China's lithium campaign threatens Germany and Europe
Chinese companies invest billions in Latin America and Africa to secure lithium deposits

China is waging a global campaign to secure lithium deposits, which could lead to major problems for Germany and Europe. In view of the boom in electric cars and the increasing demand for batteries, a global race is emerging for the indispensable light metal for e-mobility. Chinese companies are investing billions in Latin America and Africa to secure lithium deposits. Experts predict that China could control about a third of the world's lithium supply by 2025.
State and Party leader Xi Jinping launched the offensive three years ago to strengthen China's dependence in international supply chains and take action against foreign disruptions of supply. Because of the aggressive approach, Kiel economics professor Tobias Heidland is calling for greater diversification of German industry, saying dependence on China for lithium poses a major risk to German companies.
EU Commission President Ursula von der Leyen also warns against too much dependence on China for raw materials. The EU currently gets 97 percent of its lithium from China. With the rising demand for lithium for batteries in electric cars, demand is expected to increase 17-fold by 2050. Chinese investments in South America and Africa have the advantage of having lower requirements for environmental and human rights standards than European companies.
However, German companies could score points in countries that value the environment and sustainability in lithium mining. Heidland sees opportunities for German companies in such countries that consciously want to pay attention to sustainability. Africa is also the focus of Chinese efforts, as countries such as Zimbabwe, the Democratic Republic of Congo, Ghana, Namibia and Mali have significant lithium deposits. Chinese investors have already poured billions into lithium projects in Zimbabwe.
The situation is also influenced by demands from some African countries for on-site processing of raw materials to keep a larger share of profits in the country. China already controls the playing field in Nigeria, where construction has begun on the country's first lithium processing plant by a Chinese company. Nigeria had previously rejected a request from U.S. carmaker Tesla, saying the company was only interested in exporting raw lithium.
China's efforts to secure lithium deposits pose a major challenge for Germany and Europe. In order to maintain its own competitiveness, a diversification of raw material sources and an increased promotion of environmentally conscious and sustainable approaches in the lithium industry is necessary. This is the only way German companies can maintain their position in this global race and establish sustainable supply chains.
