In China, Bidding Wars for Lithium Top Out at 1,300 Times the Starting Price
lithium prices have more than halved. But Chinese companies have been spending heavily on domestic lithium sources as they try to secure access to the metal at the heart of the energy transition. When a recent auction for exploration rights at a lithium site in China’s southwestern Sichuan province closed, it had garnered more than 11,000 bids.
The auction for the Jiada Lithium Mine closed earlier this week at the equivalent of about $580 million—1,300 times higher than its starting price, according to data from the government-run Sichuan Public Resources Trading Center. Last week, an auction for the Lijiagoubei Lithium Mine, also in Sichuan, closed at more than 1,700 times the opening bid. The frenetic bidding reflects market participants’ expectations that demand for lithium batteries will only continue to grow.
In the first five months of 2023, China’s lithium-battery exports reached $26.7 billion, a 66% jump from the same period a year earlier, according to Chinese customs data. Also driving the bidding war is a geopolitical concern—that Chinese companies’ access to lithium reserves outside the country’s borders will face pressure in the coming years, as Western suppliers answer governmental calls to give priority to companies based in friendly nations. At the same time, many U.S.-aligned countries are increasing their scrutiny of Chinese investments in reserves of critical minerals such as lithium, citing national-security concerns.
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