Lithium is a chemical element and key component of electric vehicle (EV) batteries that's also known by another name: “white gold.” That's because in a future powered by batteries, from our electric cars to our smartphones, lithium is quickly becoming the most valuable commodity on the planet.
This grey, shiny, non-ferrous metal is the lightest and the least dense of all metals. Being the third element in the periodic table after gases hydrogen and helium, the alkali metal lithium is highly reactive.
Australia, meanwhile, is a more ancient geology. Lithium-bearing pegmatite deposits are found across the county, in chunks of landmass that collided over hundreds of millennia to form the continent of Australia.
Interest in Lithium
As battery technology evolves and electric vehicle penetration accelerates, demand for EV metals (Lithium, Cobalt, Nickel and Copper) will increase.
Australia is the world's largest lithium producer, accounting for nearly half of global production in 2021. Bolivia, Chile and Argentina (the “lithium triangle”) have the largest estimated resources, with nearly 50 million tonnes of lithium between the three countries.
Chile holds the world's largest lithium reserves and is the world's second-largest producer. Lithium is currently produced from hard rock or brine mines. Australia is the world's biggest supplier, with production from hard rock mines. Argentina, Chile and China mainly produce it from salt lakes.
Australia mines about 53 percent of the world's supply of lithium, and virtually all of it is sold to China.
Australia, a major producer of spodumene, has commenced lithium hydroxide production. Four countries—Australia, Chile, China, and Argentina—hold 76 percent of the world's lithium reserves. “These countries are driving lithium production,” May 25, 2022.
Australia has one of the biggest lithium reserves and is the biggest producer of lithium by weight, with most of its production coming from mines in Western Australia.
Today, it could be argued that to control lithium – white oil as it were – is to control nations, Marina Yue Zhang said. Lithium has become a critical mineral in green technologies, with lithium-ion batteries used to power electric vehicles, and to store wind and solar energy.
China's the largest consumer of lithium because of its booming electronics and electric vehicle industries.
Lithium carbonite (a compound in which most lithium is mined) is currently selling for about $7.25 per kilogram. Battery-grade lithium which has been processed from lithium carbonite, in contrast, is selling for prices that are closing in on gold, which is currently selling for about $58,000 per kilogram.
Tesla officially broke ground Monday on a Texas lithium refinery, making it the only U.S. automaker to refine its own lithium. CEO Elon Musk said the refinery will produce enough battery-grade lithium for 1 million electric vehicles by 2025, which would make Tesla the largest processor of lithium in North America.
Pilbara Minerals Limited ($PLS)
Australia's biggest lithium miner, Pilbara Minerals owns the Pilgangoora Project in Western Australia, which has an estimated mine life of 26 years and a maximum production capacity of 580,000 tonnes per annum.
1) Pilbara Minerals (ASX: PLS)
Its Pilgangoora mine in the Pilbara region produces both spodumene and tantalite concentrate, and it counts Ganfeng Lithium and General Lithium as partners. The miner has long been seen as the trailblazer for Australia's lithium boom.
Are lithium shares a good investment? While lithium share prices can be volatile due to supply-demand issues that impact the value of lithium as a commodity, the lithium sector does have good long-term growth prospects as the demand for lithium-ion batteries in electric vehicles (EVs) continues to increase.
Tianqi Lithium Energy Australia Pty Ltd
TLEA owns a majority stake in Greenbushes, one of the world's largest lithium mines located in Western Australia, and also operates a battery grade lithium hydroxide refinery in the state.
Lithium extraction has adverse impacts on the environment, like any other mineral that we mine for. However, similar to coal and gas, lithium mining can result in soil degradation, water shortages, biodiversity loss, damage to ecosystem functions, air contamination and, overtime, an increase in global warming.
Tesla has previously inked deals with Australia's own BHP, Syrah Resources, Liontown Resources and Piedmont Lithium to supply critical battery resources.
Japanese conglomerates Toyota Motor Corp and Panasonic Corp have announced that their joint battery venture will buy lithium from the Rhyolite Ridge mining project of ioneer Ltd. The resource will then be employed to manufacture electric vehicle batteries in the United States.
While the world does have enough lithium to power the electric vehicle revolution, it's less a question of quantity, and more a question of accessibility. Earth has approximately 88 million tonnes of lithium, but only one-quarter is economically viable to mine as reserves.
The stories of two South American countries, Chile and Bolivia — which have the largest known reserves of lithium — are particularly instructive. In Chile, the government has designated lithium as a strategic resource and its development has been made the exclusive prerogative of the state.
Australia and Chile: Dominating Global Lithium Supply
Australia and Chile stand out as the top producers of lithium, accounting for almost 77% of the global production in 2022. Australia, the world's leading producer, extracts lithium directly from hard rock mines, specifically the mineral spodumene.
Though emissions deriving from mining these two elements are lower than those deriving from fossil fuels production, the extraction methods for lithium and cobalt can be very energy intensive – leading to air and water pollution, land degradation, and potential for groundwater contamination.