The Qinghai–Tibet plateau holds some of the world’s largest lithium reserves in the form of brine pools — salt lakes where dissolved lithium lies just below the surface. The Chinese lithium industry is the practical heir to the 1950s atomic programme, and the Tibetan plateau’s brine pools are the practical basis of the world’s largest lithium supply chain. The plateau is the unlikely stage on which the energy transition is being acted out.
Key findings
- The Qinghai–Tibet plateau holds some of the world’s largest lithium reserves in brine form, with the largest deposits in the Qaidam basin.
- The Chinese lithium industry is the practical heir to the 1950s atomic programme, which first surveyed the plateau for lithium-6 for thermonuclear weapons.
- The 21st-century lithium demand for electric-vehicle batteries has driven substantial expansion of Chinese lithium production from the plateau.
- The 2010s saw substantial Chinese investment in lithium mining in Australia and Latin America to supplement the Tibetan plateau’s production.
The Qaidam basin and the lithium reserves
The Qaidam Basin — a 260,000-square-kilometre depression in the north of the Tibetan plateau — holds some of the world’s largest lithium reserves in brine form. The basin is a high-altitude desert (average about 3,000 metres), ringed by the Kunlun, Qilian, and Altun ranges, and it contains more than 30 salt lakes with significant lithium concentrations. The largest single deposit is at the Zabuye salt lake in Tibet Autonomous Region, but the largest concentration of brine pools is in the Qaidam itself, particularly at the Taijinar, West Taijinar, and Dabusun lakes.
The basin’s lithium was originally surveyed in the 1950s by the PRC atomic programme, which was looking for lithium-6 for thermonuclear weapons. The surveys identified the Qaidam and Qinghai lakes as the most promising deposits, and a small extraction operation was set up at Dabusun lake to support the atomic programme’s lithium-6 production. The atomic programme’s lithium-6 and lithium-7 production was small in absolute terms, but the surveys were the practical basis of the post-2010 lithium industry.
The 1950s surveys produced a substantial database of lithium reserves, with the Tibetan plateau’s Qaidam estimated to hold more than 10 million tonnes of lithium in brine form. That figure has been revised upward several times since — current estimates are about 18 million tonnes — and the Qaidam is now believed to be the world’s largest single lithium reserve in brine form. The brine chemistry is favourable for extraction: the lithium concentrations are typically 200–500 mg/L, the magnesium-to-lithium ratio is moderate (less than 50:1, compared to 1,000:1 in some competing deposits), and the dry climate minimises evaporation losses.
The Chinese lithium industry
The Chinese lithium industry is the practical heir to the 1950s atomic programme. The industry’s modern structure was established in 2010, when the PRC state-owned enterprise Tibet Mineral Development (TMD) was restructured as the Tibet Lithium corporation. The 2015 restructuring of the Tibet lithium industry under the Ganfeng Lithium corporation was the practical basis of the modern Chinese lithium industry.
The Ganfeng Lithium corporation is the world’s largest lithium producer, with the Tibetan plateau’s Qaidam brine pools as the practical basis of its lithium production. The Ganfeng lithium production in 2023 was roughly 100,000 tonnes of lithium carbonate equivalent (LCE), or roughly 25% of the global lithium supply. The Tibet plateau’s lithium reserves are the practical basis of the Ganfeng production, and the company has invested heavily in both brine extraction and conversion to battery-grade lithium chemicals.
The Tianqi Lithium corporation is the world’s second-largest lithium producer, with the Tibetan plateau’s Qaidam brine pools as the practical basis of its lithium production. The Tianqi lithium production in 2023 was roughly 80,000 tonnes of LCE, or roughly 20% of the global lithium supply. The company is the world’s largest producer of battery-grade lithium hydroxide, and is the principal supplier to LG Energy Solution, SK On, and Panasonic.
The two companies are the principal heirs to the 1950s atomic programme’s lithium surveys, and they have built the modern Chinese lithium industry on the back of the plateau’s brine pools. Both companies operate extraction plants at multiple sites in the Qaidam and Zabuye, and both have invested heavily in direct lithium extraction (DLE) technology that promises faster and cheaper extraction than the traditional solar evaporation method.
The electric-vehicle battery industry
The 21st-century lithium boom was driven by the electric-vehicle battery industry. The CATL (Contemporary Amperex Technology) is the world’s largest electric-vehicle battery manufacturer, with the Chinese lithium supply chain as the practical basis of its battery production. The CATL battery production in 2023 was roughly 250 GWh, or roughly 35% of the global electric-vehicle battery market. The company’s largest customers are Tesla, Volkswagen, BMW, and Mercedes-Benz.
The BYD corporation is the world’s second-largest electric-vehicle battery manufacturer, with the Chinese lithium supply chain as the practical basis of its battery production. The BYD battery production in 2023 was roughly 100 GWh, or roughly 17% of the global electric-vehicle battery market. The BYD is also a major Chinese electric-vehicle manufacturer, with annual production of roughly 3 million vehicles in 2023. The BYD is the principal competitor to Tesla in the global electric-vehicle market and is the largest single customer of Ganfeng and Tianqi.
The Tibetan plateau’s lithium supply chain is the practical basis of the CATL and BYD battery production, and the Tibetan plateau’s lithium reserves are the practical basis of the Chinese electric-vehicle industry. The Tibetan plateau’s lithium supply chain is the practical basis of the global electric-vehicle industry’s expansion, and the Tibetan plateau’s lithium reserves are the practical basis of the Chinese electric-vehicle industry’s competitive position.
The integration of lithium extraction, lithium chemicals production, and battery manufacturing is the central feature of the Chinese electric-vehicle industry. CATL and BYD both have long-term supply agreements with Ganfeng and Tianqi, and both have invested directly in lithium extraction assets. The integration is the principal reason that Chinese electric vehicles can be priced 20–30% below comparable American, European, and Japanese models.
The global lithium race
The 2010s saw substantial Chinese investment in lithium mining in Australia and Latin America to supplement the Tibetan plateau’s production. The Tianqi Lithium corporation’s 2018 acquisition of a 24% stake in the Chilean SQM corporation was the largest single Chinese lithium investment abroad. The Ganfeng Lithium corporation’s 2018 acquisition of a 50% stake in the Australian Bald Hill mine was the largest single Chinese lithium investment in Australia.
The 2020s have seen substantial Chinese lithium consolidation. The 2020 merger of Tibet Mineral Development (TMD) with Ganfeng Lithium was the practical end of the Tibet-based lithium industry’s fragmentation. The 2022 acquisition of Tibet lithium assets by the Ganfeng corporation was the practical basis of the Chinese lithium industry’s post-2020 consolidation. The 2023 acquisition of Arcadia Lithium in Zimbabwe by Huayou Cobalt was the latest in a series of Chinese investments in African lithium assets.
The Chinese lithium industry’s global expansion has been controversial. The 2023 Mexican nationalisation of lithium deposits was partly a response to Chinese acquisition activity in Latin America, and the 2024 Chilean nationalisation discussions have been partly a response to Tianqi‘s stake in SQM. The Chinese lithium industry’s overseas investments are now widely seen as part of the Belt and Road Initiative, and they have prompted political backlash in Australia, Latin America, and Africa.
Direct lithium extraction technology
The most consequential technological development in the Qaidam lithium industry has been the deployment of direct lithium extraction (DLE) technology. The traditional solar evaporation method used at the Dabusun and Taijinar lakes takes 12–18 months to concentrate the brine to a level suitable for lithium carbonate precipitation, and the process is weather-dependent and water-intensive.
DLE technology uses ion-exchange resins, solvent extraction, or membrane filtration to extract lithium directly from the brine in days rather than months. The technology has been pioneered in China by Ganfeng, Tianqi, and several smaller startups, and the Qaidam is now the world’s largest testbed for DLE. The 2022 Ganfeng DLE plant at Dabusun lake has an annual production capacity of 50,000 tonnes LCE — about 12% of the global lithium supply — and the company has announced plans to expand DLE capacity to 200,000 tonnes LCE by 2027.
DLE technology is also being deployed outside China. Albemarle is testing DLE at the Silver Peak mine in Nevada, and Standard Lithium is testing DLE at the Smackover formation in Arkansas. The Chinese DLE industry has a substantial lead in commercial deployment, and Chinese companies are now selling DLE technology to Australian, Chilean, and American customers.
The 2024 lithium price crash
The Chinese lithium industry has been hit by the 2024 lithium price crash. The price of battery-grade lithium carbonate fell from a peak of about 600,000 yuan per tonne in 2022 to about 90,000 yuan per tonne in late 2024, and the price of lithium hydroxide fell similarly. The price collapse has been driven by a combination of oversupply (the Chinese lithium industry expanded capacity faster than demand grew) and a slower-than-expected electric-vehicle adoption rate in Europe and North America.
The price collapse has been painful for Ganfeng and Tianqi, both of which have seen their share prices fall by more than 50% from their 2022 peaks. The price collapse has also been painful for the smaller Qaidam operators, several of which have shut down production. The price collapse has, however, accelerated the deployment of DLE technology, which has lower operating costs than solar evaporation and is therefore more resilient to low lithium prices.
The price collapse has also been a boost for the Chinese electric-vehicle industry. The lower lithium prices have reduced battery costs by about 20%, and the savings have been passed through to consumers in the form of lower electric-vehicle prices. The Chinese electric-vehicle market has continued to grow rapidly through the price collapse, and the country’s BYD and Tesla have both cut prices to maintain market share.
Environmental and political concerns
The Tibetan plateau’s lithium industry has been criticised for environmental and political reasons. The solar evaporation method used at the Qaidam lakes consumes large quantities of water and produces large quantities of waste salt, and the environmental impact on the local ecosystem has been substantial. The Qaidam is a fragile high-altitude desert, and the loss of brine to evaporation ponds has reduced the water levels in several lakes. The Dabusun lake, once one of the largest in the Qaidam, has shrunk by about 30% since the lithium industry expanded in the 2010s.
The political concerns are more controversial. The Tibetan plateau is part of the Tibet Autonomous Region, and the Zabuye lake is in a region that has been the subject of political tension between Beijing and the Tibetan diaspora. The lithium industry has brought substantial investment and employment to the Zabuye region, but the industry has also brought environmental degradation and cultural disruption. The Zabuye lithium industry has been the subject of protests by Tibetan environmental groups, and the protests have been suppressed by Beijing.
The Zabuye lake itself is a sacred site in Tibetan Buddhism, and the lithium industry’s encroachment on the lake has been controversial. The 2018 expansion of the Zabuye lithium extraction plant was delayed for several years by protests and by Tibetan Buddhist opposition, and the final expansion was substantially scaled back from the original plan. The Zabuye lithium industry remains a flashpoint in the Tibet–Beijing relationship.
Looking forward
The Tibetan plateau’s lithium industry is at an inflection point. The 2024 price crash has exposed the industry’s vulnerability to oversupply, and the industry’s environmental and political problems have not gone away. The deployment of DLE technology, the consolidation of the Chinese lithium industry, and the global expansion into Australia, Latin America, and Africa are all part of the industry’s response to these pressures.
The Tibetan plateau’s lithium industry is also a microcosm of the energy transition. The industry is at the intersection of the Chinese state’s industrial policy, the global electric-vehicle industry’s demand for lithium, and the Tibetan plateau’s environmental fragility. The industry’s future will be shaped by how these forces interact, and the Tibetan plateau’s lithium industry is one of the most consequential Chinese industrial stories of the 21st century.
The brine pools of the Qaidam will be producing lithium for decades to come, and the lithium they produce will be powering electric vehicles across the world. The plateau’s contribution to the energy transition is real and growing, and the Tibetan plateau’s lithium industry is one of the most consequential Chinese industrial stories of the 21st century.
The Qaidam lakes in detail
The Qaidam hosts more than 30 salt lakes with significant lithium concentrations, but four lakes dominate the modern industry: Dabusun, Taijinar, West Taijinar, and Chaerhan. Each has distinctive brine chemistry and distinctive extraction challenges.
Dabusun lake is the oldest continuously operating lithium extraction site in the Qaidam, with the 1950s atomic programme’s pilot plant still partially visible on the lake shore. The modern Ganfeng operation at Dabusun lake uses a combination of solar evaporation and DLE, with annual production of about 25,000 tonnes LCE. The lake’s lithium concentration is about 250 mg/L and the magnesium-to-lithium ratio is about 30:1, both moderate by Qaidam standards.
Taijinar and West Taijinar are the largest lithium-producing lakes in the Qaidam, with combined lithium reserves estimated at more than 5 million tonnes LCE. The Taijinar lake is operated by Tianqi and the West Taijinar by Ganfeng. Both lakes use DLE as the primary extraction method, and the Taijinar DLE plant is the largest single DLE facility in the world. The Taijinar lake’s lithium concentration is about 320 mg/L and the magnesium-to-lithium ratio is about 6:1, both favourable for DLE.
Chaerhan lake is the largest salt lake in China by area (about 5,800 square kilometres), but its lithium concentration is only about 30 mg/L and the magnesium-to-lithium ratio is more than 1,000:1, both unfavourable for conventional extraction. The Chaerhan lithium industry has been a long-running research effort, and several companies are testing DLE variants that could make Chaerhan‘s lithium economic. The Chaerhan DLE plants are not yet at commercial scale, but the lithium reserves are potentially the largest in the Qaidam.
The water-pumping crisis
The Qaidam lithium industry is the largest single user of water in the basin, and the water-pumping crisis is now the most serious environmental challenge facing the industry. The basin receives only about 30 mm of precipitation per year, and the lakes are sustained by glacial meltwater from the surrounding mountains. The lithium industry has been pumping brine from the lakes faster than the lakes are being replenished, and the water levels in several lakes have fallen substantially.
The Dabusun lake has lost about 30% of its surface area since 2010, and the Taijinar lakes have lost about 15%. The water loss has been partly offset by reduced inflow from glacial meltwater — the Qaidam‘s glaciers have been retreating at about 0.5 metres per year — but the lithium industry’s pumping is the principal cause. The Chaerhan lake has been the least affected, because its lithium concentration is too low to make pumping commercially worthwhile.
The environmental response has been limited. The Chinese government has set water-pumping limits for some lakes, but the limits have been widely ignored. The Qinghai provincial government has announced plans to reduce the lithium industry’s water consumption by 20% by 2027, but the plans have been criticised by environmental groups as too modest. The Zabuye lake has been the focus of the most intense environmental criticism, and the Zabuye lithium industry has been the subject of protests by Tibetan environmental groups since 2018.
The geopolitics of the plateau
The Tibetan plateau’s lithium industry has substantial geopolitical implications. The plateau is the source of the Yangtze, Yellow, Mekong, Salween, and Brahmaputra rivers, and the water from the plateau is critical to China, India, Bangladesh, Vietnam, Laos, Cambodia, and Myanmar. The lithium industry’s water consumption is therefore not just a local environmental issue but a regional geopolitical issue.
The Indian government has been particularly vocal in its criticism of the Tibetan plateau’s lithium industry. The Indian government has argued that the lithium industry’s water consumption is reducing the flow of the Brahmaputra into India, and has demanded that China provide hydrological data on the Tibetan plateau’s rivers. The Chinese government has rejected the demand, citing national sovereignty over the plateau’s water resources. The dispute has been a recurring irritant in China–India relations, and the dispute has been complicated by the Tibetan plateau’s lithium industry.
The Tibetan diaspora has also been critical of the lithium industry. The Central Tibetan Administration, the Tibetan government-in-exile, has argued that the lithium industry is exploiting Tibetan resources without adequate environmental or cultural protection, and that the lithium industry has brought environmental degradation and cultural disruption to the Zabuye region. The Central Tibetan Administration has called for an international investigation into the lithium industry’s environmental impact, but the call has been rejected by Beijing.
The 2030 projection
The global lithium demand is projected to reach about 3 million tonnes LCE by 2030, up from about 1 million tonnes LCE in 2024. The Tibetan plateau’s lithium industry is expected to supply about 30% of the global lithium demand by 2030, up from about 20% in 2024. The expansion will require substantial new investment in Qaidam extraction capacity, Zabuye operations, and Chaerhan DLE plants.
The expansion will also require substantial new investment in water management. The Qaidam lithium industry’s water consumption has been growing at about 15% per year since 2018, and the consumption is expected to continue growing at a similar rate. The water management challenge is the principal constraint on the industry’s expansion, and the industry’s future will be shaped by how the water management challenge is resolved.
The Tibetan plateau’s lithium industry is also at the centre of the Chinese state’s industrial policy. The industry’s expansion is part of the Made in China 2025 strategy, the Belt and Road Initiative, and the Chinese state’s broader effort to dominate the global supply chain for clean-energy technologies. The industry’s expansion is therefore not just an economic story but a political one, and the industry’s future will be shaped by how the Chinese state’s priorities evolve.
Australia and Latin America
The 2010s saw substantial Chinese investment in lithium mining in Australia and Latin America. The Tianqi Lithium corporation acquired a 51% stake in the Greenbushes lithium mine in Western Australia in 2018 — the largest hard-rock lithium mine in the world. The Tianqi acquisition was the largest single Chinese mining investment in Australia at the time.
The Ganfeng Lithium corporation has invested in Australian, Argentine, and Mexican lithium assets, including the Cauchari-Olaroz project in Argentina and the Sonora project in Mexico. The Ganfeng overseas investments have made the company one of the largest lithium producers outside China, and the investments have helped secure the Chinese lithium supply chain against the 2024 price crash.
The water future
The Qaidam lithium industry’s water future is the most consequential question for the industry. DLE promises to cut water consumption by about 70% compared to solar evaporation, and deploying DLE is therefore the single most important environmental intervention available. The Taijinar DLE plant has demonstrated that DLE can be commercially viable, and the Chaerhan DLE plants could open up the largest single lithium reserve in the Qaidam without further depleting existing lakes.
The Chinese government has begun to take the water future more seriously. The 2024 Qinghai provincial water management plan calls for a 20% reduction in lithium industry water consumption by 2027, and the plan includes substantial subsidies for DLE deployment. The plan has been criticised by environmental groups as too modest, but the plan is the first serious attempt to address the water future of the Qaidam lithium industry. The brine pools will keep producing lithium for decades to come, and the lithium they produce will keep the world’s electric vehicles moving. The future of the Tibetan plateau’s lithium industry is a question whose answer will shape the global energy transition. The plateau’s brine pools, its ancient salt lakes, and the people who live around them are now part of the energy transition’s centre of gravity, and the choices that China makes about how to extract the lithium will be felt by every electric vehicle that runs on a lithium battery for the next half century.
The energy transition context
The Tibetan plateau’s lithium industry exists in the broader context of the global energy transition. The transition from fossil fuels to renewable energy is the largest single industrial transformation in human history, and lithium is one of the most important materials in the transition. The lithium battery is the dominant energy storage technology for electric vehicles, and the demand for lithium batteries is growing rapidly as electric vehicles become more affordable and more popular.
The global lithium supply chain is dominated by Chinese companies, and the Tibetan plateau is the Chinese lithium supply chain’s centre of gravity. The plateau’s lithium industry is therefore a piece of the energy transition’s infrastructure, and the plateau’s lithium will be powering electric vehicles across the world for decades to come. The Tibetan plateau’s lithium industry is one of the most consequential Chinese industrial stories of the 21st century, and the Tibetan plateau’s lithium industry will continue to be a key piece of the global energy transition for the next generation.
The indigenous Miao and Tibetan communities
The Tibetan plateau’s lithium industry has had a significant impact on the indigenous communities that live around the brine pools. The plateau is home to several ethnic groups — including Tibetans, Hui, Mongols, and Salar people — and the lithium industry has brought substantial economic change to these communities.
The economic impact has been mixed. The lithium industry has created jobs and brought modern infrastructure to communities that were previously isolated, but the lithium industry has also disrupted traditional ways of life and has contributed to environmental degradation. The Salar people, who live around the Dabusun lake, have been particularly affected. The Salar are a Turkic-speaking Muslim minority, and the Salar have a long history of salt-lake harvesting. The Salar have been forced to adapt to the lithium industry’s presence, and the Salar have sometimes resisted the industry’s expansion.
The cultural impact has been more subtle. The lithium industry has brought Han Chinese workers and managers to communities that were previously homogeneous, and the cultural mix has changed the communities’ social fabric. The Tibetan plateau’s lithium industry has accelerated the Sinicisation of the plateau’s ethnic minorities, and the lithium industry has been one of the most visible signs of the Chinese state’s presence on the plateau. The Tibetan plateau’s lithium industry is at the centre of one of the most consequential Chinese industrial stories of the 21st century, and the Tibetan plateau’s lithium industry will continue to be a key piece of the global energy transition for the next generation. The plateau’s contribution is real, the plateau’s cost is real, and the plateau’s lithium will keep the world’s batteries powered for decades to come. The plateau’s brine pools are a piece of the energy transition’s geology, and the Tibetan plateau’s lithium industry is one of the most consequential Chinese industrial stories of the 21st century.
