Lithium: Needed But Soon Depleted

One mineral that has become more of a hotter topic in daily conversations is lithium. This ‘white gold’ is essential for the lithium-ion batteries for electric vehicles as well as day-to-day electronics. Less common uses for lithium include lubricating greases, nuclear fusion applications, and as an ingredient for bipolar disorder medication.

Given the recent necessity, lithium demand is expected to rise from 500,000 tons today to over 3 million within 7 years. On the other end of the exchange, Chile holds the largest lithium reserves and Australia reigns as the largest global producer.

Most interestingly, global demand is forecasted to outweigh supply by 186,000 within the next 2 years, sparking the need for suppliers. Argentina, Chile, China, and Australia are already producing while the U.S., Canada, the U.K. and more recently established their reserves. Given that the U.S. holds just 3.6% of global lithium reserves, the lithium market will be largely controlled abroad.

The main driver for demand is lithium-based batteries, which are forecasted to make up 95% of all lithium demand by 2030. With the push for climate-friendly options, electric vehicles (EV’s) are a large culprit for the forecasted battery consumption. To hit net-zero, around 2 billion EV’s are needed by 2050, yet there are global resources for only 2.5 billion batteries. Furthermore, the recent lithium demand has pushed the price of lithium up 300%, which will likely increase further given anticipated future demand. 

While lithium is advantageous over comparable metal compounds, the supply-demand imbalance is likely to be the next concern on the frontier of technological innovation.

Source: LithiumStockTips.com