Junior Miners Lead Global Lithium Investments in 2023

Junior companies have taken the lead in global investments in lithium projects, participating in 82% of the total investment in 2023. This surge represents a notable shift in exploration priorities, fueled by increasing demand for green minerals as part of the global energy transition efforts. Latin America, in particular, stands out as the epicenter of this dynamic growth.

Although lithium is considered a relatively young mineral regarding exploration and development, its importance in the global drive to reduce emissions has proved crucial due to its role in powering electric vehicles and storing clean energy. An increasing number of companies are now finding it to be an appealing and promising investment prospect. As a result, lithium is considered now the third most explored non-ferrous commodity in the world. 

Global lithium-related investment accounted for over US$830 million in 2023, being junior companies the largest contributors to this figure, accounting for over 82% of the total investment. Juniors were followed by majors with 14%, governments and others with 4% and intermediates with less than 0.1%. In 2022, junior companies accounted for only 70% of the global investment, majors 14%, intermediates 10% and governments 6%. 

Latin America stood as the region that received most of 2023’s investment, according to Mining.com. This leadership is driven by Argentina, which hosts the largest undeveloped lithium resources. The region was followed by Australia, which produces half of the world’s lithium, Canada, and the United States, which holds the second largest undeveloped lithium resources in the world. 

While experts forecast increases in lithium budgets, it is unclear until which point they can grow. One key point to focus is the price of lithium. Lithium is currently traded at US$20,000/t, down from the US$80,000/t in November 2022, as reported by Mining.com. Financing shortage could also be explained by long lead times and exacerbating supply chain problems. To address the latter issue, McKinsey & Company suggested that energy companies could expand operations into mining. Furthermore, the agency suggested that traders could finance juniors to help them advance projects and facilitate access to the market, as reported by MBN. 

 

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