Lithium: High demand in all battery technology scenarios
Lithium is a cornerstone of the current battery market, especially with the continued growth of electric vehicles (EV) and energy storage systems (ESS). Despite research into alternative battery technologies, demand for lithium is expected to remain high in all forecast scenarios. The cell's light weight and high energy density make it indispensable to current industry-dominating lithium-ion batteries.
Although sodium-ion batteries are being developed as a potential alternative, their widespread adoption is expected to significantly reduce lithium demand only after 2030. The automotive and energy storage industries continue to push the boundaries of lithium use, with companies such as Tesla, Rivian and BYD investing heavily in lithium-based solutions to power their electric vehicles. In the US, lithium prices have risen significantly, now hovering between $30,000 and $40,000 per tonne, as competition for tight supply intensifies.
Countries such as Australia, China and Chile remain at the forefront of lithium production, controlling more than 80% of the world's supply. However, the challenges of sustainable lithium mining are growing, making innovation in mining and processing critical to meeting future demand.
Cobalt: A declining but important component
The role of cobalt in the production of batteries is being transformed. With the advent of alternative battery technologies such as lithium iron phosphate (LFP) and lithium manganese iron phosphate (LMFP), the critical need for cobalt is expected to decrease. These alternatives offer a way to reduce dependence on cobalt, which is mainly sourced from the Democratic Republic of the Congo (DRC) under difficult labor conditions.
Despite this shift, cobalt remains crucial to high-performance battery chemistries such as nickel-cobalt-aluminum (NCA) and nickel-cobalt-manganese (NCM) used in premium electric vehicles. If demand for cobalt-based batteries remains stable or increases, cobalt shortages could occur, pushing up prices and complicating global supply chains.
Graphite: the demand gap and new technologies
Graphite, especially in its natural form, faces a growing supply-demand gap. By 2030, this important material used as the anode in lithium-ion batteries is predicted to be in short supply. Countries like China dominate the market for natural graphite, and any supply disruption could significantly affect battery production worldwide.
To meet the demand, synthetic graphite and innovations in new anode materials such as silicon or solid-state alternatives are being explored. However, these technologies are not yet on such a scale as to replace natural graphite. Companies such as LG Chem and Panasonic are actively exploring solutions to bridge this gap as they continue to develop more efficient and cost-effective battery systems.
Nickel: stabilization through innovation
Nickel is another key material in battery production, especially for batteries with high energy density, such as those used in long-range electric vehicles. With the increase in LFP and LMFP batteries that do not rely on nickel, the pressure on nickel supply is expected to ease, stabilizing demand. This trend may ease earlier fears of a supply shortage, which led to higher prices.
In contrast, the aerospace and energy industries are still significant consumers of nickel, so it remains a valuable resource worldwide. Countries such as Indonesia and the Philippines are leading producers of nickel, ensuring that their supply chains are critical to future development.
Other materials: copper, phosphorus and manganese
Although the demand for copper, phosphorus and manganese in electric vehicle batteries is relatively minimal compared to lithium, cobalt and graphite, their high purity requirements pose challenges for production. Copper is particularly important for electric vehicle wiring and charging infrastructure, while manganese is used in some battery chemicals.
The expanding EV market is expected to have ripple effects across many industries, with copper prices rising from US$9,000 to US$10,000 per tonne in recent years. However, demand from other sectors such as renewable energy and construction is likely to keep prices competitive for the foreseeable future.
The way forward: sustainable mining and innovation
To meet the rapid demand for such key materials as lfor the supply of raw materials. Companies such as Albemarle and Glencore are already investing heavily in more sustainable practices in an effort to reduce the environmental footprint of the battery supply chain.
Governments are also stepping in, with countries such as the US and the EU considering policies to promote local production of critical materials. These measures are aimed at reducing dependence on foreign suppliers, particularly China, which currently dominates much of the battery market.
As battery technology advances, demand for lithium, cobalt, graphite and other critical materials will remain high, although changes in technology such as sodium-ion batteries and LFP alternatives may change this landscape after 2030. The future of the industry depends on sustainable mining, recycling and innovation in battery chemistry, ensuring the continued global transition to electric mobility and renewable energy.
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