Europe Pushes Lithium Supply Away From China
A Dutch lithium producer is accelerating plans to build a Western focused battery materials supply chain as Europe looks to reduce its reliance on China for critical minerals essential to electric vehicles. AMG Critical Materials NV said it aims to process battery grade lithium across Brazil, Portugal, and Germany, creating an integrated route that avoids Chinese refining. Company executives describe the strategy as a long term response to China’s dominance in lithium processing, which has left European manufacturers exposed to supply disruptions and geopolitical risk. For years, Chinese refiners have been the primary option for converting lithium bearing minerals into high purity chemicals used in EV batteries, giving Beijing significant leverage over global clean energy supply chains.
Currently, lithium extracted from AMG’s Brazilian operations is shipped to China for processing before being sent back to Europe for final conversion into lithium hydroxide, a key cathode input. The company wants to eliminate that step by building refining capacity closer to both mines and end markets. Processing facilities in Brazil and Portugal would allow raw material to be upgraded before entering Europe, while Germany would remain a hub for final battery grade production. Executives argue this structure would lower transport costs, improve supply security, and reduce exposure to export controls or trade restrictions linked to China. The plan reflects a broader European push to localise strategic industries as energy transition policies increase demand for battery materials.
Europe remains far behind China in lithium refining capacity despite ambitious electrification targets. While major lithium deposits are spread across South America and Australia, China has built a commanding lead in processing expertise and industrial scale. European policymakers are now attempting to close that gap through domestic mining projects, permitting reform, and financial incentives. AMG is also backing upstream development in Portugal, where large spodumene reserves are being positioned as a cornerstone of Europe’s future battery supply. Industry analysts note that building competitive refining capacity is complex and capital intensive, requiring years of investment before reaching meaningful scale, even as demand growth remains uneven.
Challenges remain as market conditions soften and project timelines stretch. AMG’s German lithium hydroxide plant is now expected to reach full capacity later than originally planned, reflecting slower EV demand growth and extended qualification processes by automakers. Despite delays, executives maintain that European production will ultimately be more cost effective than routing material through China once scale is achieved. The company’s strategy highlights how China’s central role in battery materials is increasingly viewed as a strategic vulnerability rather than a commercial convenience. As competition over clean energy supply chains intensifies, Europe’s ability to develop alternatives will shape its economic and industrial autonomy in the coming decade.
