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China's lithium mining growth driven by lepidolite

extraction

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Chinese miners supported by government despite

unprofitability

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China's lithium refining dominance seen decreasing

By Ernest Scheyder

LAS VEGAS, June 25 (Reuters) - China by next year will

overtake Australia as the world's top miner of the battery metal

lithium, according to a forecast from consultancy Fastmarkets,

and its market prowess is expected to grow through 2035 even as

many Chinese producers remain unprofitable.

The projections are the latest data point underscoring Beijing's

commanding presence across the global metals supply chain, with

China the dominant miner or refiner of more than half the

minerals considered critical by the U.S. Geological Survey.

"China's got a very clear strategy to develop its mineral

resources," Paul Lusty, the consultancy's head of battery raw

materials research, told Reuters on the sidelines of the

Fastmarkets Lithium and Battery Raw Materials Conference in Las

Vegas.

Australia has been the world's largest lithium miner since

taking that spot from Chile in 2017, but Australian miners have

curtailed production or delayed expansions amid a global drop in

lithium prices.

By next year, Chinese miners are likely to extract 8,000 to

10,000 more metric tons of lithium than Australian rivals,

according to the Fastmarkets forecast. That would be a jump from

2023, when China was the world's third-largest lithium producer.

By 2035, Chinese miners are likely to extract 900,000 metric

tons of lithium, compared to Australia's 680,000 metric tons,

Chile's 435,000 metric tons and Argentina's 380,000 metric tons,

according to the forecast.

Much of China's growth has and likely will continue to come from

mining a type of hard rock ore known as lepidolite, which is

prolific in the southern part of the country.

China's lepidolite mining is more costly than extracting

lithium from salty brines and can cause more environmental harm

due to toxic by-products such as thallium and tantalum that

pollute water supplies.

China's lithium miners have been reticent to cut production

due to support from the Chinese government, "pressure" from

local municipalities to keep operations open - and thus local

jobs, and a desire to maintain market share as demand for the

metal rises, Lusty said.

"This continued production - despite the lack of

profitability within the market - starts to make a lot more

sense when you consider all those factors," he said.

Chinese battery giant CATL is one of the largest

producers of lepidolite and had paused production at a key mine

last September before resuming output in February.

Beyond mining, China for years has been the world's largest

refiner of the ultralight metal, with roughly 70% market share.

Lithium refineries turn the metal into a form that can be used

to make cathodes for batteries.

Efforts by other countries to grow their own lithium

refining should cut China's market share to 60% by 2035,

Fastmarkets forecasts.

China's market prowess also extends to electric vehicle

supply chain, with more than 60% of all EVs globally sold last

year in that country, according to data from battery producer LG

Energy Solutions.