It's anticipated that as EVs and reusable batteries scale up, we'll need three million tonnes of lithium globally by 2030. That's a six-fold increase from the start of this decade, so it's safe to say the entire process around mining and refining lithium will boom with new companies entering the market.
Lithium supply and demand challenges will remain
Although domestic supply is expanding in China, Europe and the US, it will not keep pace with demand. By 2033, Europe and the US will each contribute 5% to global supply versus 18% and 23% respectively of global combined electric vehicle (xEV) demand.
Demand is set to grow steadily and is forecasted to reach 2–3.5 TWh by 203011. Growing demand for batteries can be expected to lead to further improvements in performance and falls in prices, with lithium-ion technology becoming ubiquitous.
Production is expected to increase in 2022, with Western Australian mines ramping up to meet demand and the Finniss Lithium Project opening in the Northern Territory.
Some analysts believe lithium prices will continue receiving “strong support” in 2023 and beyond amid expectations of an ongoing supply crunch. Others, however, are cautioning that 2023 could see lithium pricing reach an “inflection” point as higher prices spark new supplies but slower demand.
Are lithium shares a good investment? While lithium share prices can be volatile due to supply-demand issues that impact the value of lithium as a commodity, the lithium sector does have good long-term growth prospects as the demand for lithium-ion batteries in electric vehicles (EVs) continues to increase.
So, how long do Lithium-ion batteries last? To sum it all up, the bare minimum that most manufacturers expect from their batteries is around 3 years or 1,000 charging cycles.
Argosy Minerals is a lithium stock in Australia. It's hard rock production is in the lithium triangle where the world's largest lithium resources are. 40% of the world's hard rock lithium is mined here at the lowest cost. It also It's production is in Nevada US and Argentina.
Who is the biggest lithium producer in Australia. Pilbara Minerals (PLS) is by far the biggest lithium mining company in Australia. Owning the world's largest hard-rock lithium operations, Pilbara produces over 377,000 metric tons of lithium every year.
Australia mines about 53 percent of the world's supply of lithium, and virtually all of it is sold to China.
Researchers at Vienna University of Technology have developed an oxygen-ion battery based on ceramic materials that has a longer lifespan than lithium-ion batteries.
According to The West Australian, Minerals Resources CEO Chris Ellison also reckons there's “no question that [lithium] prices have bottomed out”. Ellison is expecting lithium prices to move higher over the next few months. A few other brokers are predicting a rebound in lithium prices in 2023 and into 2024.
Lithium-sulfur batteries are believed to be more efficient than lithium-ion batteries, which could increase the range and storage capacity of electric vehicles. Additionally, sulfur is affordable and abundant, which could mean lower cost.
A recently published study of Fairfield Market Research foresees the global lithium mining market to exceed the US$1 Bn mark by 2025 end. During 2021 – 2025, the market is likely to demonstrate a stellar 16.3% CAGR.
Lithium demand is expected to increase by 28 percent year on year in 2023 and 24 percent year on year in 2024, with the electric vehicle (EV) segment set to represent 73 percent of all demand, according to Fastmarkets' forecasts.
Global market outlook for 2030
Global demand for Li-ion batteries is expected to soar over the next decade, with the number of GWh required increasing from about 700 GWh in 2022 to around 4.7 TWh by 2030 (Exhibit 1).
Australia has one of the biggest lithium reserves and is the biggest producer of lithium by weight, with most of its production coming from mines in Western Australia.
For three years from 2025, Magnis Energy Technologies plans to supply Tesla with 17,500 tonnes of battery materials each year, with the US electric car-maker given an option to purchase up to 35,000 tonnes per annum if car production ramps up.
Liontown Resources (ASX:LTR,OTC Pink:LINRF) is set to supply Tesla with lithium spodumene concentrate from its AU$473 million Kathleen Valley project. The deal is for an initial five year period set to begin in 2024, conditional on Liontown starting commercial production by 2025.
It has been very beneficial to be an owner of Pilbara Minerals shares over the long term, with the company's share price rising by around 375% in the past five years. The S&P/ASX 200 Index (ASX: XJO) has only gone up by 20% over the past five years.
Chile holds the world's largest lithium reserves and is the world's second-largest producer. Lithium is currently produced from hard rock or brine mines.
While the question of the supply of lithium for EV batteries is a valid one to raise, the abundant supply of lithium means it is unlikely that the world will ever run out of this vital resource.
The Lithium Supply Challenge
Even though the price of lithium has surged more than tenfold over the past two years, there's enough capacity to meet anticipated demand until around 2025—and potentially through 2030 if enough recycling operations come online. After that, chronic shortages are expected.