The world will need more than twenty times the amount of lithium than was mined last year to meet demand by mid-century, driven by growth in energy storage and electric vehicles, according to new analysis from Benchmark Mineral Intelligence.
Annual production of 11.2 million tonnes LCE will be needed by 2050 with energy storage making up two-thirds of battery demand by that date, due to the growth of renewable energy sources such as wind and solar.
The data highlights the challenge of scaling up lithium production from new mining projects, which can take more than five years to bring online. Near-term, a total of 2.9 million tonnes LCE will be needed by 2032, more than the 2.7 million tonnes of cumulative global production of lithium between 2015 and 2022, according to Benchmark’s Lithium Forecast.
The long term path for lithium is set, yet the supply chain scaling challenge has just begun. What this data shows is that we are at just the beginning of a generational challenge, not one that’s going to be solved in the 2020s.—Simon Moores, chief executive of Benchmark
By 2040, all of the lithium mined last year will only meet one month’s demand, even with the supply from recycled batteries.
Lithium miners and refiners not only have to sensitively scale their supply base within the economics of today and near term future, but they also attempt to plan for a world lithium ion economy that is an order of magnitude bigger than today.—Simon Moore
Without recycling, we will need 234 new lithium mines by 2050 to meet this staggering demand. Today, Benchmark tracks just 40 mines which produced lithium this year. This highlights how important recycling will be for meeting the lithium demand of the future.
Benchmark forecasts that in 2040, nearly 20% of lithium chemicals will be produced from recycled batteries or process scrap.
In the near term, most recyclable materials will be sourced from process scrap. Though from the mid-2030s onwards an ever increasing majority of material will be sourced from end-of-life batteries.
Leading up to 2050, an increasing number of countries will transition their fleets to EVs. This has been the primary driver of growth in recent years. In 2015, EVs represented just 39% of battery demand increasing to 79% this year, as assessed by Benchmark’s Lithium ion Battery Database.
The US and European Union have both pledged to have net zero greenhouse gas emissions by 2050, while China has set a goal of reaching that date by 2060. As part of that goal, the EU has pledged to ban sales of gasoline and diesel vehicles by 2035, while China has said it wants only “new-energy vehicles,” which includes hybrids and fuel-cell vehicles, to be sold by that date.
It’s crucial that legacy OEMs, EV producers, and battery cell makers make the big and at times uncomfortable decisions in investing in long term generational critical minerals supply, especially for lithium. If not, Automakers won’t hit their EVs, governments won’t achieve Net Zero by 2050, and market volatility will be here to stay for much longer.—Simon Moore
By 2050 Benchmark expects about a third of battery demand will be from EVs and the rest from energy storage.