Global Demand Expected to Surge
Global lithium consumption will increase by 26% in 2025, reaching 1.46 million tonnes. In 2024, consumption stood at 1.15 million tonnes, according to Benchmark Source.
Electric vehicle (EV) adoption and renewable energy projects will drive this growth. Lithium-ion batteries remain essential for these sectors.
Image 1: A lithium consumption increase will be fuelled by accelerated EV adoption.
The Federal Government’s Office of the Chief Economist predicts spodumene prices will rise to $US1156 per tonne in 2025. Prices fell to $US750 per tonne in 2024. This price increase reflects renewed industry confidence and long-term market stability.
Key drivers of demand include:
- The rapid expansion of global EV production
- Growth in energy storage solutions for renewable energy projects
- Increased government incentives for lithium supply chain security
Australia’s Role in the Lithium Market
Australian miners are expanding operations to meet rising demand. The country holds some of the world’s largest lithium reserves and remains a key supplier in the global market.
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Pilbara Minerals plans to increase spodumene production to two million tonnes per annum. The company’s Colina project in Brazil will support this growth.
Mineral Resources (MinRes) focuses on high-grade lithium mines and strategic partnerships. The company oversees the Wodgina operation with Albemarle. MinRes also operates the Mt Marion mine alongside Jiangxi Gangfeng Lithium.
Figure 2: The Wodgina lithium operation
MinRes supports new technologies such as Livium’s LieNA technology. This innovation could improve lithium extraction yields by up to 50%, significantly enhancing efficiency and reducing waste.
Rio Tinto has expanded its lithium portfolio with the acquisition of Arcadium Lithium. The company also owns the Rincon development project in Argentina.
Sustainability in the Lithium Sector
Environmental, social, and governance (ESG) policies are shaping the industry. Australian miners are integrating renewable energy and sustainable mining methods to align with international carbon reduction targets.
Pilbara Minerals is reducing reliance on diesel power at its Pilgangoora lithium operation. The company is shifting to natural gas and battery storage.
The P1000 project at Pilgangoora aims to produce one million tonnes of spodumene concentrate annually. Pilbara Minerals is also developing midstream lithium products. A demonstration plant, in collaboration with Calix, will use electric calcination technology.
Key sustainability efforts in lithium mining include:
- Investment in water-efficient processing technologies
- Development of closed-loop water recycling systems
- Research into direct lithium extraction methods to improve yield and reduce environmental impact
Lithium’s Growing Strategic Importance
Lithium plays a crucial role in global energy security. The United States and the European Union seek to diversify supply chains beyond China to ensure long-term resource stability.
Figure 3: Lithium plays a crucial role in global energy security
Australia has positioned itself as a key partner in these efforts. The nation’s stable political environment, well-developed infrastructure, and high-grade lithium resources make it a preferred supplier.
The Federal Government introduced incentives to encourage value-added lithium production. The Future Made in Australia bill includes a 10% tax break for processing 31 critical minerals, including lithium. The incentive period runs from 2027–28 to 2039–40, offering up to 10 years of support per project.
Technological Advancements in Lithium Mining
Solid-state battery technology continues to develop. These batteries could improve energy density and safety, potentially reshaping lithium demand.
Lithium-ion batteries remain dominant in the renewable energy market. Variants such as lithium nickel manganese cobalt oxide (NMC) and lithium iron phosphate (LFP) are widely used.
Battery manufacturers are developing new cathode materials to improve lithium-ion battery longevity and efficiency. These innovations could drive demand for refined lithium products and create opportunities for Australian miners.
Key advancements in lithium-related technology include:
- Enhanced battery recycling processes to recover lithium and other materials
- Research into lithium-sulfur and sodium-ion batteries as potential alternatives
- Automation and AI-driven solutions for more efficient lithium extraction
Market Outlook and Industry Growth
Future Market Insights forecasts a 7.2% compound annual growth rate (CAGR) for lithium mining between 2025 and 2035.
A pricing rebound could drive new projects and mine expansions. Australian miners will play a key role in meeting global demand.
EV manufacturers are monitoring these developments closely. Lithium remains essential for the transition to cleaner energy solutions and the future of transportation.
As new technologies emerge, miners and battery manufacturers will need to adapt to changing market conditions. Strategic investments and sustainability initiatives will shape the industry’s long-term trajectory.
Australia is well-positioned to capitalise on lithium’s resurgence by strengthening its role in the global supply chain.
