Major lithium producers from China are creating global market glut in order to eliminate competing projects, according to a senior US official quoted by Reuters.
Jose Fernandez, Under Secretary for economic growth, energy and the environment at the US Department of State, said that China was producing much more lithium "than the world needs today, by far".
"That is an intentional response by the People's Republic of China to what we are trying to do", Fernandez said referring to the Inflation Reduction Act, the largest climate and energy investment package in US history valued at over $400 billion.
"They engage in predatory pricing... [they] lower the price until competition disappears. That is what is happening," he argued.
Lithium market prices have slumped 80% over the last year, escalating fears of a big supply glut. However, the price collapse is also affecting China as it has forced Chinese companies like battery giant CATL to suspend production at certain mines.
Fernandez said the low price "constrains our ability to diversify our supply chains on a broad, global scale" and also hurts countries such as Portugal that need investment to develop these industries.
"We want to help them, and we think we can... lithium mining companies, everywhere, have to survive this difficult phase that was created by predatory pricing," Fernandez added.
China's Premier Li Qiang in June used his address at a World Economic Forum meeting in Dalian to hit back at accusations from the United States and EU that Chinese firms benefit from unfair subsidies and are poised to flood their markets with cheap green technologies.
Theodor Lisovoy, Managing Editor, Rough&Polished
