With the usage of electronics skyrocketing since their introduction, the raw input materials associated have risen in tandem. One of the most known materials is lithium, which is often synthesized as batteries for things like smartphones and computers. Lithium carbonate equivalent (LCE) is the primary chemical, which is usually turned into direct lithium extraction (DLE). DLE is multi-faceted and has many advantages including reduced need for freshwater, lower usage of reagents, increased product purity, and increased recovery time. Lithium is most commonly known as Lithium-ion batteries, which are used in electronics due to the high voltage and energy storage to mass ratio.
Where is Lithium Produced
Chile, the largest lithium holder with 92 million tons, and Australia, the largest current producer, hold significant market share in the lithium economy. However, some nations, like China and Argentina, already produce lithium while more, like Thailand, Siberia, and the U.S., have mapped out their resources. Ultimately, demand for lithium is expected to rise 2200% by 2030, resulting in an expected 186 thousand ton lithium supply deficit. It’s likely many nations will become involved in lithium production, which can be advantageous to established lithium-producing nations.
Currently, China makes up only 7.1% of all global lithium, which could bode poorly when considering how much market share it has in electronics. Furthermore, it is expected 95% of lithium demand will be allocated toward batteries in 2030, which is a vital part of today’s electronics. As the world shifts away from lithium in non-electronics usage, it is essential for Asian countries to be able to reliably source lithium to maintain their electronics market advantage.
Supporting the Rise of Electric Vehicles
Another cause for concern in Asia is the recent venture in electric vehicles (EV’s). While the climate change efforts have incited EV’s to become more prominent worldwide, Asia holds a very significant market share. Consequently, this puts further strain on the region to be able to source lithium. Not only do EV’s need lithium just as desperately as electronics, but EV’s require a significant amount of lithium to function. With 8 kilograms of lithium-ion batteries for a single car, the 22 million tons worldwide are sure to dry up quickly.
On a global scale, the trend to cut carbon emissions makes EV’s a very important market. With Tesla as the main competitor in electric vehicles, the market is likely to see much more global competition as the efforts for net-zero ramps up. With enough lithium to synthesize only 2.5 billion batteries and 2 billion EV’s needed for net-zero emissions by 2050, this makes reliable lithium sourcing exponentially more valuable.
Pricing Lithium
Given basic economics, it can be easily inferred that lithium’s forecasted scarcity drives up its price. From 2020 to 2023, it has seen a 300% surge, including a peak at $86,000 per metric ton. Although the price has stabilized between the $30,000 to $50,000 per metric ton level, the price of lithium will undoubtedly rise in the future.
One prominent advantage of electric vehicles is the ability to recoup and reutilize already synthesized lithium. It is estimated between 0-80% of lithium batteries may be recycled, with the large variance being attributed to the different methods used. Furthermore, around 6% of total lithium production will be from the secondary supply in 2030. Aside from recyclability, lithium has many other advantages over similar metal-based compounds. With higher energy density than conventional lead-acid and nickel-metal batteries, lithium also does not require interval full discharges. Lithium also passively loses energy at a lower rate than other battery types and provides reliable voltage even with battery degradation.
All these quirks factor into the utility of lithium, allowing for more compact electronics and longer lasting smartphones and computers. They are doubly important for energy vehicles because this increases ease-of-use and gives more reliability to EV owners. Given the projected constraints on the supply deficit, having EV’s require consistent battery changes would also add additional strain onto the lithium shortage.
Conversely, lithium batteries do also require some larger accommodations. Lithium batteries require onboard battery management systems of both software and hardware as well as cooling and heating systems to facilitate safety.
Conclusion
It is easy to picture lithium powering the future, but it is important to consider how long the future is powered. With global demand rapidly outpacing the increase in global supply, lithium-producers will be paramount in the future.
Source: LithiumStockTips.com
