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The world is ramping
up its lithium production in a bid to meet the growing global demand for
critical minerals, being driven by renewable energy deployment and the higher
uptake of electric vehicles (EVs) and other electronics. Lithium production
from mining increased from 31,500 metric tonnes in 2015 to 82,500 tonnes in
2020 and 290,000 tonnes in 2025. While China remains the world’s biggest
lithium producer, as production expands, several new players are entering the
market, which is helping to diversify operations.
The global
lithium-battery market exceeded a value of over $150 billion in 2025, marking a
20 percent increase compared to 2024. “Batteries are becoming a cornerstone of
the automotive sector, a critical source of flexibility for power systems, and
an increasingly important source of back-up power for digital infrastructure,
including data centers and artificial intelligence,” according to the
International Energy Agency (IEA). Lithium-ion batteries are also used for
industrial and strategic applications, such as in defense.
South America is the
most well-known region for lithium production and is home to the lithium
triangle, an area with vast lithium reserves connecting Bolivia, Argentina, and
Chile. The region holds approximately 53 percent of the world’s lithium
reserves. The three countries, along with Peru, contain about 67 percent of
proven lithium reserves and produce around half of the global supply, according
to the U.S. Geological Survey.
China dominates
global lithium production, having invested in some of the world’s largest
mines, as well as increased its domestic production of the white gold. By 2027,
China is expected to contribute around 32 percent of global lithium production
from domestic projects and another 18 percent of production from overseas
operations, giving Chinese companies control of around half of the global
lithium market. However, China holds a much larger control of the lithium
refining market and is expected to manage around 81 percent of lithium refining
activities by 2027.
Western powers are,
therefore, highly dependent on China for their lithium supply. Its strong hold
of the lithium market has also led China to dominate global lithium-ion battery
production, which has bolstered its electronics industry. In January, the
United States announced plans to boost self-sufficiency and reduce its reliance
on China for its lithium by rapidly expanding domestic mining activities.
In October, the U.S.
Department of Energy took a 5 percent stake in Lithium Americas Corp and a
separate 5 percent stake in the company’s Thacker Pass joint venture with
General Motors, which is expected to be the largest lithium source in the
Western Hemisphere.
At the time, the
U.S. Energy Secretary Chris Wright stated, “Despite having some of the largest
deposits, the United States produces less than 1% percent of the global supply
of lithium. Thanks to President Trump’s bold leadership, American lithium
production is going to skyrocket.” Wright added that the move is aimed at
reducing U.S. dependence on foreign adversaries for critical minerals by
strengthening domestic supply chains.
The United Kingdom
is also looking to develop its domestic lithium production through the
development of a mine in the south-west county of Cornwall, to be operated by
Cornish Lithium. While traditional mining methods will be used to extract the
lithium, such as drilling and blasting in a quarry, the project’s operators are
adamant that environmental permits are very strict, meaning that the firm will
be expected to be sustainable where possible and dispose of waste appropriately.
Meanwhile, certain
byproducts attained from the extraction process can be useful, such as silica
for cement, sulphate of potash for fertilizer, and gypsum for plasterboard. The
firm aims to develop more sustainable mining practices where possible, such as
in the use of electric trucks. This is particularly important for the project’s
success, as several other European lithium projects have faced backlash from
locals and environmentalists concerned about the impact of mining on the
environment, as seen in both Portugal and Serbia.
Canada also has its
sights set on sustainable lithium mining. At present, Canada produces around
6,000 tonnes of lithium a year, compared to Australia’s 88,000. In Western
Canada’s Alberta, which is well known for its oil production, researchers are
hoping to use a new extraction method to produce lithium more sustainably. The
direct lithium extraction (DLE) method does not require solar evaporation –
which is used in South American lithium mining – to extract the lithium,
instead, it relies on chemicals to extract the lithium directly.
Ngai Yin Yip, a
professor of earth and environmental engineering at Columbia University,
recently published a study about a solvent that researchers believe can be used
to extract lithium from brine. So far, this method has only been practised in
the lab, but the promising lab results have encouraged a company called
Piepgrass to test the method at scale, in real-world conditions.
As the global
lithium market continues to grow, several new players are entering the
industry. Although China will likely maintain its market dominance, the United
States is expected to make strides in lithium extraction and processing in the
coming years, while some European companies develop smaller projects. In
addition, a greater emphasis is expected to be placed on sustainable lithium
production to help governments achieve decarbonisation aims in line with a
green transition.