazil and Argentina, presented an answer.
“We have to go quickly to the electrification of transport in the region, so that we can share in the benefits of the energy transition,” he argued.
But the road that lies in front of us looks a long time.
Last year, electric vehicles were only two percent of the new car sales in Mexico and Chile, six percent in Brazil and seven percent in Colombia, according to the IEA.
The small Nation Costa Rica stood out as the only nation in the region where EVs reached double digits, with 15 percent of the new car sales.
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