Lithium's New Map: West Builds Non-China Supply Chains
The global lithium supply chain is bifurcating. While China still dominates refining, major deals show a clear trend toward diversification. South Korea's POSCO secured a $765 million, 30% stake in two of Mineral Resources' Australian mines, guaranteeing feedstock for its new Korean processing plant. This follows POSCO's 20-year offtake deal with Pilbara Minerals. In the US, projects are advancing: Lithium Americas is automating its Thacker Pass mine, and Stardust Power's Oklahoma refinery has secured 13,500 mt of LCE feedstock.
The Great Realignment
The global lithium market is undergoing a fundamental realignment. Long dominated by a simple Australia-to-China supply line for hard-rock lithium, new strategic partnerships are now creating parallel, non-Chinese supply chains. This shift is driven by Western allies seeking to reduce their dependence on China's near-total dominance of lithium refining.
Australia Diversifies
Australian miners are actively broadening their customer base. The CEO of PLS (Pilbara Minerals), Dale Henderson, speaking at the COP30 summit, called for government support to strengthen supply chain systems outside China.
This sentiment was solidified by Mineral Resources' (MinRes) landmark deal to sell a 30% stake in its Wodgina and Mt Marion lithium operations to South Korea's POSCO Holdings for $765 million. This move provides POSCO with crucial spodumene concentrate for its new downstream processing facilities in South Korea. The deal further deepens POSCO's Australian ties, as it already holds a 20-year offtake agreement with Pilbara Minerals. Adding to this trend, Covalent Lithium has also begun producing lithium hydroxide in Australia.
China Secures Its Position
China, meanwhile, is not idle. It recently granted antitrust approval for the Codelco-SQM lithium venture in Chile, one of the world's largest brine producers. However, this approval came with conditions: the venture must guarantee a base supply to Chinese customers under fair terms, effectively locking in its own supply from South America.
North American Projects Advance
The US is simultaneously accelerating its domestic capabilities. In Nevada, Lithium Americas is partnering with automation giant Emerson to develop its Thacker Pass project, which aims to produce 40,000 mt of battery-grade lithium carbonate annually in its first phase. In Oklahoma, Stardust Power's planned refinery (25,000 mtpa capacity) just completed its FEL-3 engineering report and, crucially, secured 13,500 mt of LCE feedstock from two North American lithium brine developers, Prairie Lithium and Mandrake Lithium.
European Ambitions Stall
In stark contrast, Europe's flagship project, Rio Tinto's Jadar deposit in Serbia, remains stalled. Despite holding enough lithium to supply ~40-45% of Europe's 2024 demand, the project was placed on care-and-maintenance due to blocked permits and intense local opposition. This highlights a major gap between the EU's Critical Raw Materials Act (CRMA) ambitions and the on-the-ground political and social realities of developing new mines.
Outlook
Neutral to Mildly Bullish (Lithium Price)
Despite soft EV demand pulling prices down from their 2022 highs, the short-term spot market in China is showing upward fluctuation. Average battery-grade lithium carbonate prices rose from 80,750 to 84,350 yuan/mt last week, driven by high market sentiment and upstream reluctance to sell. With downstream buyers still cautious, this suggests a sentiment-driven rally as the market seeks a floor. The accelerating development of ex-China supply chains and massive new drill intercepts in Quebec point to significant future supply, but this will take years to come online. The immediate sentiment is Neutral to Mildly Bullish.