Lithium Mining Market

Global Industry Analysis (2017 – 2020) – Growth Trends and Market Forecast (2021 – 2025)

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Superior Properties and Widening Applications Boost Demand for Lithium

Lithium mining is the process of extracting lithium from numerous hard rocks and brines. Lithium from brines is known to be cost-effective owing to lower capital costs when compared to extraction of lithium from hard rock deposits. The lithium mining by products are potash or boron. A recent report by Fairfield Market Research predicts how the rising use of lithium in steel, batteries, lubricants, and aluminium products will create lucrative opportunities for the global lithium mining market during the forecast period. The global lithium mining market stood at US$ 829.73 Mn in 2019 and is expected to reach US$ 1,630.30 Mn by 2025, registering a CAGR of 26.3% from 2020 to 2025.

The demand for lithium is attributable to thermal resistance, high standard performance, and unique lightweight properties it delivers. Its properties make it ideal for air regeneration applications such as safety devices, submarines & miners, and space vehicles to remove carbon dioxide. Lithium is used in air regeneration, dehumidification, and cooling applications. Hospitals, shopping malls, and other institutional facilities often set up absorption chillers as air conditioners, which is expected to fuel demand for lithium. Lithium chloride is also used as a dehumidifier for absorbing moisture. Thus, the upsurge in automotive demand for lithium-ion batteries coupled with other end-user industries demand for lithium is expected to boost the production of lithium in the next few years.

Lithium Mining Finds Monumental Scope as EV Battery Production Ramps Up

The COVID-19 resulted in slow sales of electric vehicles (EV). However, as the world learns to live with the virus, EV sales are projected to soar, giving lithium mining a boost. Lithium is used in the production of Li-ion batteries, which are also used in plug-in hybrid electric vehicles. Lithium hydroxide and lithium carbonate are the key compounds used for battery cathode production. Though the cost of hydroxide is higher than carbonate, the former will witness higher demand as it crucial to the development of efficient Lithium-ion batteries. Growing EV penetration across developed and developing parts of the world will force miners to keep up with the demand.

Efforts towards decarbonization are expected to create a higher interest in this metal. According to Fairfield Market Research report, prices of Lithium-ion battery dropped by 89% between 2010-2020. A sharp decline is expected to result in higher affordability of EVs, which will drive consumers to opt for these vehicles for improving commute by assuming a personal responsibility towards climate change. By 2030, EV sales are expected to double. By 2025, these vehicles will displace conventional passenger vehicles by 10%, creating a monumental chance for lithium mining activities to prove their mettle.

Questionable Sustainability of Lithium Mining Raises Eyebrows

Dubbed as ‘white gold’, lithium mining has its trappings. Lithium is an alkaline metal, found in compounds and in a highly reactive state. This makes its extraction water-intensive. For instance, about 500,000 gallons of water is required to produce one tonne of lithium. The issue is exacerbated by the risk of toxic chemicals leaking from evaporation pools that are used for extracting lithium from a muddy sludge that includes manganese, borax, and potassium, resulting in polluted local water supplies. Over the years, this has raised concerns about indigenous communities getting displaced due to water shortages and risking lives due to exposure to poor environment. Thus, the socio-economic issues related to mining lithium have resulted in a heated debate about its sustainability while the world scrambles to find alternatives to fossil fuels.

Australia Leads; Lithium Triangle Shows Excellent Promise

In 2019, the global lithium production stood at 77,000.0 metric tons. Of this, Australia constituted more than 50% share of global lithium production in 2019, as it has highly concentrated lithium deposits. The report suggests that Australia and China constituted more than 60% of the world’s lithium production in 2019. However, the Lithium Triangle, Chile, Argentina, and Bolivia hold remarkable potential to add to the global production during the forecast period. Considered to be the dry and arid zones, these countries have a serious water shortage, which is likely to make the extraction process far more complicated than in other parts of the world.

Meanwhile, North America is expected to be a consumer of lithium as the demand for lithium-ion batteries for EVs remains high. The demand in this part of the world will also be dictated by the growing sales of electronics.

Asia Pacific is also expected to hold the largest share in the global market since the adoption of light-weight metal in grease, glass, batteries, air conditioning equipment and others is rising in this region.

Change in National Policies and Mining Process to Revolutionize Market

The global lithium mining market is heavily influenced by political gambit and national strategies. For instance, Bolivia, home to the largest salt flat in the world is estimated to have 50% of the earth’s total lithium. However, the country’s decision to keep it a national natural resource and train its own population to have mining jobs is yet to see fruition. Similar case can be seen in Chile. The country got back the reins to its lithium reserves but lost them to Tianqi Lithium, a Chinese mining company, which now holds a 24% share in Sociedad Química y Minera (SQM). SQM is Chile’s biggest domestic lithium producer.

While EVs are expected to give the market a boost, the tremendous scope for improving mining processes can revolutionize the market. For instance, the use of direct lithium extraction could help mining companies in the Lithium Triangle regain a strong footing, while minimizing the environmental costs.

The key players operating in the global lithium mining market are Albemarle Corporation, SQM S.A., Ganfeng Lithium Co., Ltd., Tianqi Lithium, Mineral Resources, Lithium Americas Corp., Livent, and Orocobre Limited Pty Ltd.

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