Chinese Premier Li Qiang concluded his four-day tour of Australia on Tuesday with a visit to a Chinese-controlled lithium refinery in Perth.
This visit underscores China’s keen interest in Australia’s rich mineral resources, crucial for electric vehicles.
Highlighting Strategic Partnerships
Accompanied by a delegation of Chinese officials, Premier Li donned a white hard hat for a rainy-day tour of the Tianqi Lithium Energy Australia facility. This venture, with 51% Chinese ownership, encompasses both a lithium mine and a refinery.
Australia extracts 52% of the world’s lithium, with the majority exported as ore to China for further refining and use in electric vehicle batteries, among other applications.
Navigating Investment Sensitivities
Chinese investment in Australia’s mining industry remains a sensitive issue. In March, Australian Treasurer Jim Chalmers ordered five Beijing-linked shareholders to divest their combined 10% stake in Northern Minerals, citing concerns over Australia’s “national interest.”
This decision followed an attempt by the Chinese-linked Yuxiao Fund to increase its stake in Northern Minerals, which drew the attention of Australia’s Foreign Investment Review Board.
Northern Minerals extracts dysprosium, a rare earth mineral used in high-performance magnets for electric vehicles, an industry dominated by Chinese companies.
Balancing National Interests and Economic Cooperation
While Western nations may perceive China as posing “threats to national security,” Beijing frames its actions as “investing” and “contributing to development and environmental protection,” explains Marina Zhang, Associate Professor at the Australia-China Relations Institute at the University of Technology Sydney.
While it’s “very good” to aspire to develop supply chains independent of China, it’s unlikely to happen in the short or medium term, Zhang adds.