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Global lithium production hits record high on electric vehicle demand

Global mined lithium production hit a record high in 2021 of 100,000 tonnes (excluding the US), a 21% increase over 2020 (82,500 tonnes), according to preliminary data released by the US Geological Survey (USGS).

USGS said that production increased in response to strong demand from the lithium-ion battery market and increased prices of lithium.

Global consumption of lithium in 2021 was estimated to be 93,000 tonnes, a 33% increase from 70,000 tonnes in 2020.

“Lithium supply security has become a top priority for technology companies in Asia, Europe, and the United States,” the USGS said in its latest report.

Four mineral operations in Australia, two brine operations each in Argentina and Chile, and two brine and one mineral operation in China accounted for the majority of world lithium production.

Additionally, smaller operations in Brazil, China, Portugal, the United States, and Zimbabwe also contributed to world lithium production.

Lithium prices

Chinese lithium carbonate prices tracked by Asian Metal Inc. rose to a fresh record last month, as data showed a 35% month-on-month jump in electric-vehicle registrations in December.

Nearly 400,000 EVs were registered during the month, according to the China Automotive Technology and Research Center.

Tesla supplied about 18% of the total.

Ganfeng Lithium, which signed a long-term supply deal with Tesla in November, said its profits for 2021 will be up as much as 437%, fueled by the “fast development” of the EV industry.

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Lithium’s feast-or-famine future keeps EV makers guessing

Lithium’s vital role in electric-vehicle batteries means automakers, miners and investors are racing to figure out how much supply the world will need in the coming years — and also how much it’s going to get.

The problem is the predictions vary wildly.

The metal’s price has surged fivefold in the past year, reflecting mounting worries about availability.

For years, batteries and EVs have become cheaper to make as the technology improved and production stepped up. But now there’s a risk that rising costs of raw materials — and lithium in particular — could hobble the transition just as momentum picks up.

The stakes are high for carmakers that are spending billions of dollars betting on a battery-powered future.

Mining companies and governments are responding with ambitious plans to boost production.

But demand is growing at such a breathtaking pace that it’s not clear whether it will be enough.

In a survey of six leading lithium forecasters, estimates for how the market will look in 2025 range from a deficit equal to 13% of demand to a 17% surplus.

Projections for the market’s size diverge sharply too, with demand forecasts ranging from as little as 502,000 tons to as much as 1.25 million tons.

The gulf between forecasts reflects lithium’s status as a small market on the cusp of seismic expansion, with the average of the six estimates suggesting annual growth of more than 20% for both supply and demand between 2021 and 2025.

That compares with typical growth rates of 2%-4% in larger and mature markets like copper, where surpluses and deficits usually equal a fraction of demand.

The forecasts matter because banks use them for everything from gauging future car sales to valuing loans in mining projects. Vague market projections leave more room for sharp price swings when supply panic kicks in.

That could be particularly unnerving for the the car sector, which has placed lithium at the center of its electrification plans.

It has spent years experimenting with different chemical compounds to minimize use of other battery metals like cobalt — which is sometimes mined in unethical conditions — while boosting usage of abundant elements like iron.

Benchmark is among those forecasting supply to fall short of demand, even as it predicts output to roughly double from 2021 levels by 2025.

“There’s a complete overoptimism about the responsiveness of supply in the lithium market,” said Andrew Miller, chief operating officer at Benchmark Mineral Intelligence.

“It’s very hard to see how it’s going to accelerate at the speed that the battery market and electric vehicles are accelerating.”

While Bank of America Corp. is among the most optimistic on supply, it’s forecasting deep deficits once consumption is factored in.

“There’s an awful lot of tons that producers need to bring into the market,” said Michael Widmer, head of metals research at the bank in London.

“We have a disconnect where on the demand side we’re pushing very hard, but on the supply side, miners are only just starting to commit.”

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“Lithium supply security has become a top priority for technology companies in Asia, Europe, and the United States,” the USGS said in its latest report.


More food for thought on the Road to Mining those Monsters of Manono

Fingers crossed

Frank