Can the advent of EVs result in lithium gaining more traction?
Team Veye | 01 Feb 2021
As electric cars are beginning to take over the roads, lithium could be emerging as one of the biggest winners. Lithium demand is expected to explode over the coming years with demand for electric vehicles projected to skyrocket.
Australia is among the top six lithium producing countries in the world with Chile, Argentina and Bolivia among the countries with high reserves.
The global lithium-ion battery market was valued at $36.7 billion in 2019 and is projected to hit $129.3 billion by 2027, at a CAGR of 18.0% from 2020 to 2027.
Lithium is mined from three types of deposits: brine deposits and Pegmatite lithium and sedimentary (hard rock) deposits, with Australia accounting for the majority of lithium hard rock mines on a global scale.
Miners get the elemental lithium from salt brines left over from ancient seas in places like Chile's Atacama Desert, the driest place on Earth, and in hard rock minerals such as spodumene, found in Australia and elsewhere. Tesla's recent deal with Piedmont will provide it with 60,000 tons of concentrated spodumene.
Australia is a reliable and cost-competitive supplier of resources. Western Australia hosts five of the world’s biggest lithium mines, whose combined reserves exceed 475.24 million tonnes.
Annual global electric vehicle sales are forecast to reach 24 million by 2030. Though we have the reserves, battery makers are going to need more mines to support their production,
And although Mining companies have been constantly striving to add more lithium production sites, the concern remains that they won’t be finished in time to satisfy rising demand.
The rise in lithium prices is not likely to be a deterrent as it is almost nothing as compared to the overall price of the vehicle. As Elon Musk, the founder of Tesla has reportedly called it “the salt on the salad”. Even if the price of lithium soars 300 percent, battery pack costs would rise only by about 2 percent.
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