China has reportedly cracked the technical hurdle in mining and extracting lithium from its vast deposits of the soft, silvery-white metal, slashing the unit cost of mining and production to as low as 15,000 yuan (US$2,180) per metric ton.

Lithium, the source of power for almost all portable equipment, has thus become significantly cheaper, according to the Beijing-based Economic Daily and other Chinese newspapers.

The metal that also fuels the world’s drive to green transportation is extracted from brine, but experts say separating it from other elements present in the salts is costly.

Citing a government report, the South China Morning Post said a 15-year marathon research project led by the Chinese Academy of Sciences ultimately bore fruit with a cost-effective technique to extract lithium from other minerals using a complicated electronic membrane filtering process.

The new process has further widened the fat markup enjoyed by Chinese suppliers, at a time when prices of lithium for export range from $12,000 to $20,000 per metric ton. The new technique – already being adopted by several suppliers including state-owned Qinghai Lithium Industries – is expected to boost China’s annual output of lithium, and at the same time see a surge in electric-car manufacturing.

The pristine salt lakes on the Qinghai-Tibet Plateau contain considerable lithium reserves. Photo: Xinhua

China enjoys huge lithium reserves, most of which lie beneath salt lake beds in the wilderness of the Qinghai-Tibet Plateau. But fragile ecosystems on the highland dubbed “the roof of the world” along with the region’s lack of supporting infrastructure have forced Chinese firms to take time to mine the metal, until the recent breakthrough.

In the meantime Chinese firms have forked out billions of dollars to snap up mines in other lithium-rich countries like Australia and Argentina, prompting the accusation that Beijing is hoarding its domestic resources while trying to control the global supply.

A BYD electric SUV being charged at an auto show in France. Photo: Xinhua

Lithium-ion battery packs take up a third or even half of the manufacturing cost of an electric car currently available on the market. Some analysts now believe that fledgling Chinese makers of electric and hybrid cars such as BYD, Geely and Guangzhou Automobile are set to lead the charge to launch cheaper models as Beijing aims to give a lift to domestic production and consumption.

China’s stranglehold on the production of lithium batteries has forced importers and traders in the US to recycle used battery cells to avoid becoming too reliant on China.