Demand for lithium , one of the key materials used in making lithium ion batteries, is rising rapidly. The metal is used in a wide variety of industrial applications including glass, ceramics and greases, but it’s the use of lithium as a key component in the batteries that power electric and hybrid electric vehicles that has so excited markets.
Lithium does not occur naturally in nature. Instead it is found in a variety of mineral salts which needs to be chemically processed to form the lithium compounds and chemicals required by industry. A number of lithium compounds are used by industry but it is lithium carbonate that is the most commonly used form of lithium, accounting for more than half of total demand. The lithium industry often expresses lithium production and trade in lithium carbonate equivalent (LCE) units.
If electric vehicles, which rely wholly or partly on electricity stored in batteries as their source of energy, revolutionize road transport in the way many expect, demand for the metal will rise exponentially. China will be at the forefront of this.
China is already the world’s largest market for EVs, accounting for nearly half of global sales last year. This trend is expected to continue, supported by government policies driving the development and adoption of electric vehicles. This will require a significant increase in both lithium carbonate and increasingly lithium hydroxide, another lithium compound, which is the preferred basis for the next generation of lithium battery technologies.
China accounted for slightly more than half of total global production last year producing 123,000 tons LCE, according to statistics from the China Nonferrous Metals Industry Association (CNMIA). Of this, 83,000 tons was lithium carbonate with the remainder comprising other compounds like Lithium hydroxide, lithium chloride and lithium metal.
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