Lithium-ion batteries, which are made of minerals like potassium, copper, and chrome, have the potential to revolutionize decarbonization. & nbsp,
However, their effectiveness depends on a number of factors, including China’s predominance in the handling and inland applications of minerals, the complexity of the supply chain, and upcoming technologies related to battery minerals supply chains. The risks involved in this project are higher.
Some countries have concentrated the majority of these minerals’ resources. Australia produces 55 % of lithium, Indonesia produces 37 % of nickel, and the Democratic Republic of the Congo produces 70 % of cobalt.
However, China is the world leader in the running of these essential minerals, both domestically and internationally through its ownership or control of crucial mineral resources. It specifically supervises the transformation of 58 % of lithium, 67 % of cobalt, and 35 % of nickel into battery-grade cathode chemicals.
The geographical concentration of power mineral manufacturing and processing, especially China’s presence in processing capacity, adds volatility to geopolitics, where energy security has always been a top priority.
Power minerals are defining the current era by influencing global economic, environmental, and political policies, just as fuel and oil did in the past.
The new discovery of sizable potassium resources in Iran demonstrates how swiftly crucial minerals’ geopolitics and nbsp may change. This development raises the possibility of an alliance between Australia and Indonesia on a corporate level to create an alternate battery mineral supply chain. & nbsp,
These countries are well-positioned to build a fruitful partnership because they are geographically close together and have comparable resources.
Such an empire might advance Australia’s ambitions to become a major player in the global power supply network, establish Indonesia as an EV and battery hub, and support the US-led Mineral Security Partnership. & nbsp,
Whether this collaboration you successfully address the serious problems brought on by climate change and have a positive impact on improving relations between Australia and China are the key questions that must be answered.
Much setup times, regulation and environmental concerns, and the investment required for capabilities and infrastructures are just a few of the obstacles that must be overcome for such an ally to achieve. Just China has so far been able to create a full supply chain to get around all these obstacles.
Questionable technological trends have given the complexity of minerals geography yet another dimension. The industry is looking into options to nickel and cobalt, two somewhat uncommon components in battery minerals, in order to reduce environmental and provide risks. The development of & nbsp, lithium iron phosphate, and( LFP ) batteries, which do away with the need for cobalt and nickel, is a leading Chinese battery manufacturer.
LFP batteries have seen improvements in energy density and are being used more frequently in EVs compared to & nbsp, nickel-manganese-cobalt,( NMC ) batteries, which have higher energy densities but are more expensive and less tolerant of higher temperatures. & nbsp,
In China, their market share increased from 38 % in 2020 to 66 % in the first half of 2023. This change lessens the political leverage of nations that are rich in chromium and nickel while also allaying security concerns about these minerals.
Power materials are commodities whose value is influenced by the interactions of supply and demand, such as nickel and cobalt. Although resource loss is not an immediate problem, there is a perceived lack. Instead of a shortage, this scarcity is caused more by the race to carry reserves in order to reduce political and supply chain risks.
China’s dominance in clean energy systems is seen as a threat to international energy security from political perspectives. US politicians are concerned about this point of view. & nbsp,
A culture to secure these materials is being exacerbated by geopolitical tensions and mistrust among countries with different ideologies. This competition may undermine the global supply chain and obstruct efforts to achieve the Paris Agreement’s carbon reduction targets.
A potential alignment between Australia and Indonesia holds particular charm for the United States in this situation. The proposed coalition even raises important issues because battery technology’s future is uncertain. & nbsp,
The essential systems required for the production of batteries, spend management, and mineral purification are lacking in both Australia and Indonesia. The empire raises more questions than answers about its effectiveness in addressing urgent climate change issues without China’s involvement, in addition to significant investments in facilities and manufacturing facilities and large economic costs.
The reestablishment of relationships between Australia and China may also be hampered by the formation of such an alliance. This is largely attributable to China’s significant investments in the metal control sectors in Indonesia and Australia, as well as its steadfast desire to uphold its position.
On the other hand, China’s dominance in battery technology may help decarbonize the planet by being a worldwide property. Contrary to popular belief, personal market development rather than state-backed investment is what has led to China’s guide in the battery supply chain.
Leading non-state businesses like & nbsp, Ganfeng, and / psc, Tianqi, e cctl, CATL & nb s pp, as well as d r g h t v l o f w m j i q u k a x y z en, have prospered in fierce domestic competition.
The unified global approach to decarbonization had be undermined by such initiatives, even though creating an alternate battery supply chain may increase diversity and improve the resilience of the current supply infrastructure.
It is essential to include all tech-forward countries, & nbsp, including China, as key players in order to encourage a successful alliance between Australia and Indonesia in developing an alternative battery supply chain. In the fight against climate change, open international trade and investment are essential strategies. & nbsp,
To accomplish this, however, requires overcoming current political and ideological divides in favor of fostering relationships that are based solely on & nbsp, like-mindedness.
Marina Yue Zhang teaches as an associate professor at the University of Technology Sydney’s Australia-China Relations Institute.
This post, which was previously published by the East Asia Forum, has been republished with a Creative Commons license.