Introduction: A year to build on
2022 was a year to build on for lithium markets. After a year that broke all records in terms for lithium prices ($80,800 USD per tonne of Lithium Carbonate in November 2022) and the unveiling of new lithium projects around the world, the entire lithium supply chain seems set for a capacity increase in 2023. On top of this, you can expect many more lithium-related policies and programmes to be unveiled in the new year as companies and governments come to grips with high lithium demand. This is exacerbated by the fact that current lithium infrastructure cannot meet demand, with a supply deficit expected by 2027. Projects announced in 2022 will help alleviate some of the pressure but not enough.
Lithium in the United States & Europe
The Biden Administration has made significant investments into lithium supply chains in the United States, while Europe has been expanding its own lithium infrastructure. This should not come considering China’s dominance across the battery mineral, renewable energy, and electric vehicle markets has highlighted the inherent security risk of one entity controlling most of the commodities critical to sustainable development and climate action.
“The scale of investment in new lithium capacity is immense and set to grow further as the United States and the European Union actively try to nurture domestic supply chains,” Andy Home explains in Reuters, “The problem is that greenfield projects for any industrial mineral are prone to over-run, the potential for missed time-lines accentuated in the case of lithium by the need to certify chemical purity with customers. Moreover, much of lithium’s supply growth is coming from new sources such as China’s lepidolite deposits which come with their own new disruption potential.”
This puts into context the United States’ slow reversal on domestic lithium extraction, as well as France’s decision to open a new mine. As such, expect more of the same throughout 2023. Major economies like the U.S., Europe, and Australia will seek to expand their battery mineral extraction, processing, and manufacturing supply chains – something that could have an effect on lithium prices in 2024 posits Australia’s Department of Industry, Science and Resources, “While expansions to production are already underway in Australia and overseas, there are long lead times for lithium mine and brine operations. If [concerns on supply availability] ease, prices could moderate more rapidly over the outlook period.”
Lithium Technologies Can Tilt the Scale
With new supply chain projects in the pipeline and greater awareness of the lithium deficit situation we are currently in, expect new lithium technologies to be adopted as the industry modernizes its infrastructure and looks to maximize its operations. Technology like Direct Lithium Extraction (DLE) has been developed by several entities globally, including EnergyX, and recent results show that it could tilt the scale and disrupt the industry. One of the world’s leading DLE technologies on the market, EnergyX’s LiTAS™ recovers 94% of lithium from brines, and it does so in a matter of days without using heavy chemicals or water. For comparison’s sake, current brine extraction can recover as little as 30% of lithium over the course of months, using vast quantities of water and chemicals.
Mining Technology’s Zachary Skidmore elaborates, “DLE […] is expected to boost existing capacities via increased recoveries and lower operating costs, while also improving the sustainability aspects. It is expected that reserves from new extraction methods will be central to making up the shortfall of lithium needed to facilitate the increased demand.” With EnergyX’s LiTAS™ already having success in the field, it can be expected that DLE will become more common across the lithium brine extraction industry. This will not only help reduce pressure for demand but also improve the environmental profile of brine extraction overall, as DLE is more sustainable by design.
Conclusion: Another Lithium Boom in 2023
Globally the lithium industry and wider sustainability sectors reliant on the lithium are beginning to act on low supply availability. With year on year growth across the sector through 2021-22, 2023 will continue to capitalize on those trends, and as new projects, technologies, and breakthroughs occur, prices and demand will stabilize, but will likely remain high throughout next year. Will they drop in 2024 as suggested by the Australian government’s forecasts? Possibly, but judging from the continued deficit we face, long lead times and increasing demand, it seems unlikely that the market will be stable enough by then to alleviate pricing pressures. Look out for another lithium boom in 2023 – and keep an eye out for major announcements throughout the year.