Lithium: Supply-Demand landscape of market’s hottest mineral

Called “White Gold”, Lithium is the hottest current mineral in the world with its demand set to jump to 1 million metric tons in 2025 from a current total consumption of 212.7k metric tons It has a wide range of uses from lithium-ion batteries including powering electric vehicles to nuclear fission applications, lubricating greases, glass and ceramics, and metallurgy.

Currently, Australia is the largest producer of Lithium while Chile has the largest reserves with 92 million metric tons. The duo along with China and Argentina are the only established lithium-producing nations. From the US perspective, this creates a huge supply-demand imbalance considering their reserves only account for 3.6% of the world’s reserves while their demand could increase by 22x by 2030. 

The biggest reason for the huge increase in demand for lithium is the lithium-ion batteries in electric vehicles, energy storage systems, e-bikes, battery-intensive applications and electrification of tools. Electric vehicles, part of the global push to reduce carbon emissions, is the driving force for the increased lithium demand with one electric vehicle needing 8 kgs of lithium for its battery pack. 

To reach Net zero worldwide by 2050, 2 billion electric vehicles are required.

Lithium In The Energy Economy