(Bloomberg) — If it’s grown, drilled or dug up, chances are there’s not enough of it in China. Beijing’s ability to manage the mismatch between its scarce natural resources and vast industrial output is now playing out in the market for lithium, a mineral crucial to the world’s transition away from fossil fuels.
It’s an effort complicated by skyrocketing prices, geopolitical tensions and the environmental devastation that can be wrought by a pell-mell approach to extraction. China is the world’s biggest producer of new energy vehicles but holds only a modest slice of global reserves of lithium, used in the batteries that power electric cars.
In that regard, lithium is of apiece with many of the commodities foundational to a modern economy — think crude oil for fuel, iron ore to make steel, or soybeans to feed pigs — where China is overly reliant on foreign supplies for its often world-beating production.
A government inspection last month, which has shuttered some producers at a lithium mining hub in eastern China, is a clear signal that Beijing is turning its attention to better marshaling its domestic resources of the mineral, against a backdrop of record prices and short supply across the globe.
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