World Needs To Mine 25× More Lithium By 2050
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Decarbonizing transportation rests on scaling up electric vehicle production rapidly and massively, and that rests on scaling up battery mineral mining and refining. Batteries are also necessary to a greater and greater degree for scaling up renewable energy deployments in an efficient and effective manner. Benchmark Mineral Intelligence, a leading entity tracking and analyzing lithium market information, concludes that the lithium market needs to scale up to 25 times or more of the 2021 level by 2050.
While much emphasis is put on the electric vehicle market and all of the lithium needed for that, Benchmark Mineral Intelligence actually puts stationary energy storage is the main driver of demand by that time — ⅔ of the 11.2 million tonnes expected to be produced each year by then.
Looking closer, the analysts forecast 2.9 million tonnes of LCE (Lithium Carbonate Equivalent) a year by 2032. Consider that, in total, 2.7 tonnes of LCE were produced from 2015 through 2022 so far. In 2040, one month’s lithium needs are expected to be equal to all of the battery-grade lithium produced in 2021.
“The long term path for lithium is set, yet the supply chain scaling challenge has just begun,” Simon Moores, chief executive of Benchmark, explained. “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.”
Benchmark is aware of 40 lithium mines that have been in operation — producing lithium — in 2022. By 2050, the company sees a need for 234 more lithium mines if there’s no battery recycling underway (which, of course, is completely unrealistic but is a place to start from for such an analysis). In terms of recycling, “Benchmark forecasts that in 2040, nearly 20% of lithium chemicals will be produced from recycled batteries or process scrap.” For now and in the near future, due to the relatively low number of old electric vehicles on the road, very little recycled lithium comes from recovered EV batteries — rather, such content is coming from process scrap. It’s estimated that lithium from recycled batteries will make up more of such content starting sometime in the mid-2030s and then will account for a greater and greater portion of such supply.
Benchmark also noted that EV battery demand was responsible for 39% of overall battery demand in 2015 but is now up to 79% of demand this year. However, as stated above, Benchmark expects 67% of battery demand to be from the stationary energy storage market by 2050, and just 33% from the EV battery market. Nonetheless, with the European Union aiming for no fossil fuel vehicle sales by 2050 and China looking to have 100% “new energy vehicle” sales by 2060, the EV market needs to achieve dramatic growth in EV battery production. “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,” Moores said. “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.”
To learn more insights on the global lithium market from Benchmark Mineral Intelligence, you can join its upcoming “Benchmark Week” in the middle of November.
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