China has overtaken Australia as the country with the second-largest known lithium reserves in the world, according to new data from China’s Ministry of Natural Resources.
The China Geological Survey demonstrated that the country’s share of global lithium reserves had risen from six per cent to 16.5 per cent, trailing only Chile, which remains the global leader.
Key discoveries include a spodumene-type lithium belt spanning 2800km in western China, containing between an estimated 6.5 million and 30 million tonnes of lithium, while substantial reserves were found in the Qinghai-Xizang Plateau’s salt lakes.
Industry experts suggest these discoveries could reduce China’s reliance on overseas lithium imports.
China accounted for 65 per cent of global lithium demand in 2023, while producing only 25 per cent of supply, according to Cameron Hughes, battery markets analyst at CRU.
“The discovery has the potential to decrease China’s reliance on overseas imports, however it is unlikely that the region will become completely self-reliant,” Hughes told the ABC.
“Additionally, mining companies have to make applications to mine and explore resources and currently this one has not been claimed.
“As such, we are unlikely to see any production from it this decade.”
Despite the boost to China’s resource base, experts anticipate limited near-term impact on Australia’s lithium sector.
Almost all of Australia’s lithium is exported to China for processing, with Australian suppliers expected to remain competitive.
“Demand is growing quickly, ensuring a role for both Australian and Chinese producers,” Hughes said.
However, falling lithium prices could influence global dynamics. After peaking in 2022, prices dropped in 2023 due to an oversupply and slower EV sales.
Prices are expected to stabilise in 2025 with a growing push for EVs, particularly in China, set to rebalance the market.
China’s strengthened reserve position may pose longer-term challenges to Australian miners, particularly if China leverages domestic reserves to streamline its supply chain.
For now, both nations remain key players in an evolving global lithium market.
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