Lithium supply is ramping up to meet the explosive growth forecast by Roskill for lithium-ion (Li-ion) batteries. In 2016, the market for Li-ion batteries was 87GWh, a ten-fold increase on a decade earlier, based on considerable growth in portable consumer electronics. Recently, growth has been accelerating as Li-ion batteries are used more widely in automotive applications, which accounted for nearly 50% of Li-ion battery output in 2016. This was largely driven by the electrification of buses in China, but also strong government drives to meet emissions targets through electric vehicles (EVs).
Roskill is expecting this growth to continue to 2026, as EVs begin to compete on price with traditional gasoline/diesel models without incentives, and increased market penetration. By 2026, the transportation market for Li-ion batteries could reach over 1TWh—a 40% increase over 2026. Production of energy storage systems (ESS) is also predicted to grow at a similar rate, but could be faster if costs fall and the up-take of renewable energy rises.
Up to 2015, the successful entry of new suppliers was limited by technical and financial issues and market requirements were largely met by high-cost Chinese production based on imported raw materials. The increase in prices from in 2016, has caused a rush in companies staking, purchasing, evaluating or expanding assets. An additional 370,000tpy LCE of lithium production capacity has been identified by Roskill with the potential to come online at existing and new operations by 2020, although it is unlikely all of this capacity increase will be realised.
Investment is being led by major existing producers such as SQM, Albemarle, Tianqi Lithium and Ganfeng. The shift to assets with more complex resources, and the need to produce more lithium hydroxide, has catalysed the emergence of new extraction technologies, such as Nemaska Lithium, Enirgi, POSCO and Eramet. Lithium ore mineral, lepidolite, is seeing increased attention, after it was proved viable by Chinese converters in a high price environment. Meanwhile Rio Tinto is pursuing evaluation of jadarite mining in Serbia, a major resource but one that has not been tapped for its lithium before.