China played a great game on lithium and we’ve been slow to react: CEO

China is leading the way when it comes to lithium — and the rest of the world has not been quick enough to respond to its dominance, according to the CEO of American Lithium.

Speaking to CNBC’s “Squawk Box Europe” Monday, Simon Clarke discussed how China had secured its position of strength within the industry.

“I just think the Chinese have — I mean you have to take your hat off, they’ve played a great game,” he said.

“For decades, they’ve been locking up some of the best assets across the world and quietly going about their business and developing knowledge on building lithium-ion technology, soup to nuts,” he added. “And we’ve been very slow to react to that.”

He added that the U.S.’ Inflation Reduction Act, and a number of other measures, meant people were “starting to wake up to it.”

Alongside its use in cell phones, computers, tablets and a host of other gadgets synonymous with modern life, lithium — which some have dubbed “white gold” — is crucial to the batteries that power electric vehicles.

China is certainly a dominant force within the sector.

In its World Energy Outlook 2022 report, the International Energy Agency said the country accounted for roughly 60% of the world’s lithium chemical supply. China also produces three-quarters of all lithium-ion batteries, according to the IEA.

With demand for lithium rising, major economies are attempting to shore up their own supplies and reduce dependency on other parts of the world, including China.  

The stakes are high. In a translation of her State of the Union speech, delivered in September, European Commission President Ursula von der Leyen said “lithium and rare earths will soon be more important than oil and gas.”

As well as addressing security of supply, von der Leyen also stressed the importance of processing.

“Today, China controls the global processing industry,” she said. “Almost 90% … of rare earth[s] and 60% of lithium are processed in China.”

With the above in mind, a number of companies in Europe are looking to develop projects centered around securing supply.

Paris-headquartered minerals giant Imerys, for example, plans to develop a lithium extraction project in the center of France, while a facility described as the U.K.’s first large-scale lithium refinery is set to be located in the north of England.

Looking ahead, American Lithium’s Clarke forecast continued geopolitical competition within the sector.

“There’s a real initiative to wrest back some of the supply chain from … China,” he said.

“I think China is in such a dominant position, it’s going to be very hard to do that. But … I think you’re starting to see that approach happening.”