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Canada surpasses China to lead global lithium-ion battery supply chain rankings

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By Colin Hay - 
Canada lithium ion battery top spot BloombergNEF

For the first time, Canada has raced past China for the top spot in BloombergNEF’s (BNEF’s) global lithium-ion battery supply chain ranking.

Backed by a surge in lithium exploration and powerful government support, Canada’s consistent manufacturing and production advances, along with its strong ESG credentials have helped it become a leader in forming the battery supply chains of the future.

The success comes just months after the Canadian government launched a $1.7 billion Critical Minerals Infrastructure fund (CMIF) to support the development of the country’s critical minerals sector.

The CMIF is providing financing for enabling infrastructure like roads, rail, power transmission lines and ports to connect critical mineral projects to markets, potentially benefitting junior exploration and development companies focused on critical minerals by helping fund infrastructure costs and improving project economics.

Canada’s integration with US automotive sector

According to the BNEF, strong integration with the US automotive sector means Canada is also a big winner of the ‘friendshoring’ ambitions of the Inflation Reduction Act (IRA).

Overall, North America’s supply chain has been very successful due to strong policy commitment and implementation, with Canada and the US claiming two of the top three positions.

Mexico, the only country to make progress in all supply chain categories assessed by BNEF, rose an impressive nine positions to 19th in the ranking.

Scaling up a domestic electric vehicle industry will be difficult for Mexico, however, although the country’s existing mining and automotive activities are good starting points.

The US IRA has played a crucial role in boosting Mexico’s prospects when it comes to the electric vehicle and energy storage sectors but BNEF suggests the government will need to actively support the budding sector to make these improvements sustainable.

Supply chain spending hits $154b

“Global investment in the clean energy supply chain, including equipment factories and battery metals production, hit a new record at $154b this year,” said BNEF’s head of metals and mining Kwasi Ampofo.

“That said, trade relations will be an interesting factor to monitor in 2024 as foreign policy efforts in the US and EU continue to make it difficult for international companies to operate in major markets like China.”

“Additionally, all African countries included in the ranking – South Africa, Morocco and the Democratic Republic of the Congo – improved their upstream presence,” Mr Ampofo added.

“Recognising the opportunity in their rich mineral deposits, African nations have worked with global partners to expand their mining sectors and start new manufacturing facilities.”

To ensure local supply chains can emerge, countries in the region need to continue to maximise the value-add steps like metals refining and battery precursors in their materials value chain.”

Asia showing improvement

BNEF’s research found that South and South East Asia have achieved the most improvement compared to last year, with India and Indonesia leading the way for supply chain growth.

With a number of projects set to be commissioned through the year, the region’s momentum is expected to continue, leading to an adjustment in the global supply chain.

Ellie Gomes-Callus, metals and mining associate at BNEF, said the rapid development of targeted supply chain roadmaps has helped emerging economies race through the ranks.

“But it is vital for these nations to maintain momentum in order to realise their full potential.”

BNEF also noted that, while China still has the strongest established supply chain, the increasing importance of sustainability across the lifecycle of lithium-ion batteries means the region must take a more proactive approach to tackle ESG issues to benefit its supply chain in the long term.