Europe's lithium quest hampered by China and lack of money
Agencies
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 told AFP.
China has a major head start. It currently produces more than three-quarters of batteries sold worldwide, refines 70 percent 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.' The investment gap is huge: China spent $6 billion on lithium projects abroad from 2020 to 2023, while Europe barely coughed up a billion dollars over the same period, according to data compiled by T&E.
At the same time, the bottleneck in supply has tightened: last year saw a 30 percent increase in global demand for lithium, according to a recent report from the International Energy Agency (IEA).
'To secure the supply of raw materials, China is actively investing in mines abroad through state-owned companies with political support from the government,' the IEA noted.
China's Belt and Road Initiative funnelled $21.4 billion into mining beyond its shores in 2024, according to the report.Europe, meanwhile, is 'lagging behind in investment levels in these areas', said Sebastian Galarza, founder of the Centre for Sustainable Mobility in Santiago, Chile.
'The lack of a clear path for developing Europe's battery and mining industries means that gap will be filled by other actors.' In Africa, for example, Chinese demand has propelled Zimbabwe to become the fourth-largest lithium producer in the world.
'The Chinese let their money do the talking,' said Theo Acheampong, an analyst at the European Council on Foreign Relations.
By 2035, all new cars and vans sold in the European Union must produce zero carbon emissions, and EU leaders and industry would like as much as possible of that market share to be sourced locally.
Last year, just over 20 percent of new vehicles sold in the bloc were electric.
'Currently, only four percent of Chile's lithium goes to Europe,' noted Stefan Debruyne, director of external affairs at Chilean private mining company SQM.
'The EU has every opportunity to increase its share of the battery industry.' But Europe's plans to build dozens of battery factories have been hampered by fluctuating consumer demand and competition from Japan (Panasonic), South Korea (LG Energy Solution, Samsung) and, above all, China (CATL, BYD).
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