Fitch Solutions anticipates high lithium-ion production growth in the coming years, with reserves continuing to rise, implying plenty of long-term supply potential.
According to the country-by-country prediction, worldwide lithium LCE output is predicted to increase by nearly 600,000 tonnes between 2021 and 2025, up from 240,000 tonnes between 2016 and 2020.
Between 2026 and 2030, Fitch predicts a 290,000-tonne increase in production.
Fitch said that these long-term forecasts are modest, given that Australia’s production growth is expected to nearly triple between 2020 and 2030.
Despite significant production increases, Fitch Solutions expects the global lithium market to remain tight in the next years as the green revolution intensifies, increasing demand for batteries ranging from electric vehicles to utility-scale batteries.
Lithium supply will be vulnerable to a variety of factors, including geographical concentration at the mining and refining levels, as well as a lack of established and significant mining companies, all of which offer risks to project pipeline execution.
Lithium can be extracted using a variety of ways. Only hard rock mines in Australia, Brazil, China, and Canada, as well as ‘traditional’ brine deposits from salars in Chile and Argentina, are now used to economically generate lithium chemical products on a large scale.
New extraction techniques, including geothermal, brines, and sedimentary (clay) deposits, are being developed by a slew of new businesses, which might boost lithium’s primary supply.
The structure of the industry, the form of the cost curves, and ESG issues will continue to develop as these novel extraction techniques progress.
In the long run, the planned development of lithium recycling may help to alleviate some of the lithium supply difficulties.
Based on country-by-country production data, the top three lithium producers, Australia, Chile, and China, are expected to remain the top one, two, and three producers until 2030, and now account for as much as 84% of total global supply.
Because lithium is now regarded as a strategic resource, government intervention is expected to increase, either to secure this critical commodity, encourage local production, or take advantage of good fundamentals by raising taxes or exerting control over the sector.