Zabuye lithium project marks major step in China’s brine supply expansion

Zabuye lithium Salt lake

The Zabuye lithium project in Tibet has entered its second phase, expanding China’s brine-based lithium capacity. The Zabuye lithium project now adds sizeable battery-grade output at a time when the global lithium market is tipping into surplus. As a result, the Zabuye lithium project strengthens China’s ability to influence pricing and security of supply across the EV battery chain.

Phase-two expansion lifts Tibet’s brine lithium capacity

China’s Tibet-based producer has started up phase two at Zabuye with 9,600 t/yr of battery-grade lithium carbonate. The new phase also includes 2,400 t/yr of industrial-grade lithium carbonate, adding flexibility across downstream chemical and industrial customers. Commissioning of the second-phase lines began in late 2023, but full launch slipped from a planned June start into late September. However, the first phase, focused on 7,000 t/yr of lithium concentrate, has remained operational and continues to support the overall project. Zabuye draws on one of the world’s largest salt-lake resources, with proven reserves of around 1.84mn t of lithium in brine. This makes it Asia’s largest lithium brine lake and the third-largest globally, underlining its strategic relevance for long-term supply.

Zabuye lithium project scales into a looser global market

The timing of the Zabuye lithium project expansion coincides with strong growth in global brine output. Market forecasts indicate that global lithium brine production will rise by about 24pc in 2025 to above 370,000t LCE. At the same time, total lithium feedstock supply is projected to reach about 1.6mn t LCE in 2025. Meanwhile, demand is expected to come in near 1.5mn t LCE, implying a surplus of roughly 100,000t. Therefore, new brine tonnes from Zabuye will feed into an already better-supplied market, potentially reinforcing price pressure if demand underperforms. Yet high-quality, low-cost brine projects retain strategic importance, especially for integrated Chinese players.

Strategic shareholders reinforce China’s battery value chain

Zabuye’s ownership underscores its role in China’s EV and battery strategy. Major Chinese battery and lithium companies hold significant stakes in the project, tightening the link between upstream brine resources and downstream cathode and cell manufacturing. This integrated structure allows key players to secure battery-grade lithium carbonate volumes under long-term arrangements. In addition, the project’s location in Tibet diversifies China’s domestic resource base beyond traditional hard-rock and other brine hubs. However, higher-altitude operations and logistics can still pose cost and reliability challenges compared with coastal or overseas assets. Even so, the project is positioned as a core pillar in China’s wider lithium industrial ecosystem.

The Metalnomist Commentary

Zabuye’s phase-two launch shows how Chinese brine projects are still scaling even as the market moves into surplus. For global buyers, the combination of growing Chinese brine capacity and integrated ownership by major EV and lithium players suggests continued competitive pressure on higher-cost producers. The medium-term question is how long marginal assets outside China can remain viable if brine-led oversupply persists.