Chinese companies have bought half of the world's largest lithium mines since 2018. 

A recent survey of deals valued at over $100 million conducted by S&P Global Ratings reveals that Chinese firms have purchased 10 out of the 20 lithium mines on the market in the last 5 years, spending an estimated $12.3 billion. 

In comparison, Australian companies, the second-largest group of buyers, have acquired only five mines during the same period.

China's interest in securing a stable supply of lithium and other battery minerals is driven by the growing demand for these resources in the production of electric vehicles, wind turbines, and solar panels as the world transitions to cleaner energy sources.

A key factor motivating the investments is China’s fear of potential disruptions in lithium supply from countries like the United States, Australia, and Canada. Beijing is concerned that these nations could restrict or manipulate their exports of critical raw materials. 

The recent imposition of export restrictions on gallium and germanium, essential materials for semiconductors, electric vehicles, and weapons industries, has heightened these concerns.

In response to these challenges, Chinese car manufacturers and battery producers are taking proactive steps to secure their access to lithium and battery minerals. 

They have acquired equity stakes in 23 lithium, nickel, and cobalt companies, ensuring a more direct and reliable supply chain.

Notably, half of the lithium mines acquired by Chinese interests since 2018 are located in Australia and Canada, while the remaining five are situated in countries such as Argentina, the Democratic Republic of Congo (DRC), and Zimbabwe, which are not aligned with the US.

Australia is a significant player in lithium mining, producing nearly half of the world's lithium supply. However, it exports 90 per cent of its output to China for refining. 

China currently dominates the global lithium processing industry, accounting for approximately 60 per cent of globally refined supplies.

Recent developments in foreign investment policies in Australia and Canada have presented challenges to Chinese firms seeking to invest in these markets. 

Treasurer Jim Chalmers has blocked multiple attempts by Chinese miners to acquire projects, citing national interest concerns. Similar challenges are emerging in Canada, where Ottawa has demanded that Chinese companies divest their stakes in junior miners on national interest grounds.

As a result, China is now shifting its focus toward emerging markets to secure critical mineral deposits. 

Chinese battery makers have entered into agreements with miners in countries like the DRC, Indonesia, Argentina, and Bolivia. These agreements involve equity stakes, joint ventures, or offtake agreements for securing a portion of a mine's output.

The full report is accessible here.