Rapid developments in the lithium industry have continued into 2018, as lithium-ion (Li-ion) battery technologies consumed in a range of end-uses drive demand growth and new operations provide additional raw material supplies. In 2017, rechargeable batteries accounted for over 43% of total lithium demand. The increasing use of Li-ion batteries in automotive applications, both for hybrid and fully-electric vehicles, has seen the automotive industry become the biggest influencer on the lithium industry in 2017. Lithium demand from automotive applications reached over 34,000t LCE in 2017, which is forecast to more than double by the end of the decade. Although rechargeable batteries have gained significant attention in recent years, industrial applications for lithium products such as glass, ceramics and greases continue to show stable growth.
Roskill is expecting growth in lithium demand to continue in the years to 2027, as xEVs increase their market penetration and begin to compete on price with traditional gasoline/diesel models without incentives. In 2027, Li-ion batteries in automotive applications are forecast to exceed 1TWh in capacity, while their use in power and motive, portable electronics and energy storage systems is expected to contribute a further ~140MWh. Energy storage systems (ESS) are predicted to grow at a similar rate to automotive applications, as production costs fall and the uptake of renewable energy rises, although competition from other battery technologies could become a limiting factor.
During 2017, the supply of lithium raw material changed significantly, with the ramp-up of production at lithium hard-rock operations increasing mineral concentrates production in Australia to greater than 157kt LCE, compared to ~75kt LCE in 2016. The increase in mineral concentrate production and start-up of direct shipping ore (DSO) shipments to China has improved raw material availability for mineral conversion facilities, which are increasing production capacity. In 2017, refined lithium capacity totalled ~340ktpy LCE, dominated by China-based mineral conversion facilities and lithium brine operations in South America. More than 370ktpy LCE of lithium mineral conversion capacity and 120ktpy lithium brine capacity has been identified by Roskill with the potential to come online at existing and new operations by 2020, although it is unlikely that all of this capacity increase will be realised. The procurement of lithium by different OEMs is also changing, with some companies getting directly involved in the financing of lithium operations such as Panasonic, Great Wall Motor and Jiangxi Special Electric Motor Co.
Major producers including Albemarle, SQM, Talison Lithium and Ganfeng Lithium are leading the way with capacity expansions and construction of new processing facilities, but the continual development of new projects will be required to keep pace with demand growth. Sustained demand growth and elevated lithium prices have also seen exploration at projects developing complex resources, supported by advances in new processing and extraction technologies. Advancements may further open up supply potential at deposits with traditional mineralogies and brine chemistry, but also at projects targeting high Mg:Li ratio brines or more exotic lithium minerals such as zinnwaldite and jaderite.