Boris Johnson sent China warning as Xi eyes up UK’s £285m lithium goldmine

Elon Musk building world’s largest lithium ion battery plant

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Minister and investors fear China’s growing monopoly in the lithium mining market poses a threat to Britain’s national security. Their warning to the Prime Minister comes after the Chinese giant Ganfeng Lithium was reportedly edging towards a takeover of the London-based Bacanora Lithium PLC. According to a report published earlier this summer, the Jiangxi-based firm was eyeing up a £285million deal that would grant it access to the UK’s valuable lithium stores.

In February, Ganfeng Lithium already controlled a 17.5 percent stake in Bacanora but The Telegraph said plans were set in motion to nearly double this stake.

However, experts warned at the time the deal was “deeply worrying” and former Conservative party leader, Sir Iain Duncan Smith called on the Government to “block it”.

Because of its unique physical and chemical properties, lithium and its compounds can pack a lot of energy into a very small space.

This makes lithium the ideal material for batteries that power a wide range of items, from smartphones to electric cars.

Last year, China was already estimated to dominate the world’s production of electric batteries and the monopoly has only strengthened since.

A 2019 report by Bloomberg claimed more than half of the world’s passenger vehicles will be electric by 2040 – and this could be a major source of revenue for China.

That same year, the London-based Benchmark Mineral Intelligence estimated Chinese companies accounted for about 80 percent of the world’s raw materials for batteries.

The state-owned Xinhua news agency said in August last year: “Looking at the global automotive industry chain, China, for the first time, has taken the lead in the world in the manufacturing of key parts.”

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Minister fear China’s rapid expansion in the sector will put the UK’s own interests at risk.

Sir Iain was quoted by The Telegraph saying: “Ministers need to call this in. They have too often been asleep on the watch.

“These are strategic industries and there is nothing more strategic now than rare earth materials, which are the oil of the 21st century.

“China has been snapping up reserves all over the world.

“We need to ensure this deal does not further increase the power of the undemocratic, dictatorial regime in Beijing.”

On Monday, Ganfeng Lithium said it was on the cusp of a shareholder take over after securing 72.9 percent support, including the 28.9 percent it had already owned.

For the takeover to go ahead, the Chinese firm will need to get 75 percent of shareholders to back the deal.

Chine firms have been securing lithium mines all over the globe thankst to their acquisition of foreign companies.

According to S&P Global, Chinese companies 6.4 million tons of lithium in reserves and resources by October 18 this year.

This was estimated to match the 6.8 million tons of lithium “acquired by all companies in 2020”.

Bacanora Lithium is presently running lithium projects in Mexico, Germany, China and Japan.

Express.co.uk has asked the company to comment.

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