Olaf Scholz uses his trip to Latin America Help Germany get extra supplies of lithium Auto giants like Mercedes-Benz Group AG and Volkswagen AG need batteries for their electric vehicles.
Chile is the world’s second largest lithium supplier after Australia China now imports a large portion of its production. Scholes, who met the Chilean president on Sunday, Gabriel Boric, in Santiago, who want a bigger share for Europe’s biggest economy, are familiar with the plans. The Foreign Minister also met the President of Brazil today. Luis Inacio Lula da Silva.
Part of Germany’s strategy for annexing Chile is to do more processing domestically and help scale up extraction and processing. Less harmful to the environmentThe people asked not to be identified because the discussions are private.
“There are states that think all the raw materials come from China, but that’s not the case. In fact, Many raw materials come from Argentina or Chile and are shipped from there to China, where they are processed and resold,” Scholes said on Sunday in Buenos Aires. “The question is: Can we not change the processing of these goods, which creates thousands of jobs in the countries from which these goods come?”
Large developed countries like Germany They compete fiercely for dwindling resourcesAnd access to metals and rare earths is critical to the transition to cleaner and more technologically advanced economies.
In the global race for many key commodities, China has become the dominant supplier or processor, prompting warnings that the Beijing government is exerting undue influence.
Those warnings are particularly resonant in Germany, which has relied heavily on fossil fuel imports from Russia in recent decades. Since Vladimir Putin’s invasion of Ukraine, the Scholz government has rushed to diversify its suppliers of the goods it needs to keep its economy running.
In Buenos Aires, Germany and Argentina signed a memorandum of understanding on Saturday It seeks to protect Berlin’s access to the country’s abundant lithium resources. After a meeting with the Argentine president, Alberto FernandezScholz spoke against a policy that “would only serve the interests of that country, which wants to implement basic products for itself.”
Scholes sent a similar message during a visit to the Chilean capital, Santiago, on Sunday. Germany is ready to enter the lithium trade with Latin America in a bid to gain independence from China.
Chilean President Gabriel Boric has said he is determined to restructure the lithium industry in his country, saying at a press conference that he wants to create a national lithium company through various contractual mechanisms, and that Chile has the right and duty to participate in the industry.
Only two companies produce lithium in Chile: US-based Albemarle Corp. and local company SQM, which includes China’s Tianqi Lithium Corp. Has more than 20% stake. Both mainly produce lithium carbonate, 90% of which goes to Asia.
SQM and Albemarle extract large amounts of brine from beneath a salt flat located in the Chilean desert in the north of the country and store it in large evaporation ponds for a year or more. The resulting concentrate is converted into lithium hydroxide and lithium carbonate at nearby plants and shipped to battery makers in China and Korea.
Although simple and cost-effective, the process uses much less fresh water, chemicals and energy than hard rock mining. But the solar evaporation technique involves extracting billions of liters of brine and then evaporating it in one of the driest places on Earth, which some say is a threat to wildlife such as pink flamingos that inhabit the Martian landscape.
There is an initiative to move to a more selective or direct mining process Meaning very little evaporation, and possibly lower productivity and profitability. Both SQM and Albemarle are exploring such techniques, which have generally been poorly tested commercially.
Chile and Australia account for most of the world’s lithium extraction. China has more than half of all refining capacity to convert specialized battery chemicals.
Concerns are growing about Chinese dominance in refining and processing capacity for the commodity, as reliance on China amid trade and political tensions is now seen as a vulnerability prompting a rethinking of global supply lines.
China has the lowest cost to process lithium due to low construction costs And a great platform of processed chemical engineering to fall back on. In Australia and the US, the cost of building refining capacity is double, while South America is somewhere in between. Both SQM and Albemarle have processing assets in China.
Last year, the President of the European Commission, Ursula van der LeyenHe predicts that commodities like lithium and rare earths will soon become more important than oil and gas.
Van der Leyen cited a forecast that in the European Union alone, demand for rare earths, used in products ranging from electric motors to wind turbines and wearable electronics, will increase fivefold by 2030.
(With information from Bloomberg / By Arne Delphs and James Atwood)
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