Concern that Lithium supply will not meet EV demand

Recently, at the Fastmarkets Lithium and Battery Raw Materials conference in Las Vegas, Lithium producers expressed a growing anxiety that a variety of obstacles will hinder their ability to supply enough of the battery metal to meet the world's aggressive electrification timelines.

Riaan Lit1

According to a Reuters report, these obstacles include delays in the issuing of mine permits, staffing shortages and inflation.

Once a niche metal used primarily in ceramics and pharmaceuticals, lithium is now one of the world's most in-demand metals given the aggressive electric vehicle (EV) plans of automakers.

At stake is the pace at which electric vehicles could displace internal combustion engines, a key goal of the green energy transition.

"You could end up in a crisis situation where the battery companies don't have the security of (lithium) feedstock," Stu Crow, chairperson of Lake Resources, said on the sidelines of the conference.

This week, Lake Resources became the latest lithium company to announce a project delay, pushing back first production from its Kachi lithium project in Argentina by three years. It cited power supply and other logistics concerns.

According to Eric Norris the head of Albemarle, the world's largest lithium producer “it’s a big challenge”. Despite the company growing rapidly across the Americas, Asia and Australia, it still expects global lithium demand to exceed supply by 500,000 metric tons in 2030. Various consultancies and other producers have slightly different projections, but all warn of a looming shortage.

There were 45 lithium mines operating in the world last year, with 11 expected to open this year and seven next year, according to Fastmarkets. That pace is far below what consultants say is needed to ensure adequate global supply.

Those growth projections assume a best-case scenario, even as mining companies face difficulty hiring technical talent, rising costs and delay times for crucial equipment.

Even if more lithium mines are built, there aren’t enough facilities to produce specialised types of the metal for batteries. Automakers may be forced to accept lower-quality lithium, which decreases an EV battery's range, executives said.

Once a niche event attended by industry diehards, the Fastmarkets conference has grown rapidly alongside breakneck lithium demand. Roughly 1 100 delegates attended this year, nearly triple 2019 levels and up 68% from last year.

More New Energy Vehicles stories

Hydrogen fuel cell, one of Toyota’s alternatives

Hydrogen fuel cell, one of Toyota’s alternatives

When talking about new energy powered vehicles, there is more than just the typical battery electric vehicles. There is also the hydrogen fuel cell as an alternative, and one manufacturer betting big on this, is Toyota.

  • 16 February 2024
Electric Volvo EX30 touched down

Electric Volvo EX30 touched down

With the first units of the fully electric Volvo EX30 having touched down in South Africa, Volvo Car SA says pricing will start at R775 900.

  • 15 February 2024
Hino making good progress with green goals

Hino making good progress with green goals

Hino South Africa is making substantial progress in addressing environmental challenges at its manufacturing plant in Prospecton near Durban, with special focus on greening its electricity supply and decreasing the amount of waste going to landfills.

  • 14 February 2024