LITHIUM 101:
A RESOURCE
IN HIGH DEMAND
WHAT IS LITHIUM?
Elementally lithium is the lightest solid metal in existence, but it does not occur freely in nature. It occurs as a compound in specific hard rock minerals, sedimentary minerals and dissolved in waters around the globe. Lithium as it occurs, cannot be used commercially, it must under-go chemical extraction and purification processes, to refine a specialty chemical that is used in all types of industries from grease to electric vehicle batteries
USES OF LITHIUM
Lithium has a range of industrial applications, including the manufacture of multipurpose greases, medications, glass, and ceramics. These applications accounted for most of the end use demand until 2018. Since 2018, the production of lithium-ion batteries (LIB) used in portable electronics, electric vehicles (EV), and energy storage systems (ESS) has emerged as the dominate market for lithium today, totalling 74% of end use demand in 2022, forecasted to reach 92% by 2030 (Benchmark Mineral Intelligence, 2022).
GLOBAL END-USE LITHIUM MARKET ESTIMATE (2022)
As governments increase their concerns around climate change, policies are shifting towards actionable measures to reduce global emissions. This includes the uptake of zero emission vehicles which includes EV’s. This will have the largest impact on lithium demand in the upcoming decades, as the LIB is the preferred technology in EV applications due to its relatively low cost and high energy density. Electric vehicle sales as a share of total car sales were approximately 12% in 2022 and expected to surpass internal combustion engine sales in 2035, indicating a strong demand for both LIBs and lithium into the next decade. (Benchmark Mineral Intelligence, 2022).
SUPPLY & DEMAND
The uptake of electric vehicles and increased production of lithium-ion batteries brought the global lithium demand in 2021 to 494,000 t LCE with a total global supply of 460,000 t LCE. Resulting in a lithium supply deficit of approximately 34,000 t LCE. Supply & Demand forecasts anticipate the demand to increase over 360%, reaching 2,300,000 t LCE in 2030 (Benchmark Mineral Intelligence, 2022).
The rapidly increasing demand for lithium combined with inadequate investment into the development of the upstream lithium supply chain has driven the price of lithium to new heights. With prices increasing over 500% from early 2021 to the end of 2022, new lithium resources become more attractive and economically feasible to extract.
CURRENT
LITHIUM SUPPLY
The rapidly increasing demand for lithium combined with inadequate investment into the development of the upstream lithium supply chain has driven the price of lithium to new heights. With prices increasing over 500% from early 2021 to the end of 2022, new lithium resources become more attractive and economically feasible to extract.
For each type of lithium resource, there is a minimum lithium concentration or grade at which lithium chemicals can be produced economically. This is known as the Mineralogical Barrier.
Before 2010, most lithium production from pegmatites came from deposits containing >1.5% lithium oxide (6,900 mg/kg), most lithium production from brines came from resources containing >1,500 mg/kg.
Lower grade pegmatites and brines as well as all sediments were on the low-grade side of the mineralogical barrier and could not be developed economically. With demand booming and lithium prices increasing, the mineralogical barrier has moved and will continue to move towards lower lithium concentrations for all three types of lithium resources.
The mineralogical barrier moves “left” with new process development for all three families of resources, such as the development of new and updated DLE technologies unlocking lower grade brine resources. While traditional hard rock mining and evaporation ponds have sustained the demand for lithium until now, the next decade’s increasing demand will require the development of lower grade resources.
FUTURE
LITHIUM SUPPLY
This map illustrates regions where additional lithium supply could come from and the main type of lithium deposit found in the region. Increased demand, elevated lithium prices, and technologies like direct lithium extraction will unlock new sources of lithium in new jurisdictions. Australia and Chile remain as the largest lithium producers in 2030, forecasted to account for 25% and 15% of global production. Argentina increases its production to 16% by deploying more DLE projects.
This chart is the total potential production from each country and the type of deposit the production would come from if all mines in various planning stages are brought online. This is not to say that all these mines will be developed but shows the lithium production potential of each country.
The most notable difference comes from the rest of the world supply, increasing from 4% to 34%, which doesn’t include the major incumbents producing in 2022. Canada and the United States are expected to make up approximately 12% of the production increase in 2030.
Canada has both DLE brine resources located in the sedimentary basins in the west, like Saskatchewan and Alberta. As well as hard rock deposits in the east located in the provinces of Manitoba, Ontario, and Quebec. The United States potential production is a mix of brine resources in Arkansas and the southwest as well as significant clay resources.