David Brocas, founder of mineral supply chain advisory firm Voltaire Minerals, said that battery metals are becoming as strategically important to countries as oil, and carmakers will need a special "diversified sourcing strategy" in response. Major carmakers have already been looking for new lithium supplies in the United States, Europe and Africa. General Motors , for instance, invested in Lithium Americas Corp in January and will help it to develop Nevada's Thacker Pass lithium mining project.
This push for fresh options is expected to accelerate. "We're implementing a commodity roadmap that includes regional diversification," a Volkswagen spokeswoman said in an email. "So we're looking at a lot of regions."
Mercedes-Benz Chief Technology Officer Markus Schaefer told reporters on Monday that the carmaker is "still open to direct purchasing from Chile - but there are alternatives, such as Australia and Canada."
Shares in lithium miners in Australia, the largest producer making up around half of global supply, rose after Chile's announcement.
"NO LITHIUM = NO BATTERIES = NO EVS" Chile's move to nationalise its lithium industry follows a trend of countries seeking tighter control over key resources. Mexico has nationalised its lithium industry, while Zimbabwe, Myanmar and Indonesia have all announced restrictions affecting various commodities. Santiago's announcement "will place an even higher focus on secure supplies of UK and European lithium for carmakers who are desperate to secure raw materials for EVs," Jeremy Wrathall, CEO of Cornish Lithium, wrote in an email. "No lithium = no batteries = no EVs."
Lithium is not the first supply chain crisis facing the car industry, which found itself short of semiconductors during the COVID-19 pandemic and is unlikely to be the last. Rob Anstey, CEO at GDI, which is developing silicon anodes for batteries, said this should be a wake-up call for an auto industry dependent on China for graphite for battery electrodes. "If Chile nationalises lithium, Australia can increase supply and America and Europe will increase supply," Anstey said. "But if China starts to restrict exports of graphite, the entire battery global supply chain screeches to a halt."
Several startups are developing EV batteries with silicon-based electrodes that hold more energy, have greater range and charge more quickly, but at present 70% of all graphite comes from China. Chile's move may provide an advantage for other countries hopeful of developing their own lithium supplies. Lithium exploration company Aterian sees opportunities for mining in a number of African countries, including Morocco and Rwanda.
"These countries will attract the energy transition investment which would have previously gone to Chile," said Executive Chairman Charles Bray. <^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^ FACTBOX - Chile lithium move lastest in global resource nationalism trend FACTBOX-Lithium key element for electric vehicle ramp up BREAKINGVIEWS-Chile’s lithium grab puts foreign miners on notice FACTBOX-World's biggest lithium producers Chile plans to nationalize its vast lithium industry ^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^> (Reporting By Nick Carey; additional reporting by Ilona Wissenbach in Frankfurt, Giulio Piovaccari in Milan, Marie Mannes in Stockholm and Victoria Waldersee in Berlin; Editing by Sharon Singleton)
