The global energy transition relies heavily on lithium, a critical component in batteries for electric vehicles (EVs). Although demand has recently slowed due to a temporary lull in EV uptake, projections for the long term indicate that lithium will remain essential for the industry, pressing the mining sector to scale up production sustainably to meet worldwide needs. Lithium extraction methods differ based on the resource type. Brine deposits involve pumping lithium-rich saltwater into evaporation ponds; as the water evaporates, the concentrate is refined into lithium carbonate or lithium hydroxide, both vital for battery production. Hard-rock lithium is extracted through conventional mining, with the ore crushed and processed. While this method is energy-intensive, it often yields higher-quality lithium faster than brine-based extraction.
The scale of future lithium demand is immense. South African businessman Brian Menell, CEO of TechMet, highlights that Tesla’s target of producing 20 million electric vehicles annually by 2030 would alone require nearly seven times the current global supply of lithium. This figure does not account for other major EV producers like GM, Ford, or the Chinese manufacturers, who together create around two-thirds of the world’s EVs and batteries. For the mining sector, such demand signifies major growth potential and equally significant challenges, particularly regarding environmental sustainability and adherence to ESG standards. Menell stresses that, while mining depletes finite resources, it can still be conducted responsibly, with transparent governance and minimal environmental impact.
The global landscape of lithium production is evolving. Australia currently leads in lithium extraction, accounting for over 40% of global supply in 2022. However, other regions are positioning themselves to enter this expanding market. Robin Martin of the London Metal Exchange (LME) has pointed out that the majority of lithium trading happens through long-term agreements with limited price transparency, contributing to price volatility. To address these challenges, the LME is promoting index-based pricing and sustainability standards. Such measures are expected to support EV manufacturers and battery producers in managing price fluctuations and ensuring a secure supply.
The surge in EV adoption is also boosting demand for lithium sources beyond traditional mining. Battery recycling is becoming essential as older EVs reach the end of their lifespan. In Norway, Hydrovolt, a collaboration between Northvolt and Norsk Hydro, runs Europe’s largest battery recycling plant, which recovers up to 95% of key materials from used EV batteries. This approach, often called “urban mining,” could become a critical source of lithium and other battery components in the future. As more countries embrace EVs, similar recycling initiatives are emerging worldwide, potentially altering the lithium supply chain and enhancing resource availability.
Firering Strategic Minerals plc (LON:FRG) is an AIM-quoted mining company focused on becoming a near-term cash generating producer of Quicklime, through their Limeco Project in Zambia, whilst at the same time progressing with the exploration and development of their Atex Lithium Project, Côte d’Ivoire.
