There has been concern recently about possible supply bottlenecks slowing down the energy transition, including shortages of critical minerals such as lithium and cobalt used to make electric car batteries. Chile’s decision to nationalise its lithium industry brings such fears into sharper focus. But the recent sharp decline in lithium prices, while reflecting a slowdown in electric vehicle sales in China, adds another perspective. Lithium is being looked for, and found, in new places, highlighted by a large new discovery of reserves in India. A shortage of raw materials might turn out not to be as big a problem as a shortage of the capacity to refine them – most of which is currently located in China. Just ask Elon Musk, who recently urged aspiring entrepreneurs to refine lithium rather than developing a new picture-sharing app.
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