However, the market faces challenges such as the volatility of lithium prices, environmental concerns related to lithium extraction, and the geopolitical risks associated with lithium-rich regions. Recent developments in the market include increased investments in lithium mining and production capacities to meet the rising demand. For instance, major players focus on expanding their production facilities and entering strategic partnerships to secure their supply chains. Notably, Albemarle Corporation, one of the leading lithium producers, announced plans to invest heavily in expanding its lithium production capacity in the United States and Australia.
These developments underscore the dynamic nature of the lithium market, highlighting the interplay between technological advancements, market demand, and regulatory landscapes. Despite the challenges, the market is poised for robust growth, driven by the pivotal role of lithium in the global energy transition and the ongoing efforts to develop more sustainable and efficient extraction and production methods. Recent developments in the lithium market indicate significant strategic activities among leading players such as FMC Corporation, Albemarle Corporation, SQM S.A., and Tianqi Lithium Corp.
SQM S.A., a key player based in Chile, has been actively investing in increasing its lithium production. In 2022, SQM committed USD 1.5 billion to expand its lithium carbonate and lithium hydroxide capacity, aiming to produce 210,000 metric tons of lithium carbonate equivalent (LCE) annually by 2024. This investment is part of SQM’s strategy to maintain its competitive edge in the global market.
Statistics
- Globally, lithium ore production averaged about 600,000 tonnes /year between 2010 and 2016 before jumping up to almost 2 million tonnes in 2017. It continued to grow in 2018 before declining slightly in 2019 and 2020, the latter being impacted by the Covid pandemic.
- Incorrys is forecasting lithium ore production to almost triple from 2.7 million tonnes in 2022 to over 7.5 million tonnes in 2030.
- Approximately 5% of the total supply is refined into high-purity lithium compounds, which play a vital role in various industries, including battery production.
- By country, Australia has been the dominant force in Lithium ore production averaging 75% of global historical production between 2010 and 2022, with their market share increasing from 62% to 82% over that period. After Australia, Chile averaged about 8% of the global market share from 2010-2022 and China at about 3%.
- Historically, the global refined lithium supply has shown consistent growth, reaching around 130,000 tonnes in 2022. Incorrys is forecasting supply to increase over 10% to 145,000 tonnes in 2023 indicating industry efforts to meet the mounting demand.
- Incorrys expects that by 2030, the supply of lithium will nearly triple to almost 360,000 tonnes.
- Pilbara Minerals, based in Australia, plans to expand its production capacity to 1,000,000 tonnes of spodumene ore per year, starting in 2023.
- Australia also holds over 4.8 million MT of identified JORC-compliant lithium reserves, which puts it behind Chile.
- About 80 percent of the lithium produced globally goes toward battery production, but other industries also consume the metal. For example, 7 percent of lithium is used in ceramics and glass, while 4 percent goes to lubricating greases.
- According to statistics from USGS, from 2009 to 2019, the proportion of lithium used to the battery industry produced worldwide increased from 25% to 56%.
- And in 2019, the sales of battery electric vehicles (BEVs) and plug-in hybrid electric vehicles (PHEVs) topped 2.1 million vehicles (Deloitte Insights, 2020; HU et al., 2021).
- The lithium reserves in Argentina, Bolivia, Chile, and Australia account for more than 60% of the global lithium reserves. Most countries in the world are limited in their supply and can only obtain lithium resources through international trade.
- Lithium chemicals extracted from lithium minerals are mostly lithium carbonate, accounting for 63% of the lithium chemicals on average, followed by lithium hydroxide.
- The trade volume of lithium ore accounts for 19% of the total lithium trade volume, and its trade mainly comes from Chile and Australia, and exports to China and the United States.
- With projections indicating that Lithium-ion batteries will snag an impressive 85% slice of the global rechargeable battery market by 2025, its clear that these sleek, energy-packed marvels are here to stay.
- Lithium-ion batteries are projected to account for 85% of global rechargeable battery sales by 2025.
- As the energy storage landscape evolves, it seems like lithium-ion batteries have laid claim to the throne, with a whopping 85% global market share predicted by 2025.
- In 2022, Lithium carbonates were the world’s 408th most traded product, with a total trade of $9.68B. Between 2021 and 2022 the exports of Lithium carbonates grew by 555%, from $1.48B to $9.68B. Trade in Lithium carbonates represents total world trade.
- In 2022 the top exporters of Lithium carbonates were Chile ($7.72B), China ($666M), Argentina ($637M), Belgium ($180M), and Netherlands ($147M).
- IBAT started producing this week commercial volumes of lithium at a rate of nearly 5,000 metric tons per year using its version of direct lithium extraction (DLE) technology.
- While DLE technologies vary, they are comparable to common household water softeners and aim to extract about 90% or more of the lithium from brines, compared to about 50% using ponds.
- IBAT’s plant costs $50 million to $60 million each, depending on several factors. Paris-based Eramet spent nearly $900 million on its own DLE project that aims to come online this year in Argentina after more than a decade of development.
- IBAT’s facility aims to recycle more than 98% of the water it uses. Burba has repeatedly flagged the lithium industry’s high water use as a structural impediment to DLE commercialization.
- According to SMM statistics, the total domestic production of lithium carbonate in July was 64,960 tons, a decrease of 1.94% month-on-month but an increase of 43.36% year-on-year. From January to July, the cumulative domestic production of lithium carbonate was 363,424 tons, a cumulative increase of 46.10% year-on-year.
- This is not for a lack of resources—the U.S. has an estimated 7.9 million tons of lithium resources within our borders.
- The two nations together supply 96% of India’s lithium-ion cell and battery imports and almost 70% of non-rechargeable lithium products.
- China and Hong Kong were the chief sources of the imports with China shipping 72.73% of the lithium-ion products imported by India and 32.05% of the non-rechargeable lithium cell devices. Hong Kong products accounted for 23.48% and 37.32% of those, respective markets.
- Preliminary surveys have indicated the presence of around 1,600 tons of lithium in the Marlagalla area of Mandya.
- The industry’s total production value exceeded 600 billion yuan (about $94.72 billion)
- This is the largest known lithium and boron deposit in North America. It will produce around 24 thousand tons per year of lithium carbonate. In addition, Rhyolite Ridge will produce around 192 thousand tons per year of borates that are used for vehicle and body armor, as well as permanent magnets used in military applications.
- A study by the National Fire Protection Association (NFPA) found that the number of fires involving e-bikes and e-scooters increased by 131% between 2019 and 2021.
- According to the United Nations estimates, Africa possesses over 30% of the world’s mineral reserves, which includes about 5% of naturally occurring lithium ore reserves.
- According to the US Geological Survey statistics, Namibia produced around 500 metric tons of lithium in 2018. According to September 2022 estimates, the country’s top lithium mines are Bitterwasser, Karibib, and Uis which together sum up to 257,383 metric tons.
- According to September 2022 estimates, Manono is the main lithium mine in the DRC which contains around 6,640,000 metric tons. DRC has the potential to become a leading global supplier of lithium.
- Africa possesses about 5% of the world’s naturally occurring lithium ore reserves, presenting an opportunity for economic growth.
- The Biden Administration has sought to incentivize more EV purchases through its $7,500 tax credit, however, we need to ensure that we fully understand the dangers or risks associated with high-voltage lithium-ion batteries and the safest way for individuals, emergency managers, and first responders to handle any potential fires.
- The scale of Chilean production, however, makes Chile’s move more significant, with Chile accounting for roughly 30% of global refined lithium production in 2022.
- Lithium carbonate (99.5% battery grade), on the other hand, commands a significantly higher price of about $35,000 per metric ton (even after a sharp decline since mid-July 2022).
- Shift Towards Sustainable Extraction: There’s a strong push towards more sustainable and environmentally friendly lithium extraction methods. Innovations in direct lithium extraction (DLE) are gaining traction, reducing the environmental impact and improving efficiency compared to traditional mining methods.
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Emerging Trends
- Recycling and Circular Economy: The recycling of lithium-ion batteries is becoming increasingly important. Companies are investing in technologies to efficiently recycle used batteries to recover lithium and other valuable materials.
- Advancements in Battery Technology: Significant progress is being made in battery technologies, including the development of solid-state batteries and lithium-sulfur batteries. These new types of batteries promise higher energy densities, improved safety, and longer lifespans, which are crucial for applications in electric vehicles (EVs) and renewable energy storage.
- Increase in Electric Vehicle Production: The rapid growth of the EV market is a major driver for lithium demand. Automakers are ramping up production of electric vehicles, leading to an increased need for lithium for battery production. Governments worldwide are also supporting this trend with incentives and regulations aimed at reducing carbon emissions.
- Geopolitical and Supply Chain Factors: The lithium market is influenced by geopolitical dynamics, particularly in key producing regions like Australia, Chile, and China. Issues such as trade policies, political stability, and infrastructure development play critical roles in shaping the supply chain and availability of lithium.
- Mergers and Acquisitions: There is a notable trend of mergers and acquisitions within the lithium sector. Established companies are acquiring smaller firms to enhance their production capacities and secure access to lithium resources. This consolidation is aimed at strengthening market positions and achieving economies of scale.
Use Cases
- Electric Vehicles (EVs): Lithium-ion batteries are the backbone of electric vehicles. These batteries offer high energy density, lightweight properties, and long life cycles, making them ideal for EVs. As the demand for EVs grows, driven by environmental regulations and consumer preference for green technologies, the need for lithium-ion batteries is skyrocketing.
- Energy Storage Systems (ESS): Lithium-ion batteries are crucial for storing energy generated from renewable sources like solar and wind. These batteries help in balancing supply and demand, ensuring a stable and reliable power supply. With global investments in renewable energy projected to hit $13.3 trillion by 2050, the adoption of lithium-ion ESS is set to increase.
- Portable Devices: Lithium batteries power a wide array of consumer electronics, including smartphones, laptops, tablets, and wearable devices. The global consumer electronics market is expanding, with lithium-ion batteries providing the necessary power efficiency and long-lasting charge required by modern gadgets. The consumer electronics market was valued at approximately $1 trillion in 2021 and is expected to grow significantly.
- Aircraft and Satellites: Lithium-ion batteries are used in aerospace applications due to their high energy density and lightweight properties. They power a variety of systems in aircraft and satellites, including communication, navigation, and emergency systems. The aerospace and defense battery market is projected to reach $1.14 billion by 2026.
- Implantable Medical Devices: Lithium batteries are critical in medical devices such as pacemakers, hearing aids, and portable medical equipment. These batteries offer reliability and long service life, which are essential for life-saving devices. The global market for implantable medical devices is projected to grow from $104.3 billion in 2021 to $138.5 billion by 2026.
- Power Tools and Machinery: Lithium-ion batteries are also used in power tools and industrial machinery, providing high power output and extended usage times. The industrial battery market is expected to grow, driven by the increasing automation and adoption of cordless tools in various sectors.
Key Players Analysis
FMC Corporation spun off its lithium business into Livent Corporation, which focuses on producing high-performance lithium compounds used in batteries, especially for electric vehicles. Livent operates independently and is listed on the New York Stock Exchange under the ticker symbol LTHM. This strategic move was intended to allow FMC to concentrate on its core agricultural chemicals business while giving investors direct access to the growing lithium market through Livent .
Albemarle Corporation is a leading global producer of lithium, crucial for electric vehicle batteries. The company operates large lithium production facilities in Chile, the U.S., and Australia. Albemarle’s lithium business is a significant contributor to its revenue, and it continuously invests in expanding production capacity to meet increasing demand. The company focuses on sustainable mining practices and technological advancements to maintain its competitive edge in the lithium sector.
Sociedad Química y Minera de Chile (SQM S.A.) is a leading global lithium producer, significantly contributing to the lithium sector’s supply chain. Based in Chile, SQM exploits lithium-rich brines from the Salar de Atacama, boasting one of the world’s largest lithium reserves. The company’s 2023 revenues from lithium and derivatives reached $2.1 billion, driven by the surging demand for electric vehicles and energy storage systems.
Tianqi Lithium Corp., based in China, is a prominent player in the lithium sector, primarily involved in the extraction and processing of lithium minerals. The company holds significant stakes in the Greenbushes lithium mine in Australia, one of the largest and highest-grade lithium mines globally. In 2023, Tianqi’s revenues exceeded $1.8 billion, reflecting the growing demand for lithium-ion batteries in electric vehicles and electronics.
International Lithium Corp. focuses on the exploration and development of lithium projects to meet the growing demand for energy storage solutions. The company’s primary asset is the Avalonia Lithium Project in Ireland, which is considered a promising source of high-quality lithium. Despite its potential, the company faces challenges including market volatility and exploration risks. Recent efforts have been directed towards advancing project development and securing strategic partnerships to enhance its position in the lithium market.
LSC Lithium Corporation, now part of Plus Power, was engaged in the development of lithium brine projects in Argentina’s Lithium Triangle. The company’s key assets included the Pastos Grandes and the Cauchari projects, known for their high-grade lithium resources. LSC faced challenges related to project financing and production scalability.
American Lithium Corp. is a key player in the lithium sector, focused on developing lithium projects to meet the growing demand for electric vehicle batteries and energy storage solutions. The company’s flagship project is the TLC lithium property in Nevada, which boasts significant lithium resources. American Lithium is well-positioned to capitalize on the rising demand for lithium due to its strategic project location and ongoing exploration efforts.
Livent Corp. is a prominent lithium producer, known for its high-quality lithium hydroxide and lithium carbonate products. Livent’s operations include mining and refining lithium to support electric vehicle and energy storage industries. The company benefits from its advanced technologies and production facilities, ensuring a steady supply of critical materials for battery manufacturing. Livent is strategically expanding its capacity to meet global lithium demand.
Avalon Advanced Materials Inc. is a key player in the lithium sector, focusing on the development of high-quality lithium projects. The company’s flagship project is the Separation Rapids Lithium Project in Ontario, Canada, known for its high-grade lithium deposit. Avalon aims to supply the growing demand for lithium, driven by the rise in electric vehicles and energy storage solutions. The company is in the development stage, working to advance its project and secure the necessary funding.
Sayona Mining Limited is a prominent lithium mining company based in Australia. It operates the North American Lithium (NAL) project in Quebec, Canada, which is set to become a significant source of lithium concentrate. Sayona focuses on expanding its resource base and ramping up production to meet the increasing demand for lithium, essential for electric vehicle batteries.
Conclusion
The lithium market is experiencing significant growth driven by the surge in electric vehicle production and renewable energy storage solutions. Demand for lithium, a crucial component in batteries, is expected to continue rising as global efforts to reduce carbon emissions and transition to cleaner energy sources intensify. However, challenges such as supply chain constraints and environmental concerns are present. Companies are actively investing in new mining projects and technological advancements to meet the growing demand and address these challenges. The market is poised for continued expansion, with innovations and strategic investments shaping its future.
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