Cross-Border Ownership and Input Access: Evidence from the Lithium Supply Chain (arXiv (Cornell University))

Summary

• Chinese owners' overseas stakes represent 22% of output mined outside China.p.7
• Sites that are jointly owned or have horizontal or vertical ownership links account for 85.0% of mining output and 87.1% of refinery output.p.9
• The four largest owners accounted for 44% of mining output and 42% of refinery output in 2024.p.9
• Lithium output rises by 2.22% after divestiture under pooling of Chinese refining interests, compared with 0.06% under observed portfolios.p.4
• Sharing an owner is associated with a 60.19 percentage-point higher probability of a supply relationship.p.12
• The model is estimated on a global panel of mines and refineries for 2015–2024.p.3
• An export ban on ore to China reduces global lithium supply because refining capacity elsewhere cannot fully replace lost Chinese production.p.5

Key insights

1. Divestiture of Chinese stakes in overseas mines does not reserve that ore for domestic production.p.5
2. Production outside China can replace only part of the lost Chinese output at existing capacities.p.5
3. Brine expansion requires no traded ore, so the same ownership intervention can increase or reduce spot trading.p.4
4. Ownership links give mines an incentive to restrict spot ore sales that would strengthen competitors of affiliated refineries.p.2