Global lithium market: China unlikely to quickly tap into Afghanistan’s resources – IndexBox


China is a key player in the global lithium market, positioning itself as the second largest importer of lithium carbonate and dominating global exports of lithium oxide and lithium hydroxide. With moderate lithium deposits, the country will need to find ways to expand its resource reserves to support the rapid development of its electric car and electronics industries. It is widely believed that China will establish lithium mining facilities in Afghanistan, but this is unlikely in the near future due to the difficult military and political situation there.

/ EIN News / – Los Angeles, California, November 04, 2021 (GLOBE NEWSWIRE) – The global lithium market is unlikely to see any significant changes anytime soon due to a widely debated possibility of introducing Afghanistan’s undiscovered resource base, according to a new report released by market research firm IndexBox. However, China may first emerge as a potential investor in Afghanistan’s mining sector.

China is the world’s second largest importer of lithium carbonate, but dominates the world in exports of lithium oxide and hydroxide. In 2020, China’s market share represented 74% of world exports, estimated at 77K tonnes. Korea and Japan are the main importers of Chinese lithium. Lithium production in China increased from 10.8,000 tonnes of lithium in 2019 to 14,000 tonnes in 2020. According to USGS estimates, China ranks fourth in the world for lithium reserves (1.5 million tonnes of lithium), behind Chile (9.2 million tonnes), Australia (4.7 million tonnes) and Argentina (1.9 million tonnes).

The rapid development of China’s electric car and electronics industries will require increasing their resource reserves to meet production needs. Alternative methods of increasing their mineral reserves could include expanding domestic excavation, building mining facilities overseas, or increasing lithium imports.

Recently in China, there have been discussions about establishing a mining facility in Afghanistan for rare earth metals to provide a way to increase their resource reserves. The implementation of such a project in the near future is highly unlikely, mainly due to the difficult military and political situation in the country. Mes Aynak in Afghanistan, one of the largest copper deposits in the world, serves as a precedent, where China has invested in mining operations. In 2008, Chinese company MCC-JCL Aynak Minerals (MJAM) received a permit to lease and develop the ore, but it has yet to start mining or smelting the ore. Currently, the project remains in an exploration phase. The main reasons for stopping construction of the facility are the threat of armed conflict in Afghanistan and the lack of necessary resources such as coal and phosphate.

There is no reliable source of data on Afghan lithium deposits. According to estimates from the Afghan Ministry of Mines and Petroleum, there are 1.4 million metric tons of rare earth elements in the country. There is no open source information detailing whether these minerals are accessible for extraction or whether they are contaminated with radioactive elements. At present, there is no active mining for lithium in Afghanistan. The mining industry there is considerably underdeveloped and, due to a low GDP, the only method to stimulate growth is to attract foreign investment, which is hardly feasible until the new Afghan authorities are internationally recognized and the political situation in the country stabilizes.

Currently, the Belt and Road Initiative should enable China to strengthen its leading position in the world lithium export market. The main objective of the initiative is to build a large unified market between the countries of Asia-Pacific, Africa as well as Central and Eastern Europe. This should help China increase its lithium exports as well as increase its imports of crude minerals if necessary. Under the Belt and Road Initiative, China has invested in transport and logistics infrastructure in Sri Lanka, Pakistan, Bangladesh, Nepal and Afghanistan.

Chinese imports of lithium carbonate

China’s lithium carbonate imports reached 50K last year. In value, they also rose sharply by + 8.5% to $ 261 million in 2020.

Chile (37,000 tonnes) was China’s largest supplier of lithium carbonate, with a 74% share of total imports in 2020. In addition, imports of lithium carbonate from Chile were three times higher. times the figures recorded by the second supplier, Argentina (13,000 tonnes). .

Chinese exports of lithium oxide and hydroxide

Exports of lithium oxide and lithium hydroxide from China soared to 57,000 tonnes in 2020, up + 16% from the previous year. In value, exports of lithium oxide and hydroxide decreased slightly to $ 688 million, IndexBox estimates.

South Korea (29,000 tonnes) and Japan (26,000 tonnes) were the main destinations for lithium oxide and hydroxide exports from China. In 2020, the most notable growth rate in the volume of shipments, among the main destination countries, was achieved by South Korea (+ 68% year-on-year). In terms of value, South Korea ($ 357 million) and Japan ($ 313 million) were the largest markets for lithium oxide and hydroxide exported from China to the world.

About IndexBox

IndexBox is a market research company that develops a market intelligence platform that helps business analysts find actionable insights and make data-driven decisions. The platform provides data on the consumption, production, trade and prices of more than 10,000 different products in 200 countries.

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Companies mentioned in the report

Sichuan Tianqi Lithium, Albemarle Corp., Sociedad Química y Minera de Chile SA, Orocobre Ltd., Talison Lithium Pty Ltd., Galaxy Resources Ltd., Mineral Resources Ltd., Nemaska ​​Lithium Inc., Lithium Americas Corp., Rincon Ltd . , Contemporary Amperex Technology Limited (CATL), LG Chem, Samsung SDI Co., Ltd., Panasonic, Livent, Ganfeng Lithium, Tesla Motors, Inc., BAIC Motor Co., Bavarian Motor Works AG (BMW), BYD Co., Daimler AG (Mercedes-Benz), Ford Motor Co., General Motors Co., Jaguar Land Rover Automotive PLC, Mitsubishi Motors, Nissan Motor Co., Volkswagen Group, Toyota.


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