Who wins and who loses in the global race for lithium

In business and financial circles there has been talk for some time about a new race for lithium, the lightest solid metal on Earth. This king of alkali metals, nicknamed “white gold”, is probably the most coveted material in the world today, as was the case with yellow gold in the time of the conquistadors in America.

The lithium hunger, emerging on the borders of Argentina, Bolivia and Chile, could drive the energy transition in the most diverse sectors of 2025: from the automobile to cycling, from aviation to nuclear energy; Not to mention its health-related uses, since this metal is also an important element of antidepressants. It is also contained in the objects we use every day, such as enamel, glass, computer screens, smartphonesand above all, in electric vehicles (EV).

WIRED interviewed Michael Schmidt, an official at DERA, the German mineral resources agency of the Federal Institute for Geosciences and Natural Resources, about the growing interest in lithium: “There are several reasons, the energy transition will require electric batteries and storage systems. The Adoption of electric vehicles will grow because many governments have established specific quotas. For example, the EU banned the production of new thermal cars from 2035.” Schmidt explains that due to the chemical properties of ion batteries, the metal cannot be easily replaced without sacrificing energy density. “Therefore, evolving chemical and regulatory factors will dictate future lithium demand.”

Focused and growing

In 2021, global lithium extraction exceeded 100,000 tons, a historical record and four times higher than that extracted in 2010.. 74% were designated for electric batteries; In 2010 it was only 23%, automotive surpassed electronics as a primary use. And it was precisely this sector, together with energy policy, that increased prices by 550% in a couple of months, between 2021 and 2022. However, in 2023, an excess supply was recorded.

Due to this excess supply, the market has suffered serious disruptions, everything seems to indicate that stocks are on the rise. There are currently 40 companies in global production, the five largest are: Albemarle from the USA, SQM in Chile, Pilbara Minerals in Australia, MinRes from Australia and Tianqi Lithiumbased in China. “These five companies currently have a global market share of around 60%,” estimates DERA official Michael Schmidt.

Australia is the largest producer of lithium concentrates, while Chile is the largest producer of lithium carbonate, and China is the largest producer of lithium hydroxide. This is due to the different processing pathways of water and salt concentrations, and hard hydroxide rocks. “By far, China is the third largest lithium producer, with a current market share of around 15%,” the official continues. The Asian country has created trade agreements with Bolivia and several African states to become a global giant in the production and transformation of the metal.