In 2023, the production of metals and minerals crucial for electric vehicles and energy storage devices saw significant increases. The Energy Institute reported a 26% rise in global lithium production, reaching 198,000 tons, while cobalt production increased by 17%, amounting to 196,900 tons, and nickel production grew by 7% to 3,806,900 tons. These figures represent an all-time high in absolute terms for all three metals.
Lithium, cobalt, and nickel are essential for the cathode materials in lithium-ion batteries, electric vehicles, and energy storage systems, which are becoming more prevalent. According to the International Energy Agency (IEA), global sales of electric passenger cars and plug-in hybrids surged from 1.18 million units in 2017 to 13.8 million units in 2023, with their share in passenger car sales increasing from 1.4% to 18.0%. The installed capacity of energy storage devices in the global power industry also experienced a dramatic rise, jumping from 2.1 gigawatts (GW) in 2017 to 55.7 GW in 2023, with China and the United States contributing 42.9 GW last year.
Conversely, natural graphite production, used in the anodes of lithium-ion batteries, declined by 7% in 2023, dropping to 1,668,300 tons. Despite this decrease, the production volume was nearly double that of 2017, which was 886,400 tons. China dominated the graphite market, providing over 70% of the global supply in 2023 with 1,230,000 tons. Importing countries are exploring alternatives to natural graphite, including synthetic graphite and lignode, a carbon material derived from lignin, an organic polymer in the surface layers of wood cell walls. Lignin, a by-product of cellulose pulping, is processed into solid carbon powder and then into electrode sheets and rolls for anode material.
The demand for metals and minerals for lithium-ion batteries is expected to grow in the coming years. As the adoption of renewable energy sources accelerates, there will be an increasing need for storage devices to balance energy systems during calm and cloudy weather. Additionally, new markets in the electric transport segment are anticipated to catch up with leading countries. In 2023, electric cars and plug-in hybrids made up 38% of new passenger cars sold in China, compared to only 2% in India. This potential market growth will further drive the demand for lithium, cobalt, nickel, and graphite, benefiting the producers of these critical materials.
The rising production of metals and minerals for electric vehicles and energy storage systems underscores the growing importance of these resources in the energy transition. The continued demand is expected to fuel further advancements and market expansions in the renewable energy and electric transport sectors.
Alkemy Capital Investments plc (LON:ALK) is focussed on developing projects in the energy transition metals sector. Tees Valley Lithium is developing a state of the art lithium hydroxide plant at Teesside, UK. Tees Valley Graphite is developing the UK’s first natural graphite active anode material processing facility at the ‘plug-and-play’ Wilton International Chemicals Park.
