Chinese lithium company halts tech exports as trade tensions build

Standard Lithium

19/02/2025 24:01

(Repeats story filed on Feburary 18 without changes)

        * 
      Jiangsu told customers it would halt exports of lithium
processing tech from February 1
    

        * 
      China announced a proposal for export controls last month 
    

        * 
      Proposal is having a "chilling effect" across industry,
lawyer
says
    

  
    By Ernest Scheyder and Lewis Jackson
       Feb 18 (Reuters) - A Chinese company has stopped
exporting a piece of equipment used to process the electric
vehicle battery metal lithium, in the clearest sign yet
manufacturers are already implementing export controls proposed
by Beijing. 
    Jiangsu Jiuwu Hi-Tech  300631.SZ  told customers last month
it would stop exporting a piece of filtration equipment known as
a sorbent from February 1, according to a source with direct
knowledge of the matter and documents seen by Reuters.
    China is the world's largest producer of sorbents, used to
extract lithium from brines or other solutions containing the
battery metal, although its market size can be difficult to
ascertain given Beijing's reticence to share data, analysts say.
     The decision by Jiangsu shows Beijing's threat, made public
in January, to restrict the export of some battery and lithium
technology, including sorbents, is changing behaviour even
though the change is for now only a proposal. If approved,
companies would need government licenses for overseas sales.
     An executive at another lithium extraction technology
company, also speaking on condition of anonymity, said Jiangsu
and Sunresin New Materials  300487.SZ , another major sorbent
producer, are negotiating with the government over the proposal.
    Representatives for Jiangsu and Sunresin did not respond to
questions from Reuters. Sunresin's chairman said a month ago the
company's overseas expansion plans included transferring
technology to customers.
    Beijing has not publicly discussed the proposal since it was
released last month.
    Some in the industry consider it is already a deterrent to
exporting listed items to unfriendly countries. A China-based
international lawyer with clients in the clean energy industry
said it was having a "chilling effect". 
    Officials with China's Ministry of Commerce have visited
several companies to discuss the proposal and in one case,
warned against proceeding with a $1 billion export deal that is
being negotiated, the lawyer said, speaking on condition of
anonymity because of the sensitivity of the issue. 
     Banks are also asking for extra approvals before signing
off on export finance for items on the list, the person added.
    China's Ministry of Commerce did not respond to questions
from Reuters.
While it is unclear how restrictive the curbs would be if
implemented, the proposal alone underscores Beijing's
willingness to use its dominance of the mining and processing of
lithium and many other critical minerals as leverage in its
escalating trade war with Washington.
China's antimony export ban, announced last December, has
already affected the Western auto market, Reuters has reported.
    A spokesperson for Tianqi Lithium Energy Australia, the
joint venture between China's Tianqi  002466.SZ  and Australia's
IGO  IGO.AX  that controls the world's largest lithium mine and
a major lithium refinery, said it was taking advice on Beijing's
export proposal and considering its options.
            
    BUILDING AN ALTERNATIVE SUPPLY CHAIN
    In the near term, any disruption of Chinese sorbent exports
may affect plans by Western oil producers to extract lithium
from their operations by limiting their technological options.
Among them, Exxon Mobil  XOM.N  has studied the potential use of
Chinese processing equipment at its planned lithium operations,
in the U.S. state of Arkansas, two sources familiar with the
plans said. Exxon declined to comment. 
Koch Industries, the largest investor in Arkansas lithium
developer Standard Lithium  SLI.V , agreed in 2023 to use
sorbents from China's Xi'an Lanshen New Material Technology in
its North American operations.
    A representative for Koch declined to comment. 
Several Western sorbent producers say they may be able to take
market share, although none of them has the market experience of
Chinese rivals and their equipment has yet to reach commercial
production.    
"We have to completely change the technologies and innovate in
production and processing, and we have to do it without being
beholden to China, which has a 20-year head start and controls
the game," said Brian Menell, CEO of TechMet, which invests in
Western mining companies and lithium equipment producers.
Francis Wedin, chairman of Vulcan Energy Resources  VUL.AX ,
which has developed its own sorbent technology that it plans to
use in Germany, said would-be lithium producers were lining up
for help.
    "Over the past few weeks we've gotten inundated by companies
wanting to approach us and buy our sorbent and license the
technology," he said declining to name the companies but saying
they included large lithium companies from North and South
America.

 (Reporting by Ernest Scheyder in Houston and Lewis Jackson in
Beijing; additional reporting by Melanie Burton in Melbourne and
Amy Lv in Beijing; editing by Veronica Brown and Barbara Lewis)
 ((mailto:lewis.jackson@thomsonreuters.com; +86 139 1179 6497;
Reuters Messaging: Wechat: LewisJackson92))