Lithium supply concerns Looming on the horizon?
In the rapidly evolving world of electric vehicles (EVs), a critical resource is taking centre stage: lithium. The growing demand for EVs is driving a dramatic surge in lithium demand, with global consumption projected to exceed 1.4 million metric tons of lithium carbonate equivalent by 2025 [3].
Currently, lithium-ion batteries account for about 75% of global lithium consumption, with the majority supporting the EV industry [2]. This reliance on lithium for EV batteries and renewable energy storage is creating concerns about future supply security, as current reserves and production capacity may not keep pace with demand.
## Potential Sources of Lithium
The search for lithium is global. Major current producers include South America, Australia, and China. South America, particularly the "Lithium Triangle" (Argentina, Bolivia, and Chile), contains the world’s largest known lithium reserves, predominantly from salt flats (salars) [1]. Australia is the largest producer of hard-rock lithium (spodumene), while China, despite being a significant consumer, also has domestic resources and is investing in overseas mining operations to secure supply.
Emerging sources of lithium are being explored in North America, Europe, Africa, and through recycling. North America and Europe are developing new lithium projects, including hard-rock mining and direct lithium extraction (DLE) from geothermal brines and oilfield brines. Africa, with countries like Zimbabwe and Namibia, is also exploring and developing new lithium mines. As the volume of end-of-life lithium batteries grows, recycling is becoming an important secondary source of lithium.
## Future Supply Challenges and Solutions
The projected shortfalls in lithium supply, particularly in major markets such as China, the US, and Europe, have raised concerns about future supply security [1]. Expanding lithium mining is challenging due to environmental concerns, long lead times for new projects, and regulatory hurdles. However, new technologies, such as DLE, offer promise for faster and more sustainable extraction.
Diversification and technological innovation are key to ensuring a stable and sustainable lithium supply chain. Geographic diversification is underway to reduce dependence on South American reserves, with efforts to develop resources in Australia, North America, Europe, and Africa. Advanced extraction methods, including DLE from brines and geothermal waters, could improve the efficiency and reduce the environmental impact of lithium production. Scaling up battery recycling infrastructure will be critical to supplement virgin lithium supply and reduce dependence on mining.
## Outlook
The world’s lithium supply is currently dominated by South American brine reserves and Australian hard-rock mining. However, as demand continues to outstrip easily accessible supply, the industry is increasingly looking to new sources—such as North America, Europe, and Africa—as well as technological innovations like DLE and recycling, to ensure a stable and sustainable lithium supply chain for the EV revolution [1][2][3]. Without significant investment and innovation, dependence on a few key regions could lead to supply constraints and price volatility.
The G7 nations have agreed on a new action plan for critical minerals, including lithium, to reduce dependence on authoritarian resource powers like China and secure their own supply chains. Latin America is expected to increase its share of the overall lithium supply to around one-third by 2030, becoming "the second important pillar, alongside Australia, for the overall supply of the market." [1]
In conclusion, the race for lithium is on, with countries and regions vying to secure their share of this vital resource. As the world transitions to a more sustainable and electric future, ensuring a reliable and sustainable supply of lithium will be crucial to the success of this transition.
- To ensure the success of the transition towards a sustainable and electric future, the employment policy of communities and industries must focus on the development and implementation of advanced extraction methods, such as direct lithium extraction (DLE), for faster and more sustainable lithium production.
- In line with the agreed G7 action plan for critical minerals, employment policies should prioritize investments in new lithium projects in geographically diverse regions like North America, Europe, and Africa, to reduce dependence on specific regions like South America.
- To address environmental concerns and regulatory hurdles in expanding lithium mining, employment policies should focus on the promotion of science and technology, particularly in the areas of environmental-science and technology, to develop greener and more efficient methods of lithium extraction and production, benefitting both the EV industry and renewable energy storage.
