CATL acquires a deposit of 2.7 million tons of lithium oxide

CATL has acquired the rights to exploit a lithium deposit in China. This acquisition comes at a critical moment for the market for electric car battery manufacturers, who are overwhelmed by the high demand they have been receiving for these components in recent months, as a result of the high interest in electric vehicles. Something that directly affects a lack of stock of batteries to sell or supply to manufacturers.

The race to launch new electric cars has given way to a new struggle to obtain lithium, an essential material for the manufacture of almost all current batteries. Lithium is actually being priced on the market by battery manufacturers, who have seen how its price has been increased by up to 280% throughout the year 2021; so far in 2022, its price has already increased an additional 127%according to data collected by Benchmark Mineral Intelligence.

This brutal price escalation is giving more than one headache, both to battery manufacturers and to the vehicle brands themselves, since the price increase goes from one step to another until it culminates in the electric car buyer himself. That is why many battery specialists are fighting to get hold of lithium deposits located in different parts of the planet.

CATL, the world’s largest battery manufacturer, has announced that it has offered an economic amount of 135 million dollars to the government of the region where the newly found lithium deposit in China sits. According to estimates, this operation may have a deposit estimated at around 2.66 million tons of lithium metal oxideaccording to the battery company itself in a recent statement.

The news released by CATL has come at the best possible time, since Elon Musk himself, during his conference on Tesla’s financial results for the first quarter of 2022, has placed special emphasis on the need for more investment in lithium mining, since it considers this to be a “fundamental limiting factor”. According to the CEO of Tesla, this lack of supplies could cause a much worse bottleneck in the very short term than the one we have already experienced with the microchip supply crisis. The CEO of Rivian also gave his opinion on this a few days ago, which is practically identical to that expressed by Musk.

It is clear that the battery market, together with that of electric cars, can become really complicated in the event that the manufacturers of these components do not find a solution to provide continuity of supply, since, let us remember, electric cars currently have a market share of a low percentage, a figure that will increase annually until the day comes when only electric vehicles are marketed.

Some days ago, CATL also announced its partnership with various state-owned companies based in Indonesia in a project valued at more than 6 billion dollars, which will carry out nickel extraction, various materials for batteries, manufacturing and recycling. This falls within the framework of the efforts that the Chinese company is making to ensure the supply of resources, as well as that of the battery devices themselves, to the different manufacturers.

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