RE:RE:Canada better get there Act together soon !! Demand for lithium, the critical mineral driving the clean energy transition, is predicted to rise rapidly through to 2030.
For now, the strong growth in electric vehicle (EV) sales is the primary reason behind the surge in demand for the metal that has earned the moniker of ‘white gold’.
But as the world speeds up the shift to renewable energy beyond EV, Australia’s lithium miners are set to capitalise on their advantage in the booming industry.
Supply and demand disparity
According to McKinsey & Company, global lithium demand will reach 3.06 million tonnes of lithium carbonate equivalent (LCE) by 2030 from the current 720,000 tonnes, a growth of 20% annually.
This compares to the present annual supply of 750,000 tonnes of LCE and 890,000 tonnes from planned and probable projects by the end of the decade, hardly enough to satisfy the 26% annual growth projected for passenger EVs through 2030 alone.
In order to meet the shortfall in demand, an additional 1.42 million tonnes of annual LCE capacity must come online by 2030.
By then, McKinsey projects that lithium supply will meet, and even surpass demand, if the additional supply potential is realised.
Top lithium extractor
Australia is the world’s largest producer of spodumene, the mineral for lithium carbonate and lithium hydroxide, which in turn are the raw materials needed to make lithium batteries.
It also has the second-highest lithium ore reserves in the world.
Source: OCE June 2023 Resources and Energy Quarterly.
Production of spodumene from Australian mines is forecast to rise from 3.2 million tonnes in the year ending June 30, 2023, to 3.4 million tonnes by 2024 and to 4.0 million tonnes by 2025, Australia’s Office of the Chief Economist (OCE) said.
In LCE terms, this equates to 452,000 tonnes in 2023, 507,000 in 2024 and 596,000 tonnes in 2025.
“Project expansions and new mines will increase Australian lithium production, with a growing share of mine output refined domestically to produce lithium hydroxide,” the OCE said
“(As) sources of global lithium supply continue to diversify amid international efforts to strengthen critical minerals security, this provides further opportunities for investment in Australian lithium assets.”
In the year ending June 30, 2023, Australia’s export earnings from lithium are forecast to more than quadruple to A$19.5 billion from A$5.3 billion in financial year 2022.
The OCE added that the increase would be driven by lithium prices nearly tripling and the volume of spodumene exports increasing by 44%.
Lithium outlook. Source: OCE June 2023 Resources and Energy Quarterly.