Battery Metals and China’s Industrial Strategy
Lithium, cobalt, and nickel: how resource security drives Beijing’s tech ambitions.
✍️ By Dr. Alan Hughes | Telecoms & Space Policy Analyst
China’s rapid expansion in electric vehicles, renewable energy, and consumer electronics is underpinned by one critical factor: secure access to battery metals. Lithium, cobalt, and nickel form the backbone of energy storage, and Beijing has spent the past decade building an industrial strategy that ensures a steady supply. In 2025, this strategy is not only about fueling domestic growth but also about projecting influence in global clean-tech markets.
Securing Resources Abroad
Chinese firms have invested heavily in overseas mining operations to guarantee long-term access. Companies like Ganfeng Lithium and China Molybdenum hold stakes in projects across Latin America, Africa, and Australia.
In the Democratic Republic of Congo, Chinese companies control a significant share of cobalt production, while in Argentina and Chile, partnerships with local governments give Beijing leverage over lithium brine projects. These moves reflect a calculated strategy: control upstream supply to safeguard downstream industries like EVs and energy storage.
Domestic Refining Power
While resources may come from abroad, China dominates the refining stage. More than 60 percent of global lithium and cobalt refining capacity is located in China, giving its manufacturers a decisive cost advantage.
This vertical integration allows companies such as CATL and BYD not only to reduce dependence on foreign refiners but also to lock in steady input flows for domestic gigafactories. It is a model that mirrors China’s approach in other industries—own the bottlenecks, and the rest of the value chain follows.
Balancing Environment and Growth
The push for battery metals has not come without controversy. Domestically, China’s lithium-rich provinces like Qinghai and Sichuan face environmental challenges from water-intensive mining. Abroad, accusations of exploitative practices in Africa have drawn international scrutiny.
To mitigate backlash, Beijing has promoted the idea of “green mining” and pledged stricter oversight of environmental standards. Still, balancing resource security with sustainability remains one of the most pressing dilemmas for policymakers.
Strategic Stockpiling
Beyond mining and refining, China has also turned to strategic stockpiles. State reserves of cobalt and nickel have been quietly expanded, giving Beijing a buffer against global price volatility. In times of supply shocks, this provides flexibility that rivals like the EU and U.S. currently lack.
These reserves also serve as a geopolitical tool, allowing China to stabilize domestic markets even as global competitors struggle with shortages.
Implications for Global Competitiveness
China’s grip on battery metals is reshaping global competition. Automakers in Europe and the U.S. are scrambling to diversify supply chains, launching initiatives from Canada to Indonesia to reduce reliance on Beijing. Yet, replicating China’s integrated ecosystem will take years, if not decades.
For now, Chinese manufacturers enjoy both cost leadership and supply stability, positioning them as dominant players in the race for EV adoption worldwide.
Outlook
Battery metals remain at the heart of China’s industrial strategy. By controlling supply chains from mine to factory, Beijing ensures that its clean-tech ambitions remain resilient against geopolitical and market shocks. The challenge ahead will be to balance aggressive expansion with growing environmental and ethical concerns, both at home and abroad.
For global observers, one thing is clear: China’s dominance in battery metals is not just an economic story—it is a geopolitical one, shaping the future of energy and mobility far beyond its borders.
