US Largest Lithium Producer "Lithium Supply Shortage to Continue Until 2030"

[Asia Economy Reporter Byunghee Park] A warning has been issued that the supply shortage of lithium, a key material for electric vehicle batteries, could continue until 2030.

On the 7th (local time), according to major foreign media, Kent Masters, CEO of Albemarle, a U.S. lithium producer, said that lithium producers are facing systemic problems in the long term and that the supply shortage will continue for 7 to 8 years. Albemarle is the largest lithium producer in the U.S. among publicly traded companies.

The long-term issues pointed out by CEO Masters refer to the fact that lithium producers have not secured sufficient funds necessary for development and that the development of lithium extraction technology is not progressing as quickly as expected.

Lithium is extracted from brine, hard rock, clay, etc., and currently, investment is concentrated on the method using brine. Some market sectors, including Goldman Sachs, predict that lithium supply could significantly increase within about two years as lithium extraction technology improves.

However, Eric Norris, President of Albemarle, said that the supply outlook is somewhat exaggerated. He pointed out that nickel extraction technology will not advance as quickly as expected. Norris noted that in the past, lithium production was often less than expected, with actual production sometimes up to 25% lower than forecasts. He also added that the funds secured by lithium producers for technology development are insufficient.

The International Energy Agency (IEA) also pointed out in a report last month that lithium mine development is a long-term project. According to the IEA, lithium mine development takes from as short as 6 years to as long as 19 years from feasibility review to actual production.

The IEA diagnosed that to achieve the electric vehicle production and carbon neutrality plans targeted by governments worldwide, 60 additional lithium development projects must be added by 2030.

Competition among automakers to secure lithium is intensifying. Following investments by Stellantis and BMW in lithium startups this year, recently General Motors (GM) agreed to prepay $200 million to lithium producer Livent to secure lithium. Through this, Livent will supply lithium hydroxide to GM for six years starting in 2025.

Lithium prices have risen more than eightfold compared to early 2020. Although concerns about an economic recession have increased, causing prices of major raw materials like copper to fall, lithium prices have not been significantly affected. Albemarle has even raised its profit forecasts three times this year.

This content was produced with the assistance of AI translation services.