Electric ships and trucks to buoy battery boom, says China lithium boss

{"text":[[{"start":11.4,"text":"Even the most bullish forecasts for lithium demand underestimate the rise of new battery-powered industries, one of China’s biggest producers has said, just as a global fight for access to critical minerals intensifies."}],[{"start":24.700000000000003,"text":"Tianqi Lithium chief executive Frank Ha said while most forecasts factored in growing demand for the element used to make electric batteries over the next decade, many had not accounted for the rapid expansion of battery-powered trucks, mining equipment and ships. “This is going to be a huge increase,” he told the FT at his office in Chengdu."}],[{"start":45.2,"text":"Tianqi is among a clutch of companies that have emerged as central to China’s dominance over the world’s clean technology supply chains. "}],[{"start":54,"text":"Chinese companies, including rival Ganfeng Lithium, are estimated to control about half the market for lithium production, while China accounts for about 80 per cent of global battery cell production, dominated by CATL and BYD."}],[{"start":69.4,"text":"Many countries had “closed their doors” to miners just as the world was grasping lithium’s central role in the global transition to electric transport systems, Ha said. "}],[{"start":79.80000000000001,"text":"While lithium demand was booming even before the Iran war, Ha said the surge in petrol prices had prompted him to consider swapping his Mercedes for an electric BYD car."}],[{"start":null,"text":"

"}],[{"start":90.45000000000002,"text":"According to International Energy Agency data, demand for the critical mineral has risen by an average of about 30 per cent annually this decade, compared with about 10 per cent growth in the 2010s. "}],[{"start":102.85000000000002,"text":"Forecasts from Wood Mackenzie, Project Blue, Fastmarkets and Mysteel show annual lithium demand will jump to between 3.6mn and 6.3mn tonnes over the next decade, from 1.1mn tonnes last year."}],[{"start":119.25000000000003,"text":"In March, Wood Mackenzie warned that existing supply projects were unlikely to meet demand beyond the mid-2030s, while also predicting annual lithium demand potentially exceeding 13mn tonnes by 2050."}],[{"start":132.55000000000004,"text":"Ha argued that most lower-end forecasts were based on rising EV growth but did not yet fully account for demand from emerging sectors such as energy storage, AI data centres, humanoid robots and drones."}],[{"start":146.75000000000003,"text":"Lithium is produced through hard rock mining or brine extraction. Tianqi, which is dual listed in Shenzhen and Hong Kong, owns stakes in mining operations in Australia and Chile and has production facilities in several parts of China."}],[{"start":null,"text":""}],[{"start":161.45000000000002,"text":"Tianqi controls a joint venture with Australian miner IGO that operates a lithium hydroxide factory in Kwinana, south of Perth, as well as a stake in Greenbushes, one of the world’s largest hard-rock lithium deposits. "}],[{"start":175.3,"text":"The lossmaking Kwinana refinery has caused friction among the two companies. IGO has written off the entire value of its stake and called for its closure, while Tianqi argued that it will become a valuable asset for Australia’s upstream mining sector. "}],[{"start":192.70000000000002,"text":"Greenbushes is owned by Tianqi and IGO and America’s Albemarle, the world’s largest lithium producer. The project has also come under strain after IGO downgraded its production guidance in April over “systemic” issues. "}],[{"start":207.70000000000002,"text":"The company is open to deals where it can help fund Australian lithium players to secure supplies of the metal and accelerate development, he said, but tougher foreign investment laws meant it would be unlikely to be allowed to own the mines outright. "}],[{"start":222.4,"text":"The Australian government has tightened foreign ownership rules for critical minerals and strategic assets as it tries to build an alternative supply chain to China. The ownership of lithium assets has also become more contested as local investors, including Australia’s richest person Gina Rinehart, buy up stakes."}],[{"start":null,"text":""}],[{"start":241,"text":"Even as global demand has boomed, emerging markets such as Chile and Argentina have been beset by resource nationalisation and political risk."}],[{"start":250.2,"text":"Tianqi Lithium paid $4bn in 2018 to become the second-largest shareholder in Chile’s SQM, gambling to gain a strategic foothold in one of the world’s best-quality lithium reserves."}],[{"start":264.15,"text":"The push to cement its position in Latin America was complicated by Chile’s push for more state control over lithium that began in 2024. Under a deal with state-owned Codelco, SQM will form a joint venture covering its operations in the Atacama Desert, which produces about one-fifth of global lithium. "}],[{"start":283,"text":"The joint venture now risks diluting Tianqi’s interests in SQM’s lithium business and cutting it out of further possible access to the high-quality resources of the mineral."}],[{"start":null,"text":""}],[{"start":293.4,"text":"Even on home territory in China, access to valuable natural resources can be difficult for private-sector companies. While Tibet has vast lithium deposits, most are believed to be under the control of state groups."}],[{"start":306.95,"text":"Against that backdrop, Ha said Tianqi was doubling down on investments in new battery chemistries as well as battery material recycling and waste processing."}],[{"start":316.9,"text":"A key focus, he said, was solid-state batteries, which avoid the liquid electrolyte used in lithium-based technology."}],[{"start":324.04999999999995,"text":"The group’s lithium carbonate plant in Anju, Sichuan was built in 2023 with the ability to produce 20,000 tonnes of battery-grade lithium carbonate a year. Engineers say it is now producing above that level and are working on further incremental gains to squeeze what they can out of the facility."}],[{"start":342.29999999999995,"text":"Tianqi has a near-10 per cent stake in Shanghai Aerospace Power Technology, according to company filing and business registration records. It also took a 2.9 per cent stake in Welion New Energy Technology in 2018, a leading start-up that develops hybrid, or solid-liquid, state batteries, and solid-state lithium batteries."}],[{"start":362.54999999999995,"text":"Tianqi also set up a joint venture with Welion in Shenzhen, in which it holds a controlling stake of 58.5 per cent."}],[{"start":370.24999999999994,"text":"The investments have the potential to help smooth Tianqi’s sharp profit swings, which closely track the lithium price cycle. "}],[{"start":null,"text":""}],[{"start":377.59999999999997,"text":"The company’s profits surged to a record Rmb24bn (about $3.5bn) in 2022 as lithium carbonate prices hit record highs, before swinging to a near-Rmb8bn loss in 2024 after prices collapsed by more than 80 per cent. As optimism over AI-driven lithium demand revived the market, Tianqi’s first-quarter profit this year rebounded to Rmb1.9bn."}],[{"start":401.4,"text":"Ha also wants to reform industry pricing. "}],[{"start":404.79999999999995,"text":"The growing gap between futures and spot prices in the lithium market is squeezing midstream players, who must buy raw materials at high prices but sell their products more cheaply to big customers such as CATL and BYD.  "}],[{"start":418.99999999999994,"text":"He has called for more flexible pricing, including linking benchmarks to futures and adopting index-based pricing, which he argued could help stabilise supply. "}],[{"start":429.54999999999995,"text":"Additional reporting by Camilla Hodgson in London"}],[{"start":439.94999999999993,"text":""}]],"url":"https://audio.ftcn.net.cn/album/a_1779167578_4077.mp3"}