Demand For Electric Vehicles Continues To Drive Lithium Mining

Following the 2018 United Nations Intergovernmental Panel on Climate Change (IPCC) report that stated the world needed to decrease greenhouse gas emissions to a net-zero level by 2050, many governments and industries have been focused on ways to decrease emissions quickly and efficiently.Demand For Electric Vehicles

Transportation accounted for 23 percent of global greenhouse gas emissions in 2010, according to the IPCC report, so there has been renewed attention on the mass production of electric vehicles and other electrically powered transportation. Electric vehicles depend on lithium-ion batteries to function In turn, with new demand and an expanding market for the metal, the mining of lithium has become more competitive and also more lucrative.

China’s consumers have contributed to an increase in global demand for electric vehicles, with about half the world’s electric vehicles being sold in China and sales increasing by 150 percent during the first quarter of 2018. A recent report mentioned that China has also embraced electric public transit, with a fleet of 421,000 electric buses–the most in the world–operating within the country, compared to 2,250 in Europe and 300 in the U.S. Given this demand, it is unsurprising that China is one of the top three producers of lithium in the world.

Chinese companies not only mine and process lithium within the country, but have also acquired other mines throughout the globe over the past few years in order to ensure a steady supply of the metal. Jiangxi Ganfeng Lithium Co., based in Xinyu, Jiangxi, acquired 37.5 percent of the Cauchari-Olaroz lithium project in Argentina, while Tianqi Lithium Corp., based in Chengdu, Sichuan, purchased a 24 percent stake in Soc. Quimica & Minera de Chile for $4 billion. Meanwhile, NextView New Energy Lion Hong Kong Ltd. completed its acquisition in 2018 of Lithium X Energy Corp., founded by Brian Paes-Braga, who also served as CEO. In a statement from NextView New Energy, the company revealed that its goal in acquiring Lithium X was to further develop the Sal de los Angeles lithium project in Argentina in order to supply battery manufacturers throughout China.

A recent report from the Chinese government stated that researchers have discovered an easier and cheaper method of lithium production, lowering the cost of production to a record low of 15,000 yuan per ton. However, while China has gained efficiency in its lithium production, Chile, Australia, and Argentina possess most of the world’s lithium reserves, and Australia and Chile have produced the most lithium in the last couple years.

While lithium production may fluctuate from year to year, demand is forecasted to increase continuously in the next decade. Volkswagen, whose aim is to launch 70 new electric vehicle models in the next ten years, estimates that the worldwide demand for lithium will more than double by 2023, mostly due to the increased need for lithium-ion car batteries.