In a recent research report, the Australian Government’s Department of Industry, Science, Energy and Resources (DISER) said world lithium production is forecasted to double in 2024 surpassing 1 million tons. However, despite this increase, it might not be sufficient to meet the demand for the mineral.
In 2020, the total lithium carbonate equivalent production (LCE) was 439,000t, In 2021, this figure increased by 24 percent to 546,000t. For 2022, DISER forecasts that LCE production will be 682,000t and also predicts that in 2024 it will reach 1 million tons. According to DISER, this 80 percent growth will be driven by the output of major lithium-producing countries like Australia, Chile and Argentina. At the same time, DISER highlights that Chile and Argentina’s production will be boosted by the expansions of Albemarle and SQM brine operations in the case of Chile and the expanded brine operations of Livent, Allkem and Minera Exar in the case of Argentina.
Nonetheless, DISER highlighted that the current lithium supply is not enough to meet global demand. It added that it will take some time to close the gap as more projects are in expansion and development. In 2021, the demand for lithium accounted for 583,000t and increased to 724,000t in 2022, additionally, demand is expected to grow 40 percent reaching 1.05 million tons in 2024.
SIDER’s report says that Europe and North America are seeking to reduce their dependence on China’s lithium by developing their own projects. In contrast, the report shows that Asia will remain the major source of demand for lithium despite the interest of the US and Europe to run lithium batteries factories.
The department highlighted the Mexican lithium situation. In April 2022, the Mexican government nationalized lithium and announced that it would create a state-run lithium company, which is scheduled to start operations within the next six months, along with the Sonora Plan that aims to transform the state into a clean energy hub.
According to SIDER, despite the current efforts to develop strong lithium extraction operations in the world, it could be challenging to meet demand since the industry is expected to require large quantities of lithium, which increases the possibility of supply shortages in the next few years.
According to Statista, Australia is the largest lithium producer with 55,000t produced in 2021, followed by Chile with 26,000t, China with 14,000t and Argentina with 6,200t.