Lithium is a key element for the production of rechargeable batteries, which power everything from smartphones to electric vehicles. Lithium has become increasingly important as the demand for renewable energy grows. Countries with significant lithium reserves will likely play a crucial role in the global economy.
This comprehensive round-up report on the world’s largest lithium-producing countries in 2022, released by U.S. Geological Survey, will give you a fair understanding of the lithium market.
We cover everything you need to know about the global lithium industry, including the top lithium-producing countries, their production volumes, and the latest trends in the lithium market.
Countries with the highest Lithium production in 2022
The race for lithium production supremacy started reaching unprecedented heights to replace 1.45 billion petrol cars worldwide with electric vehicles. Australia, Chile, Argentina, China, and the United States are emerging as the world’s top producers.
Dominating the market, Australia is the largest lithium producer contributing to over 40% of global lithium production in 2022, leaving other nations in its wake.
Chile trails behind as the second-largest producer, accounting for roughly 25% of the world’s lithium, while Argentina clinches the third spot. China and the United States round out the top five lithium-producing countries.
2022 marked a record-breaking global lithium mine production milestone, with an astonishing 134,000 metric tons of lithium carbonate equivalent (LCE) extracted.
Australia led the charge, boasting a staggering 60,000 metric tons of LCE. Chile followed with a respectable 39,000 metric tons, while Argentina contributed 6,200 metric tons. China also made its mark, producing 19,000 metric tons of LCE.
The ever-increasing demand for lithium has ignited fierce competition among these top players, shaping the future of this essential element.
Top six countries with the Largest Lithium reserves
Lithium – the element that powers our modern world – is becoming more valuable daily. A recent U.S. Geological Survey (USGS) report reveals that countries like Australia, Brazil, China, Argentina, and Chile are leading the pack in lithium production.
Additional contributions come from smaller facilities in Brazil, Canada, China, Portugal, the United States, and Zimbabwe. With demand and lithium prices soaring in 2022, existing lithium facilities around the globe have been ramping up or planning to expand production capacity.
The U.S. Department of Energy has earmarked $1.6 billion from the 2022 U.S. Bipartisan Infrastructure Law to fund 12 lithium-based projects to boost domestic lithium reserves and support new commercial-scale facilities for extraction, processing, and battery component manufacturing and recycling.
But why has lithium become so important? Owing to the rapid increase in demand and lithium prices in 2022, established lithium operations worldwide increased or were in the process of increasing production capacity.
Brine-based lithium sources are being developed or explored in Argentina, Bolivia, Chile, China, and the United States, while mineral-based lithium sources are being investigated in numerous countries worldwide. Lithium-clay sources are also being studied in Mexico and the United States. As a result, global lithium resources have significantly increased, totalling approximately 98 million tons.
The world’s lithium reserves are distributed unevenly, and some countries hold the key to this vital resource that powers our modern world. The top countries with the largest lithium reserves demonstrate the incredible wealth beneath their lands.
- Chile: The South American gem, Chile, proudly stands at the top with a staggering 9.2 million tons of lithium reserves. The nation is the undisputed leader, genuinely embracing its immense power.
- Australia: Although trailing Chile, Australia still boasts a remarkable 5.7 million tons of lithium reserves. This land down under is a significant player in the lithium world.
- Argentina: Another South American titan, Argentina, possesses 2.2 million tons of lithium reserves, showcasing the continent’s undeniable importance in lithium production.
- China: The Asian powerhouse, China, holds 1.5 million tons of lithium reserves, further emphasizing its global influence in various industries.
- Portugal: Though smaller in comparison, the European nation of Portugal has a respectable 60,000 tons of lithium reserves, proving its potential in the global market.
- United States: With abundant natural resources, the United States possesses 750,000 tons of lithium reserves. While not a top producer, the nation still holds more lithium than others, such as Zimbabwe, Brazil, and Portugal.
These countries are the heart of the lithium revolution, powering our transition to a sustainable future.
Technology plays a vital role.
The lithium demand will only increase as technology continues to evolve. The importance of lithium supply security has become a top priority for technology companies in Asia, Europe, and North America.
Recognizing the importance of lithium supply security, tech companies in Asia, Europe, and North America have forged strategic alliances and joint ventures with exploration firms. The goal is to ensure a reliable and diverse lithium supply for battery manufacturers and automakers.
Lithium market trends
Lithium market trends reveal a steady surge in demand over recent years, primarily fueled by the expanding electric vehicle market and renewable energy storage systems.
Remarkably, lithium carbonate prices skyrocketed to $59,600 per ton in November 2022, up from $20,000 in November 2021 and $8,400 in 2020, as reported by Trading Economics.
By the second quarter of 2022, lithium prices had reached an astounding $72,155 per metric ton and were projected to keep rising through 2025. The industry has also shifted toward lithium hydroxide production, a key component in high-performance batteries.
The USGS highlights the significant increase in lithium consumption for batteries in 2022, attributing it to the widespread use of rechargeable lithium batteries in the rapidly growing electric vehicle market, portable electronic devices, electric tools, and grid storage applications
Lithium price trends in 2023
China’s spot lithium carbonate prices followed suit, climbing from roughly $35,000 per ton in January to an impressive $69,000 per ton in November 2022. Spot lithium hydroxide prices in China experienced similar growth. As for lithium’s global end-use markets, a staggering 80% is dedicated to batteries.
However, Lithium carbonate prices in China plummeted 55% year-to-date, reaching CNY 240,000 per tonne in late March 2023, the lowest in 15 months. This decline contributes to solid production levels and reduced demand, supporting predictions of a supply surplus in the current year.
In 2022, China subsidized battery manufacturers and offered cash rewards for new electric vehicle purchases but has since halted incentives for the new energy auto sector, leading to decreased demand for battery components.
Furthermore, battery overproduction in late 2022, driven by subsidy exploitation, resulted in unsustainably high inventories for battery producers and forced them to sell goods at significant discounts. The bearish pressure is expected to continue in the short term, fuelled by the EU’s decision to phase out carbon-emitting vehicles by 2035.
In conclusion, the surging demand for renewable energy and electric vehicles in 2022 has significantly impacted the global mine lithium production market.
As countries compete to secure this vital resource, it’s crucial to recognize extraction’s environmental and social costs. Lithium mining and processing can lead to the devastation of delicate ecosystems and displacement of local communities, posing complex challenges with no easy answers or quick fixes.
Governments and corporations must adopt responsible and ethical practices in developing lithium reserves, balancing economic benefits, environmental preservation, and community well-being.
As we advance towards a more sustainable future, we all share the responsibility of creating a world powered by clean energy rooted in empathy, accountability, and respect for the environment surrounding us.