Everyone knows about the ongoing semiconductor shortage. You’re probably less familiar with the also-ongoing global lithium shortage. Yes, demand from Chinese battery makers, and the auto industry’s current push into more electrified vehicles, mean there isn’t enough lithium to go around. And we’re not talking about the bipolar medication.
And that shortage is due to stick around, thanks to some wonderful environmentalists in Serbia. The Jadar lithium project in Serbia, run by Rio Tinto, has just been canned due to pressure from environmentalist groups. Serbian politicians are miffed for money reasons — because that’s how politicians work.
The global industry is also a little miffed because they need that stuff for batteries and components. And also, money. In fact, the only folks not miffed are environmentalists. And, presumably, the environment around the proposed mine.
The importance of lithium
The world’s largest producer of lithium in Australia, where it’s removed from the ground in hard rock mines. Argentina, Chile, and China are also major producers, but they use brine mines to extract the metal. The process is… quite similar to that used for salt mining, actually.
Lithium production is expected to ramp up dramatically over the next few years. Global production in 2020 was 408,000 metric tonnes. By the end of this year, global production is expected to be 636,000 metric tonnes. Even so, demand is climbing faster than supply can meet it.
Global demand for the essential alkali metal in 2020 was just 342,000 metric tonnes. 2021 saw demand climb to 504,000 metric tonnes (production was just 497,000 metric tonnes). 2022 will see demand grow to 641,000 metric tonnes — 5,000 metric tonnes more than the global industry is capable of producing.
The demand means that lithium production is a good industry to be in right now. But it also means that, as with the semiconductor shortage, some sacrifices will be made. And that’s the part that will hurt end-users. If it’s more profitable to make batteries for EVs (the motor industry uses two-thirds of all lithium carbonate produced) than something else, then some product lines will suffer. Or they’ll become more expensive, which is much the same thing for users.