WORLD'S BIGGEST MINES Pilgangoora, Western Australia, owned by Pilbara Minerals (PLS.AX), produces 360,000 to 380,000 tonnes of spodumene concentrate per annum, with two expansions underway that will increase production capacity to one million tonnes per annum.
Pilbara Minerals Limited ($PLS)
Australia's biggest lithium miner, Pilbara Minerals owns the Pilgangoora Project in Western Australia, which has an estimated mine life of 26 years and a maximum production capacity of 580,000 tonnes per annum.
The world's largest hard-rock lithium mine, the Greenbushes mine, is in Western Australia. It is co-operated by the Chinese company Tianqi Lithium and the Australian companies Talison Lithium and IGO Limited. In 2021, it contributed 40% of the lithium mined in Australia.
Greenbushes: In Australia, Talison Lithium Ltd (51% owned by the Chengdu Tianqui Industry Group and 49% by US-based Albemarle Corporation), is the world's largest producer of hard-rock spodumene, from the Greenbushes Lithium Operations, 250 km southeast of Perth.
The world's largest lithium-producing mine is Talison Lithium and Albemarle's Greenbushes hard-rock mine in Australia, which put out 37,000 MT of lithium in concentrate in 2022. Coming in second place is SQM's Salar de Atacama operations in Chile, with 2022 production of 29,500 MT of lithium.
To benefit from the growth potential in this industry, some of the best lithium stocks to buy include Tesla, Inc. (NASDAQ:TSLA), Rio Tinto Group (NYSE:RIO), and Albemarle Corporation (NYSE:ALB).
In nature, lithium occurs only in compounds due to its high reactivity. Chile has the largest lithium reserves worldwide by a large margin. Australia comes in second, with reserves estimated at 6.2 million metric tons in 2022.
PILBARA MINERALS
This has been one of our best shares to buy. We first recommended it when it's share price was 32c! Pilbara owns 100% of the world's largest, independent hard-rock lithium project. It will produce over 1 million tonnes of spodumene a year from 2025, in a sign the battery metal is not slowing down.
Tesla has previously inked deals with Australia's own BHP, Syrah Resources, Liontown Resources and Piedmont Lithium to supply critical battery resources.
Two major global lithium ore miners operating in Australia—China-owned Tianqi and US-owned Albemarle—have both invested in refining plants with Australian joint venture partners (respectively, IGO Limited and Mineral Resources Limited).
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.
Tesla officially broke ground Monday on a Texas lithium refinery, making it the only U.S. automaker to refine its own lithium. CEO Elon Musk said the refinery will produce enough battery-grade lithium for 1 million electric vehicles by 2025, which would make Tesla the largest processor of lithium in North America.
Australia mines about 53 percent of the world's supply of lithium, and virtually all of it is sold to China.
China has over half of the world's lithium refining capacity but has to rely on imports for about two-thirds of the raw material. According to the U.S. Geological Survey, China accounts for 8 percent of the world's lithium reserves, which are mostly held in an igneous rock called spodumene.
The bottom line
EV demand isn't slowing down any time soon. And countries across the world are phasing out fossil fuels. So if you can stomach the swings, the lithium market could be a solid investment opportunity for the savvy trader.
Japanese conglomerates Toyota Motor Corp and Panasonic Corp have announced that their joint battery venture will buy lithium from the Rhyolite Ridge mining project of ioneer Ltd. The resource will then be employed to manufacture electric vehicle batteries in the United States.
Lithium is powering new mobile devices and promising next-generation automobiles. By acquiring 100% of the sales rights to lithium carbonate from Salar de Olaroz, Toyota Tsusho is establishing itself as a new supplier in the lithium market.
Most Australian lithium is exported to China, accounting for over 85% of total value in each month of 2021 and over 94% in each month of 2022 (year to date).
Shares in lithium producers have tumbled this year after sharp falls in spot prices driven by slowing demand for electric vehicles in China, leaving investors worried the 2022 boom has turned to bust.
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. Australia is the world's biggest supplier, with production from hard rock mines. Argentina, Chile and China mainly produce it from salt lakes.
Out of the 26 million tons of global lithium reserves as per the U.S. Geological Survey published in January 2023, Chile was home to the largest lithium reserves base with 9.3 million tons of proven lithium reserves. Australia was ranked #2 based on the lithium reserves with a reserve base of nearly 6.2 million tons.
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.