Lithium Mining Market

Lithium Mining Market Outlook

The global lithium mining market is anticipated to surge at a CAGR of 7% over the decade. It is anticipated that the mining capabilities of prominent mining agencies such as Albemarle, Ganfeng Lithium, Livent, Nemaska Lithium, Orocobre limited, Sichuan Tianqi Lithium Industries, SQM, and Lithium Americas Corp will reach 120 KT by 2021-end.

This study by Fact.MR, a market research and competitive intelligence provider, on lithium mining, delves on lithium price-associated risks, cost associated with mining, market risks, in-depth study on mine reserves and quality, and mining economics strongholds, among other aspects.

Lithium Mining Industry Report Scope

Report Attributes	Details
Market size value in 2020	USD 1.5 Billion
Market forecast value in 2031	USD 3.1 Billion
Global Growth Rate	CAGR 7%
North America Market Size in 2020	USD 150 Million
Latin America Market Size in 2020	USD 615 Million
Europe America Market Size in 2020	USD 120 Million
East Asia America Market Size in 2020	USD 525 Million
South Asia America Market Size in 2020	USD 36.5 Million
Oceania Market Size in 2020	USD 10 Million
Middle East and Africa Market Size in 2020	USD 43 Million
Forecast Period	2021-2031
Historical Data Available for	2016-2020
Key Regions Covered	North America Latin America Europe East Asia South Asia Oceania Middle East Africa
Key Market Segments Covered	Source Type End Use Region
Key Companies Profiled	Albemarle Ganfeng Lithium Livent Nemaska Lithium Orocobre limited Sichuan Tianqi Lithium Industries SQM Lithium Americas Corp

Analysis of Lithium Mining Business from 2016 to 2020 Vs Market Outlook for 2021 to 2031

Over the past half-decade, lithium prices soared creating a pathway for producers to hold on to inventory, which would assist them in capturing higher dollar opportunity through speculative demand over the short-run, i.e., 2017-2019. In 2019 Q2 and Q3, lithium prices crashed, which turned the speculated profits of manufacturers into huge inventories, resulting in losses.

In 2020, COVID-19 further declined automotive sales cascading the effect to lower demand for lithium batteries, thereby impacting overall lithium trade across the globe. This caused force majeure across lithium sites in Latin America and Australia.

Over the forecast period, the market is set to recover as follows, which is bifurcated into three terms:

Short-run: Over the short-run forecast period, lithium manufacturers are set to cash-in by expanding lithium mines.

Medium-run: Over this term, expansion of lithium mines is set to slow down but significant value growth will be observed over the same period due to price fluctuations.

Long-run: New entrants and anticipated change of government policies over land allocation to environmental friendly mining companies to occur.

Below points summarize the lithium mining industry over the long-run forecast period:

• Currently, lithium carbonate is the prime product type generated through the lithium mining process.
• Battery end use is the most prominent application with market growth of 8.3% anticipated through 2031.
• Ganfeng, Tianqui, SQM, and Livent, among others, hold the pricing throne and the overall market abides to the floor and ceiling prices set by these companies.

What are the Key Driving Points for Lithium Mining?

Rising demand for lithium-ion batteries across regions is the prime factor that is providing a thrust to the lithium mining business. In response to rising demand for lithium-ion batteries, prominent mining companies in Chile, China, and Australia have doubled their production capacities.

Apart from the lithium-ion battery factor, rising prices have also motivated Chinese manufacturers such as Tianqi and Ganfeng to open mines in Australia. Therefore, rising prices of lithium have opened up avenues for manufacturers to create a balance between inventory and existing trade of the primary lithium produced.

The aforementioned factors provide us an image of strong market growth over the short-run forecast period, and growth levels are anticipated to reach saturation point by the medium-run forecast period.

What are the Prime Restraints Related to the Lithium Mining Business?

Rapid price fluctuation is the prime restraining factor for lithium mining business growth. Over the past-half decade, the lithium mining business has generated billions of dollars but on a microscopic level. Chinese mining agencies that acquired lithium mines almost went bankrupt on the back of the price crash.

High inventory volumes held by firms on the back of speculative demand has received a major pushback due to the price bubble. Therefore, frail manufacturers’ outlook towards balancing inventory volumes has affected the scenario of the lithium mining business.

Country-wise Analysis

What Makes Chile a Prominent Market for Lithium Mining?

Currently, Chile holds lithium reserves of 8 million metric tons (MMT) and stands tall among its competitive mining countries such as Australia, Argentina, and China.

Apart from the mine reserve consideration, Fact.MR’s standpoint regarding the country is due to ease its doing business. Chile generates around 10% of its GDP through the mining industry, and therefore, the government permits mining agencies but with limited production capabilities.

With ease of doing business, the country has retained the title of “Global Free Trade Beacon”, owing to the FTA associated with more than 64 countries. This eases post mining lithium logistics costs to the destination country.

On the other side of the coin, obtaining a piece of land for mining requires extensive documentation as the land utilized for mining is the sole property of the state, which requires additional permission from the government over exploration and exploitation.

Prominent factors considered in the country provides a sense of strong market potential for lithium mining.

How Has Lithium Mining Demand been Shaping across Established & Evolving Markets?

Argentina: Argentina, Bolivia, and Chile are together called a lithium triangle, as these three countries own more than 80% of the current accounted lithium mines across the globe. Currently, the province of Jujuy and Salinas Grandes are being mined by the Sales de Jujuy (Toyota and Orocobre JV) and Lithium Americas with Ganfeng, respectively.

China: China currently holds approximately 1 MMT of lithium, and is a prominent supplier of lithium across the country for its EV battery industry. Ganfeng Lithium is a key company that holds the market throne and is a renowned manufacturer of primary lithium metal.

Category-wise Analysis

Why is Battery Manufacturing Anticipated to Hold Strong Market Position over the Forecast Period?

Li-ion has played an integral part in driving demand for lithium mining. Over the past-half decade, surge of 11% CAGR has been observed in terms of li-ion battery sales, which has, in turn, created a deficit of lithium in the market. Utilizing this as an opportunity, lithium mining agencies have aggressively acquired land for mining and provided a thrust to overall lithium trade across the globe.

Will Rise in EV Sales Open Doors for Lithium Mining Agencies?

According to IEA, over the past half-decade, growth of electric vehicle sales embodied 40% CAGR. This growth rate is primarily attributed to China, as the country has held the flag of EV sales dominance over the past half-decade.

Policy action in favor of electric vehicle sales has created an image of strong demand for li-ion batteries. This has reinforced the need for extensive lithium mining in the country. This optimistic development will open avenues for lithium mining stakeholders across the globe.

Did COVID-19 impact the Lithium Mining Business?

Force majeure and scale down of lithium mining operations has been observed across the globe. 95 KT of LCE produced in Q1 of 2020 declined to 60 KT in Q2.

The market has completely recovered post this decline, but the scar of more than half a billion dollars has disrupted the whole supply chain of the lithium mining business.

Competitive landscape

Top lithium mining companies include Albemarle, Ganfeng Lithium, Livent, Nemaska Lithium, Orocobre limited, Sichuan Tianqi Lithium Industries, SQM, and Lithium Americas Corp.

Of these, prominent lithium mining companies are Ganfeng Lithium, SQM, and Tianqi, who control nearly 70% of the global supply. Even from the price point of view, these manufacturers hold the nuclear switch to manipulate the prices through their inventory volumes.

Lithium Mining Industry Key Segments

• Source

  • Brine
  • Hard Rock
  • Others

• Type

  • Lithium Carbonate
  • Lithium Hydroxide

• By End Use

  • Batteries
  • Glass & Ceramics
  • Grease
  • Polymers
  • Flux Powder
  • Refrigeration
  • Others