manufacturers.
Lithium is mainly used in lithium-ion batteries, but also in the production of industrial lubricants and pharmaceuticals. The cost of the metal has been soaring over the recent months, with the index of key prices more than doubled in the first quarter, after hiking by 280 per cent last year. These figures reflect previous warnings made by one of the industry experts, known in mining circles as ‘Mr Lithium’.
Joe Lowry, who regularly draws mining bigwigs to his podcast, wrote a paper in 2019 saying demand for lithium would outstrip supply, and he believes the situation would not improve. “In the next two years, even though there will be significant growth in supply, it will be less than demand, so the gap will just continue to grow. It’s simple maths. It’s like, the bus in front of me is going 50 miles per hour, I’m going 45 mph, but I’m saying I’m gonna catch it in 2025,” he said. “I believe there will be a day in the future when lithium is in oversupply, but it won’t be in this decade.”
When inquired why it would take so long, Lowry pointed out that while you can set up a battery factory in a couple of years, it takes up to a decade to bring on a lithium project. “It’s not a commodity; it’s a specialty chemical,” he said. “Lithium is often compared with iron ore or other major commodities, and it behaves nothing like that. The auto industry is just finally figuring that out. Lithium qualification for an auto company can take over a year.” His views are reaffirmed by BloombergNEF’s price forecasts for lithium carbonate and hydroxide, which are expected to be higher still by 2030 as a result of projected supply deficits.
