The global lithium market is expected to witness substantial growth owing to increasing demand from energy sector. Lithium is mainly obtained from minerals and continental brines sources such as salt lakes and salt flats. The biggest reserve of the product is situated in the Atacama Desert of Chile. The site is responsible for nearly one-third of the global output. The site is operated by Albemarle Corporation and SQM S.A, leading manufacturers of the industry.
The product is found in nearly 145 mineralogical species. However, the commercially viable minerals are only few, such as petalite, spodumene, and lepidolite. Other sources of the product include oil field brines, geothermal brines, sedimentary clays, and sea water. Majority of the product is sourced from the continental brines.
Lithium is among the most abundant elements. The reserves are largely concentrated in countries, such as Argentina, Chile, Australia, and China. As per the United States Geological Survey (USGS) statistics, in 2017, the global production was around 43,000 metric tons, wherein Argentina, Chile, and Australia accounted for nearly 89% of the global production.
However, despite existence of significant reserves, price of the product observed a rise in 2017 and the key factor behind surging prices was rigidity in the value chain. The product is mostly processed into lithium carbonate and lithium hydroxide. The former is widely employed in ceramics, glasses, and pharmaceutical sector whereas the latter is prominently used by electric vehicle manufacturers. The production sites of South America results in easy processing of lithium carbonate. The biggest production of the product is known to take place in Salar de Atacama, a salt lake situated in Chile.
However, some facilities are not well equipped to produce lithium hydroxide at commercial viable rates as it requires additional investments. In addition, robust demand from electric vehicle manufacturers resulted in tight supply of the product and eventually surge in the prices in 2017. Alternate viable sources for the production of lithium hydroxide is from rock deposits in Australia and China wherein investment for the projects has already started. It is expected that these new projects are likely to increase the global production capacity by nearly 70% over the coming years.
Energy storage, air treatment, glasses and ceramics, and greases and lubricants are some of the major applications in the market. Energy storage can further include portable electronic devices, hybrid vehicles, battery electric vehicles, and power storage. It is likely to witness a significant growth of nearly 35% from 2007 to 2017 owing to miniaturization of electronic devices, exponential growth in the battery based transportation, rising popularity of smart grids, and growing demand from hybrid and battery electric vehicles. Growth of electric vehicles is expected to increase by nearly 9 million units from 2017 to 2025.
The lithium market can be segmented based on geography as North America, Asia Pacific, Central & South America, Europe, and Middle East & Africa. Europe is expected to witness steady growth owing to increased adoption of hybrid and battery electric vehicles. Asia Pacific is likely to emerge highly lucrative over the coming years owing to shift from traditional vehicles towards battery powered vehicles in China. The Chinese government has set a strategy to adopt nearly 20% of electric vehicles by 2020.
Leading companies operating in the lithium market include Albemarle Corporation, Tianqi Lithium Corporation, SQM S.A., and Livent. Some of the other prominent manufacturers of the market are Altura Mining Limited; Galaxy Resources Limited; Orocobre Limited; and Avalon Advanced Materials Inc. Manufacturers are adopting various strategies, such as joint ventures in order to expand their production capacities. For instance, in 2017, Albemarle Corporation and Tianqi Lithium Corporation, leading chemical companies, formed a joint venture to increase lithium production at Greenbushes spodumene mine in Australia.
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