Since the end of 2022, there has been a rush towards lithium, which has become the new white gold, an essential material for fueling the revolution in electric vehicles, the market of which has exploded in recent years with a dizzying price increase of nearly 900% in 2022.
According to the United States Geological Survey (USGS), in 2008, batteries accounted for 20% of the market share for this alkali metal. In 2030, this figure would reach 85%.
In view of all these forecasts, controlling the supply of lithium has become essential for the United States.
Faced with the enthusiasm aroused, the European Union has just sealed a strategic partnership with Chile.
The agreement aims to guarantee Europe privileged access to Chile’s lithium and copper reserves, while the latter will benefit from an injection of funds to stimulate its industry.
In addition, the two parties have committed to work together in five key areas: the integration of sustainable commodity value chains, cooperation in research, alignment with international environmental standards, investment in employment and infrastructure, as well as the strengthening of education
For Europe, this strategic partnership is an unprecedented opportunity to secure a stable source of lithium and copper to power its transition to electric transport.
Through this agreement, Europe is also seeking to counter the influence of China which, to date, has already signed agreements with several major producers of raw materials.
Chile, for its part, sees in this agreement a means of giving new impetus to its economy by capitalizing on its important natural reserves.
In addition, several challenges arise regarding the future of lithium; market stability remains uncertain. Thus, some experts are concerned about the ability to meet the growing demand for lithium.
The average price of lithium reached a peak of 80,000 euros per ton in November 2022. Since then, the price has fallen rapidly: it has even almost been halved in a few weeks, according to the monitoring of cnevpost.com, published on March 20, 2023. It remains well above the price of lithium in 2020, which then displayed it at just over 5,500 euros per ton.
However, by taking a stand with the cooperation agreement with Chile, Europe says it is ready to take up the challenge and seize the opportunities to guarantee a sustainable energy future.
