Chinese Miners Eye Overseas Deals After Battery Metals Slump

Zijin and CMOC Group set sights on overseas expansion amid a Western pullback, potentially helping China tighten its grip on critical minerals.

A mound of ore at a Talison Lithium Ltd. site, a joint venture between Tianqi Lithium Corp. and Albemarle Corp. in Greenbushes, Australia.

Photographer: Carla Gottgens/Bloomberg

ByMark BurtonandAnnie Lee

26 March 2024 at 8:33 pm AWST

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Welcome to Energy Daily, our guide to the energy and commodities markets powering the global economy. Today, reporters Mark Burton and Annie Lee assess the consequences of ambitious growth plans by Chinese miners of battery metals. To get this newsletter in your inbox, clickhere.

Battery metal prices are on the floor, and massive expansions by Chinese miners have been instrumental in driving them lower. Now, with many Western rivals cutting output or shutting down entirely, they want to get even bigger.

Zijin Mining Group Co., China’s most valuable producer, said this week it’splanning acquisitionsof “ultra-large mines or mining companies with global influence” to boost business in lithium and other metals.

CMOC Group, which last year overtook Glencore as the world’s top cobalt producer, said the return of “rational” pricing in battery metals opened a window for global acquisitions.

Attention will now turn to what Tianqi Lithium Corp. and Ganfeng Lithium Corp., which report results in coming days, say on the matter.

The miners’ opportunistic growth plans should givepauseto traders, investors and rival producers hoping for an imminent rebound in battery-metal prices. They also may add to thealarmsin Western capitals about China’s stranglehold on many critical minerals.

Chen Jinghe, chairman of Zijin Mining Group Co. Ltd., expects political resistance to the company’s expansion plans.Photographer: Dwayne Senior/Bloomberg

Even with landmark spending packages rolled out by the US and European Union, there’s a strong chanceChina’s dominancein cobalt, nickel and lithium will be greater in a few years. Tsingshan Holding Group Co., the world’s top nickel producer, is also pushing ahead with expansion.

Zijin, for one, expects resistance. Chairman Chen Jinghe said the company “will be targeted for sure” as geopolitical tensions become “increasingly grim.”

Even so, these are raw materials that will be needed in ever-greater volumes as the energy transition gathers pace, regardless of who mines them.

Efforts to curb China’s expansion throughdiplomaticand legal mekeep paceans will likely continue, but for the good of the planet, politicians’ time might be better spent focusing on efforts to.

--Mark Burton, Bloomberg News