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China played a great game on lithium and we’ve been slow to react: CEO

This image, from March 2021, shows a worker installing car batteries at a facility in China.

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According to the CEO of US Lithium.

Speaking to CNBC’s “Squawk Box Europe” on Monday, Simon Clarke discussed how China has secured its power position in the industry.

“I just think the Chinese were – I mean, hats off, they played a great game,” he said.

He added: “For decades, they have housed some of the best assets around the world and quietly run their business and develop their knowledge of building lithium-technology- ions, very early”. “And we were very slow to react to that.”

American Lithium CEO says the problem with lithium is that it's extremely hard to recover

He added that the US’ Inflation Reduction Actand a number of other measures, which means that people are “starting to become aware of it.”

Besides its use in cell phones, computers, tablets and a host of other devices synonymous with modern life, lithium – what some call “white gold” – is vital to with batteries to power electric vehicles.

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China is undoubtedly a dominant force in this area.

In it World Energy Outlook 2022According to the International Energy Agency, the country accounts for about 60 percent of the world’s lithium chemical supply. China also produces three-quarters of all lithium-ion batteries, according to IEA.

With demand for lithium growing, major economies are trying to boost their own supplies and reduce their dependence on other parts of the world, including China.

The stakes are very high. In a translation of her State of the Union speech, read in September, European Commission President Ursula von der Leyen said “lithium and rare earths will soon be more important than oil and gas.”

Along with addressing supply security, von der Leyen also stressed the importance of handling.

“Today, China controls the global processing industry,” she said. “Almost 90%…rare earth[s] and 60% of lithium is processed in China.”

Read more about electric vehicles from CNBC Pro

With this in mind, a number of companies in Europe are looking to develop projects that focus on securing supply.

Mineral giants based in Paris imerysfor example, the plan to lithium mining project development in central France, while a facility described as the UK’s first large-scale lithium refinery is is set to be located in the north of England.

Looking ahead, Clarke of American Lithium forecasts continued geopolitical competition in this area.

“There is a real initiative to take back some of the supply chains from… China,” he said.

“I think China is in such a dominant position, it’s going to be very difficult to do that. But… I think you’re starting to see that approach playing out.”

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