In the dynamic landscape of the global battery industry, China's influence is extending far beyond its borders. With strategic investments in mining operations shaping the future of EV battery production, China has been focusing its efforts on developing in other nations to diversify its supply chains and maintain a strong global presence. At the same time, the rest of the world is also investing both locally and internationally in the battery supply chain, seeking to secure their positions in this ever-growing sector. From metals to battery components, is China’s grip on world battery resources as strong as it once was or is production increasingly spread out across the world?
China’s Current Grip on Africa
Following the announcement that over $700 million will be invested by Chinese companies in Morocco, the country is set to become a key cathode producer. Indeed, China's BTR disclosed a $497 million investment in a new facility in December 2023, with the combined planned capacity representing approximately a quarter of Europe's total forecast capacity. The new plant, located in the Tangier Province, will have the capacity to produce 50,000 tons of cathodes for lithium-ion batteries a year. There was also a notable increase in Chinese investments, with announcements from key players including Huayou Cobalt, CNGR, and Tinci, adding most of Morocco’s cathode capacity in 2023. In addition to this, eight out of 27 of the planned lithium mines in Africa are fully owned by Chinese companies and majority owners of three.
Morocco's advantageous free trade agreements with Europe and the US stand out as a significant incentive for attracting foreign investment. This makes the North African country an ideal operational base for Chinese companies seeking entry into these markets. Moreover, Morocco’s natural resources have also been a major factor in attracting foreign investment, including its reserves of phosphate, one of the minerals used to make LFP cathodes. Furthermore, Morocco’s natural resources, including its reserves of phosphate, one of the minerals used to make LFP cathodes, have also played a pivotal role in attracting foreign investments.
Global Shifts in Battery Supply Chains
Currently, China dominates the production of high-purity manganese sulfate (HPMSM) used in batteries, accounting for 96% of global supply. However, for the first time, 2023 saw a significant amount of investment into the supply chain outside the country.
While Australia’s Element 25 was already supplying manganese sulfate to GM, the American OEM has now lent $85 million to the resource company for a high-purity manganese sulfate processing facility in Louisiana. At the same time, Vibrantz Technologies announced plans to establish a similar pilot plant in Mexico. Furthermore, 2023 saw the development of solid-state battery commercialization as US startup, Solid Power, became the first Western producer of the next-generation battery to start the automotive qualification process for passenger EVs.
Similarly in South America, the amount of investments in metals and minerals for batteries has been climbing. Recently in Chile, SQM and state-owned copper miner Codelco agreed to form a partnership to produce lithium, which follows on from Chilean president Gabriel Boric’s April 2023 plan to part-nationalize the lithium industry. Through this plan, the Boric government is seeking greater control over its critical mineral resources. However, it’s expected that Chile's share of global supply is due to fall dramatically over the next few years and the country will have to attract more private investors to compete with countries like Argentina, which is expected to bring new capacity online more quickly.
Addionics’ Global Collaboration and Innovation
As the global battery industry undergoes a transformative shift, China's grip on the supply chain and the energy storage sector could be loosening as other nations strategically invest in it. This can lead to opportunities to arise for companies to collaborate with industry players and contribute to the technological advancements in various regions. Addionics 3D Current Collectors can be dropped into any EV battery production line, require less materials to be made and are compatible with all chemistries. With the incorporation of an AI structure optimization algorithm, the technology seamlessly integrates into the battery's hardware, forming a comprehensive and intelligent solution. As a result, this solution is well-positioned to drive innovation and foster collaboration and technical advancements in the evolving global battery industry.