Europe's lithium quest hampered by China

Europe’s ambition to be a world player in decarbonised transportation arguably depends on sourcing lithium abroad, especially in South America.

- Alvaro Villalobos, Agence France-Presse

Even the bloc’s broader energy security and climate goals could depend on securing a steady supply of the key mineral, used in batteries and other clean energy supply chains, But Europe has run into a trio of obstacles: lack of money, double-edged regulations and competition from China, analysts said. China has a major head start.

It currently produces more than three-quarters of batteries sold worldwide, refines 70 per cent of raw lithium and is the world's third-largest extractor behind Australia and Chile, according to 2024 data from the United States Geological Survey. To gain a foothold, Europe has developed a regulatory framework that emphasises environmental preservation, quality job creation and cooperation with local communities. It has also signed bilateral agreements with about 15 countries, including Chile and Argentina, the world’s fifth-largest lithium producer, But too often it fails to deliver when it comes to investment, say experts. “I see a lot of memoranda of understanding, but there is a lack of action,” Julia Poliscanova, director of electric vehicles at the Transport and Environment (T&E) think tank, told AFP, “More than once, on the day that we signed another MoU, the Chinese were buying an entire mine in the same country.”