Lithium has become one of the most strategically important minerals on Earth, underpinning the global transition to electric vehicles and renewable energy storage. As demand surges, control over lithium supply chains has emerged as a critical geopolitical issue, with China poised to overtake Australia as the world's largest lithium producer by 2026.
Lithium Supply Chain
- Australia: ~50% of world supply (current leader)
- Chile: ~30% of supply (Atacama Desert brines)
- China: ~12% production but controls 25% of mining capacity globally
- China processes 90%+ of world's graphite, 66%+ of cobalt/lithium
- U.S. to supply 15% of world lithium by 2026 (up from 1% in 2020)
China's Dominance
China has built a multi-pronged supply chain from mine to battery unmatched by any other country. Chinese firms process over 90% of the world's graphite and accounted for over two-thirds of global cobalt and lithium processing capacity in 2022.
Major Chinese companies hold significant stakes in foreign operations: Tianqi Lithium owns 51% of Greenbushes (world's largest hard-rock lithium mine) through a joint venture with IGO Limited. Ganfeng Lithium holds stakes in Pilbara Minerals and other Australian ventures.
The Strategic Response
Western nations are aggressively pursuing supply chain security. In October 2025, the U.S. government announced a 5% stake in Lithium Americas and its Thacker Pass project—one of the world's most prominent lithium mines.
Major oil companies have pivoted toward lithium: Chevron and Exxon Mobil are acquiring acreage in the Smackover Formation (Florida to Texas). Halliburton is developing a geothermal-powered mine in Texas targeting 83,500 metric tons by 2029.
Price Volatility & Emerging Tech
Lithium carbonate spot prices swung from under $10,000/tonne to over $80,000 and back within 24 months. As of Q2 2025, battery-grade lithium carbonate trades at roughly $17-22/kg.
Direct Lithium Extraction (DLE) technology promises to boost recovery rates to 90% from brines, reducing water use and environmental impact. Battery recycling is gaining momentum, though still delivers less than 10% of total supply.
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