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Lithium demand expected to quadruple, requiring $42B investment

Analysis from Benchmark Mineral Intelligence has shown the lithium industry needs a massive US$42 billion in investment to meet projected 2030 demand (reports MiningNews).

19th May 2022

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Benchmark forecasts 2030 demand will increase fourfold to 2.4 million tonnes of lithium carbonate equivalent (LCE), 1.8Mt higher than forecast 2022 production of 600,000t.
To meet that demand, Benchmark estimates the industry will need $7 billion of investment each year between now and 2028.
"In reality that target has already been missed considering timelines to build new lithium mines," Benchmark managing director Simon Moores tweeted.
"Accounting for misfires on new lithium supply, this $42 billion will be closer to $70 billion."
Benchmark's figures are based on the capital intensity of bringing on new supply.
It estimates brine has a capital requirement of $18,000-20,000 per tonne LCE, while spodumene typically ranges between $10,000 and $35,000/t, but can reach as high as $50,000/t.
New technology like direct lithium extraction or clay resources are harder to estimate, but Benchmark sees higher costs of $20,000-40,000/t.
Chinese capacity tended to be much lower cost, but Benchmark said Europe and North America would need to develop their own facilities at as much as double the cost.
Development projects outside China are also facing cost escalation.
"The incumbents have an added advantage as they have already started long-term investments," Benchmark analyst Cameron Perks said.
He said newcomers were less protected from expected 10-15% capex inflation for long-lead items.
There's been increased speculation that carmakers will have to get directly involved in lithium mining in order to secure supply.
Moores said "offtakes with no active mines are not enough".
"Battery raw material availability is the limiting factor in the production of electric vehicles," he said.
"The EV makers have to get involved in mining if they want to make EVs at scale."
Last week, Tesla CEO Elon Musk told a Financial Times event in New York that buying a mining company was "not out of the question".
"It's not that we wish to buy mining companies, but if that's the only way to accelerate the transition," to electric vehicles, then the possibility was on the table, he was reported as saying.
Musk's comments came a month after he lamented the "insane" price of lithium.
"Tesla might actually have to get into the mining and refining directly at scale, unless costs improve," he tweeted in April.
"There is no shortage of the element itself, as lithium is almost everywhere on Earth, but pace of extraction/refinement is slow."
In late March, Pilbara Minerals boss Ken Brinsden said carmakers were "just about hitting the panic button".
"Car makers were asleep at the wheel. They were too far removed [from supply]," he said.
"Today they've been caught short and they're going to have to pay through the nose."