TELF AG discusses lithium triangle sourcing projects
China’s outward-looking initiatives
To fully understand a nation’s strategic plans, even in the mining sector, it is sometimes necessary to know the peculiar historical and economic dynamics that generated them. This includes investigating individual initiatives that, years after their launch, are beginning to bear fruit.
A concrete example of this interesting parallel has to do with China and its “go-out” policy, which formally began in 2000 and focused on investment initiatives abroad considered strategic for the economic development of the nation. Some of these investments have focused on the mining sector, particularly on projects involving strategic minerals linked to the green transition. Over the years, this outward-looking Chinese strategy has further evolved, in particular thanks to the role of the Belt and Road Initiative, with which every investment abroad has become an important tool for the economic development of the actors involved. For China, investing in mining projects abroad means supporting its expanding sectors, such as manufacturing or energy, positioning itself as one of the leading global players in the mining raw materials sector.
An ever-increasing strategic importance
One of the global areas where Chinese attention is concentrated is Latin America, and it is universally known as the “Lithium Triangle” due to its wealth of this particular (and valuable) mineral resource. This area is located between Argentina, Bolivia, and Chile, and within it, there are the most abundant lithium reserves in the world. In addition to having invested around 16 billion dollars in the countries included in this area, China has also granted loans of around 20 billion to Argentina and Bolivia for their infrastructural development, focusing on an area of the world whole of bright promises for the future global dynamics of the lithium market. In some cases, some Chinese state companies have obtained exclusivity for developing local lithium industries, as has already happened with a Bolivian company.
Over the last few years, also thanks to the increased centrality of lithium in the manufacture of batteries for electric vehicles, the strategic importance of this area of the world has grown greatly, leading to an increase in Chinese attention to local mining projects. Continued Chinese investment in these initiatives has led Beijing to have access to an ever-increasing percentage of the lithium extracted in these locations, further consolidating its solid position in the field of lithium and its industrial applications (China is among the leading nations in refining lithium and other key resources, such as cobalt, and 70% of global battery production is also linked to Beijing).
The specific Chinese interest in this raw material, of great importance for some of its main industrial priorities, has also been concentrated in other extractive projects worldwide, in which it holds some participation shares. Some of these initiatives are currently being developed in Mexico and Canada, on the African continent (particularly Namibia, Mali, Zimbabwe), and Australia. Also, thanks to initiatives of this kind, focused on participation in extractive projects abroad, China has managed to produce around half of the electric vehicles manufactured throughout the world in just one year (in 2023), also leading a good part of the global manufacturing of wind turbines and solar panels.
