China Secures Lithium Supply from Chile, Asserting Dominance in Battery production
China has moved to secure its access to lithium, a critical mineral for battery production, by imposing conditions on a major joint venture between Chile’s state copper company, Codelco, and Sociedad Química y Minera de Chile (SQM), one of the world’s largest lithium producers. The agreement, focused on exploiting the vast lithium reserves of the salar de Atacama in Chile - a region holding some of the largest known reserves globally – was contingent upon approval from China’s State Administration for Market Regulation (SAMR).
SAMR’s approval,the final regulatory hurdle after clearances from Chile,the European Union,Brazil,Japan,South Korea,and Saudi Arabia,came with a key stipulation: Codelco and SQM must prioritize lithium carbonate deliveries to Chinese clients,even in the event of supply disruptions. The regulator explicitly prohibited any rejection, restriction, or delay of shipments to the Chinese market.
This condition underscores China’s strategic interest in controlling the lithium supply chain. The Salar de Atacama is central to the global lithium industry, and chile is a key source for the mineral powering the electric vehicle revolution. The joint venture aims to expand state control over this strategic resource, but China’s intervention highlights its influence over the process.
The project also involves Tianqi, a Chinese company that already holds a significant stake in SQM. Throughout the progress of the joint venture, tianqi raised concerns and demands, demonstrating its vested interest.
Chilean authorities had hoped to finalize the joint venture structure before the end of the current presidential term, but China’s conditions demonstrate its determination to secure its position as a dominant force in global battery production. The move signals a broader trend of China leveraging its economic power to gain access to critical resources worldwide, possibly reshaping the landscape of the global energy transition.
