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European Lithium
Overview
As the global push to halt climate change gains momentum, the European Commission is looking to regionalize the battery supply chain to capitalize on the rapid electric vehicle (EV) growth and limit its dependency on other countries through heavy investment and policy changes. Europe’s electric vehicle market value reached US$29.49 million in 2021 and is projected to increase up to US$143.08 million by 2027, indicating a compounded annual growth rate of 23.4 percent in that period.
Even though Europe is one of the largest global producers of motor vehicles, it currently does not have a local supply of lithium hydroxide which is heavily used in EV battery technology. According to experts, the market is set to remain in a structural shortage until 2025
One company that aims to become the first local lithium supplier into an integrated European battery supply chain is European Lithium (ASX:EUR,FRA:PF8), a mining exploration and development company focused on exploring, identifying and acquiring lithium in Europe. The company is led by a management team with decades of experience and success in the mining and finance markets.
“Our aim is to be the first supplier of lithium from Europe, for Europe,” European Lithium chairman Tony Sage said.
The company is focused on its wholly owned Wolfsberg Lithium project located in Carinthia, Austria. The pre-existing mine is located in a mining-friendly region with multiple mineral discoveries in the surrounding area. The property features a high-grade lithium resource at an average grade of one percent lithium hydroxide, with a total resource of 12.88 million tonnes based on resources measured, indicated and inferred in zone 1 only.
The Wolfsberg Lithium project resource has the potential to double based on positive drill results in another zone on the property.
Based on the definitive feasibility study (DFS) released in March 2023, Wolfsberg Lithium Project is well positioned to become a leading producer of battery-grade lithium hydroxide in Europe. It is set to deliver high returns, leveraging low operating costs, and benefiting from a lithium market that is anticipated to be in structural undersupply during most of the life of mine. The battery-grade lithium hydroxide monohydrate (LHM) prices modeled in the DFS are projected to be at a 39-percent discount to current spot prices in 2025 and then escalate by 2 percent per annum. The estimated capex is US$866 million which supports a post-tax NPV of US$1.5 billion.
European Lithium has established several strategic relationships with an aim to deliver value to the Wolfsberg Lithium Project through development and during production. This includes a partnership with KMI for liaising with Austrian authorities.
The company commissioned Dorfner Anzaplan to construct the pilot plant, which was successfully completed on schedule. Anzaplan has also overseen the completion of metallurgical test work on bulk ore extractions. Testing will allow significantly higher recovery rates at the start of production as opposed to only assessing metallurgical data from the core as other mining companies often do, giving European Lithium the advantage of a streamline refinement process.
The company has support from the European Battery Alliance, GREENPEG and other government initiatives, believing it has the potential to become a major, first-to-market producer of lithium in Europe. The company also remains committed to clean production in an effort to support sustainability.
Based on the DFS, the company plans to begin the permitting process of its Wolfsberg Lithium project and prepare the mining plan for the mining authority to authorize the mine and concentrator construction. Afterward, the company will determine the approval requirements of the carbonate hydroxide conversion plant with the Energy Information Administration (EIA) and then initiate the final financing plan.
European Lithium, through its wholly owned Austrian subsidiary ECM Lithium Aľ GmbH (ECM), signed a binding long-term lithium offtake agreement with top-tier European auto manufacturer BMW to secure the company’s first offtake of battery grade lithium hydroxide from its Wolfsberg Lithium Project in Austria.
The company is aiming to commence production of lithium hydroxide from the project in 2027 — subject to funding and approvals by the Austrian government.
In a bid to expand its project portfolio, European Lithium executed a binding Heads of Agreement with 2743718 Ontario Inc., a subsidiary of Richmond Minerals (TSXVRMD), to acquire 100 percent of the rights, title and interest in the Bretstein-Lachtal Project, Klementkogel Project and the Wildbachgraben Project, a group of exploration licenses covering 114.6 square kilometers, targeting lithium with known occurrences in the Styria mining district of Austria.Company Highlights
- European Lithium is a mining exploration and development company focused on exploring, identifying and acquiring lithium in Europe.
- The company aims to become the first local lithium supplier into an integrated European battery supply chain.
- The company’s focus is on its wholly owned advanced Wolfsberg Lithium Project (Wolfsberg) located in Carinthia, Austria.
- Wolfsberg is a high-grade lithium resource at an average grade of one percent lithium oxide, with a total resource of 12.88 million tonnes based on measured, indicated and inferred resources in zone one only.
- Wolfsberg’s definitive feasibility study results demonstrate potential to deliver high returns, leveraging low operating costs, and benefiting from a lithium market that is anticipated to be in structural undersupply during most of the life of mine.
- The Wolfsberg resource estimate has significant upside with the potential to double based on positive drill results.
- Through its wholly owned Austrian subsidiary ECM Lithium Aľ GmbH (ECM), European Lithium signed a binding long-term lithium offtake agreement with top-tier European auto manufacturer BMW AG (BMW) to secure the company’s first offtake of battery-grade lithium hydroxide from Wolfsberg.
- The company has signed a binding agreement to build a Saudi Arabia-based hydroxide processing plant in partnership with Obeikan and deliver significant cost savings.
- The company is led by a management team with decades of experience and success in the mining and finance markets.
- European Lithium entered into a business combination agreement with Sizzle Acquisition, a US special purpose acquisition company, to which European Lithium will sell down its interest in its wholly owned Wolfsberg Lithium Project (Wolfsberg and Wolfsberg Lithium Project) and merge with Sizzle via a newly formed, lithium exploration and development company named, Critical Metals Corp.
- European Lithium has acquired 100 percent of the rights, title and interest in the Bretstein-Lachtal Project, Klementkogel Project and the Wildbachgraben Project, a group of exploration licenses covering 114.6 square kilometers, targeting lithium with known occurrences in the Styria mining district of Austria and nearby the Wolfsberg Lithium Project
- The company received high-grade lithium assays from sampling undertaken at various prospects within the Eastern Alps Lithium Satellite Projects, located in Austria, which are held 20 percent by European Lithium and 80 percent by EV Resources Limited (ASX: EVR).
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Argentina’s Lithium Resource Holds Potential to Power the Global Energy Transition
The significance of Argentina's lithium resources is underscored by recent industry movements. For instance, Rio Tinto's (ASX:RIO,NYSE:RIO,LSE:RIO) $6.7 billion planned acquisition of Arcadium Lithium (NYSE:ALTM,ASX:LTM) highlights the growing interest in brine projects and the strategic value of their location within the Lithium Triangle.
This move signals a broader trend of major players recognising the potential of Argentina's lithium deposits.
The Lithium Triangle: A geological profile
The Lithium Triangle, aptly named for its abundance of the lightweight metal, is the world's largest source of lithium. This region holds the key to meeting the surging demand for lithium-ion batteries that power EVs and store renewable energy. Argentina, with its vast salt flats, is particularly well-positioned to capitalise on this demand.
This region’s extensive salt flats are the result of ancient lakes that have evaporated over millions of years. These salars are underlain by vast aquifers containing lithium-rich brines, formed through the weathering of lithium-bearing rocks. The concentration of lithium in these brines is exceptionally high, with some areas reporting concentrations up to 1,500 milligrams per litre (mg/L), significantly higher than deposits found elsewhere. This unique geological formation, coupled with the arid climate that promotes natural evaporation, creates ideal conditions for lithium extraction.
The geological stability of the region, marked by minimal tectonic activity, further enhances its attractiveness for long-term mining operations. These factors combine to make Argentina's lithium resources not only abundant but also economically viable and strategically accessible for extraction.
Argentina's lithium production primarily relies on brine extraction, a method that offers several advantages over traditional hard rock mining. This process involves pumping lithium-rich brine from underground reservoirs and allowing it to evaporate in large ponds, leaving behind concentrated lithium compounds.
The benefits of brine extraction include:
- Lower production costs compared to hard rock mining
- Reduced environmental impact due to less intensive mining operations
- Higher-grade lithium with fewer impurities, ideal for battery production
These factors contribute to Argentina's competitive edge in the global lithium market, making its projects particularly attractive to investors and battery manufacturers alike.
Spotlight on excellence: Hombre Muerto West project
A prime example of Argentina's lithium potential is Galan Lithium's (ASX:GLN) Hombre Muerto West (HMW) project. Located in the heart of Argentina's lithium-rich Salar del Hombre Muerto, this project exemplifies the high-grade, low-impurity brine that makes Argentine lithium so valuable.
Key features of the HMW project include:
- High-grade lithium brine with concentrations of 859 mg/L
- Low levels of impurities, reducing processing costs
- Strategic location near established operations like Livent Corporation's El Fenix site
- A substantial resource of approximately 8.6 million tonnes of lithium carbonate equivalent
The project's proximity to existing operations enhances its value proposition, potentially allowing for shared infrastructure and knowledge transfer. This strategic positioning within the Lithium Triangle underscores the importance of location in the lithium industry.
Wood Mackenzie’s emissions benchmarking service has also placed HMW within the first quartile of the industry greenhouse gas emissions curve, making the project a globally significant, long-term source of lithium.
Argentina's commitment to lithium production
Recognising the immense potential of its lithium resources, Argentina has taken significant steps to foster growth in its lithium industry. The government has implemented a supportive regulatory framework aimed at attracting investment and accelerating project development.
Key initiatives include:
- A $7 billion investment plan to boost lithium production
- Projected export growth from $1.7 billion in 2022 to $5 billion by 2025
- Streamlined permitting processes for lithium projects
- Incentives for companies investing in lithium extraction and processing
These efforts are expected to significantly increase Argentina's lithium output, solidifying its position as a major player in the global supply chain.
Investment potential
The combination of high-grade resources, favorable extraction methods and supportive government policies makes Argentina's lithium projects highly attractive to investors. Companies like Galan Lithium, with their focus on high-grade brine assets, are well-positioned to capitalise on the growing demand for lithium in the clean energy sector.
Key factors driving investment interest in Argentina’s lithium sector include:
- Lower production costs compared to hard rock lithium mining
- High-quality lithium suitable for high-performance batteries
- Increasing global demand for lithium, driven by EV adoption and renewable energy storage
- Argentina's commitment to expanding its lithium industry
As the world transitions towards cleaner energy sources, the importance of securing a stable lithium supply becomes paramount. Argentina's lithium projects offer a compelling opportunity for investors looking to participate in this global shift.
Investor takeaway
Argentina's strategic position in the Lithium Triangle makes it a crucial player in the global lithium supply chain.
With its high-grade brine resources, favorable extraction methods and supportive government policies, the country is poised to significantly impact the future of clean energy technologies.
As projects like Galan Lithium's HMW continue to develop, and as global demand for lithium surges, Argentina's strategic importance in the lithium market is set to grow. For investors, policymakers and industry stakeholders, keeping a close eye on developments in Argentina's lithium sector will be crucial in navigating the evolving landscape of the global energy transition.
This INNSpired article is sponsored by Galan Lithium (ASX:GLN,FSX:9CH). This INNSpired article provides information which was sourced by the Investing News Network (INN) and approved by Galan Lithiumin order to help investors learn more about the company. Galan Lithium is a client of INN. The company’s campaign fees pay for INN to create and update this INNSpired article.
This INNSpired article was written according to INN editorial standards to educate investors.
INN does not provide investment advice and the information on this profile should not be considered a recommendation to buy or sell any security. INN does not endorse or recommend the business, products, services or securities of any company profiled.
The information contained here is for information purposes only and is not to be construed as an offer or solicitation for the sale or purchase of securities. Readers should conduct their own research for all information publicly available concerning the company. Prior to making any investment decision, it is recommended that readers consult directly with Galan Lithiumand seek advice from a qualified investment advisor.
World Lithium Outlook 2025
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World Lithium Outlook 2025
Table of Contents
Lithium Market 2024 Year-End Review
Lithium Market 2024 Year-End Review
Lithium prices remained low in 2024 on the back of oversupply and weak demand.
Lithium carbonate spent the majority of the year contracting, shedding 22 percent between January and December. Prices started the 12 month period at US$13,160.20 per metric ton (MT) and ended it at US$10,254.16.
The weak price environment was the result of a supply glut, a factor that S&P Global expects to persist in 2025.
In a November report, the firm forecasts a “global surplus of approximately 33,000 metric tons of lithium carbonate equivalent in 2025, a decrease from the 84,000 metric tons surplus projected for 2024 and 2023's 120,000 metric tons."
Against that backdrop, S&P is projecting continued lithium carbonate price declines next year, with the annual average price projected at US$10,542 in 2025, down from US$12,374 in 2024 and a steep drop from US$40,579 in 2023.
Adding to price pressure, advances in alternative battery technologies are posing challenges to lithium's traditional dominance. In 2024, these factors combined to create a year of volatility and transformation for the critical battery metal.
Supply surplus weighs on lithium prices
Market saturation emerged as a key theme for lithium early in the year as a continued surplus weighed on prices.
The excess comes on the back of steadily growing mine supply over the last four years. In 2020, the annual global mine supply tally was 82,500 MT, a number that more than doubled in 2023 to 180,000 MT.
Prices for lithium carbonate remained in the US$13,000 range for January, but began to rise in mid-February, ultimately reaching a year-to-date high of US$15,969.26 on March 14.
The price momentum was attributed to announcements that some new projects were being delayed, while operations in development and production were being transitioned to care and maintenance.
“We also began to see some supply response to the persistent lower price environment, with the announcement of delays to expansion plans and layoffs at some lithium producers or aspirants,” Adam Megginson, analyst at Benchmark Mineral Intelligence, told the Investing News Network during the first quarter.
“I only expect this to palpably impact the supply picture in 12 to 18 months, as that is when these expansions were planned to ramp.”
Record-setting lithium M&A activity
This precarious landscape was fertile ground for M&A deals, which occurred throughout the year.
“As lithium projects struggle to stay above water, analysts also expect M&A activity to increase as major producers with positive cash flow try to find deals in the market while junior companies try to sell projects in a market where private capitals are scarcer than previous years," a February 12 report from S&P Global states.
2024 started with the completion of Livent (NYSE:LTHM) and Allkem's merger of equals. The deal saw the two companies combine under the Arcadium Lithium (NYSE:ALTM,ASX:LTM) banner,boasting a market cap of US$5.5 billion and an extensive portfolio of lithium production assets and resources across the Americas and Australia.
By September, the weak price environment had forced Arcadium to halt expansion plans for its Mount Cattlin spodumene operation in Western Australia, with plans to transition to care and maintenance by mid-2025.
Despite that setback, Arcadium made headlines once again a month later as global mining major Rio Tinto (ASX:RIO,NYSE:RIO,LSE:RIO) made a move to acquire the multinational lithium company. Once the US$6.7 billion all-cash transaction closes, Rio Tinto will become the third largest producer of lithium globally.
Another notable 2024 lithium deal was Pilbara Minerals' (ASX:PLS,OTC Pink:PILBF) August plan to acquire Latin Resources (ASX:LRS,OTC Pink:LRSRF) in an all-stock deal valued at approximately US$369.4 million.
The acquisition will grant Pilbara Minerals access to Latin Resources' flagship Salinas lithium project in Brazil's Minas Gerais state, enhancing its presence in the burgeoning North American and European battery markets.
In late November, Sayona Mining (ASX:SYA,OTCQB:SYAXF) and US-based Piedmont Lithium (ASX:PLL,NASDAQ:PLL) unveiled a merger that is set to create a consolidated entity valued at about US$623 million.
These deals helped make lithium one of the most active M&A segments in the critical minerals space.
“Lithium stands out with both the highest volume of deals and largest total deal value from 2020-24 (US$24 billion),” a 2025 critical minerals outlook from Allens reads. “Deal volume for lithium M&A deals peaked in 2023, but remains relatively high in 2024, showing comparable volume to 2022.”
Global EV sales rebound amid trade tensions and policy shifts
As one of the largest end-use segments for lithium, the EV industry is a key factor in the market.
Weak North American EV sales early in the year offset some positivity out of Asian markets; however, in late Q3 and Q4, global sales began to pick up momentum. In October, the Chinese EV market set another monthly record with 1.2 million units sold, a 6 percent month-on-month increase. According to data from research firm Rho Motion, EV sales between January and October were up 24 percent compared to the same period in 2023.
“The global EV market is now picking back up again, hitting record sales for the second month in a row. Most of the growth is coming from China and Western manufacturers are clearly feeling threatened by this. The US market remains buoyant in part thanks to Inflation Reduction Act (IRA) funding for consumers switching to electric which may be at risk with the start of the Trump presidency,” said Charles Lester, data manager at Rho Motion.
However, there is speculation that President-elect Donald Trump will dismantle key components of the IRA, particularly targeting the US$7,500 EV tax credit. His transition team has indicated intentions to eliminate this consumer incentive, which was designed to promote EV adoption and bolster the country's clean energy sector.
Critics have argued that removing the tax credit could hinder domestic EV sales and potentially benefit foreign competitors, notably China, by undermining investments in the US battery supply chain.
With that in mind, the proposed repealing of the tax credit has raised concerns among automakers and environmental advocates about the future of America's competitiveness in the rapidly growing global EV market.
The Biden administration made efforts to address that issue in May, when it sharply increased tariffs on Chinese EVs, raising duties to over 100 percent to counter alleged unfair trade practices. While the move was made to bolster domestic EV production and sales, critics said it could disrupt supply chains and raise consumer costs.
Following suit in August, North American neighbor Canada levied a 100 percent tariff on Chinese EVs, aligning with the US and EU to counter China’s trade practices. At the time, Prime Minister Justin Trudeau criticized China’s policies as unfair, citing their impact on Canadian industries and workers. He emphasized the need to protect the domestic EV and metal sectors from overcapacity caused by China’s state-driven production.
Canada also introduced a 25 percent surtax on Chinese steel and aluminum imports.
In response, China filed a formal complaint with the World Trade Organization over Canada’s decision to impose tariffs on Chinese-made EVs, steel and aluminum. Beijing criticized the measures as protectionist and in violation of international trade rules. China also filed similar complaints against the US and EU.
As uncertainty continues to plague the lithium space, analysts are projecting a sustained low-price environment into 2025, despite the production cuts and project delays that were prevalent in 2024.
"With the production cuts announced so far having primarily been about slowing future growth rather than immediate production, strong mine supply growth is still expected in the short-term, namely 24.7 percent in 2024 and 17.4 percent in 2025," Macquarie analysts told S&P Global as 2024 drew to a close.
"This suggests lower prices will need to persist for longer in the absence of any further price-induced cuts that rebalance the market sooner than our forecasts indicate.”
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Securities Disclosure: I, Georgia Williams, hold no direct investment interest in any company mentioned in this article.
Editorial Disclosure: The Investing News Network does not guarantee the accuracy or thoroughness of the information reported in the interviews it conducts. The opinions expressed in these interviews do not reflect the opinions of the Investing News Network and do not constitute investment advice. All readers are encouraged to perform their own due diligence.
Lithium Market Forecast: Top Trends for Lithium in 2025
After a tumultuous 2024 that saw lithium carbonate prices tumble 22 percent amid a global supply glut, analysts are predicting another year of volatility for the important battery metal.
Even so, some balance is expected to return — according to S&P Global, the lithium surplus is projected to narrow to 33,000 metric tons in 2025, down from 84,000 metric tons in 2024, as production cuts begin to temper excess supply.
Demand from the electric vehicle (EV) market remains a key driver, with China maintaining its dominance after record-breaking sales in late 2024. In North America, the EV sector will face uncertainty under the Trump administration.
As 2025 unfolds, the lithium sector will also have to navigate geopolitical tensions, including rising tariffs on Chinese EVs and escalating trade disputes that are reshaping global supply chains.
“The name of the game in lithium (in 2025) is oversupply. Excess production in places like Africa and China, coupled with softer EV sales, has absolutely hammered the lithium price both in 2023 and 2024. I wouldn't think we can dig ourselves out of this hole in 2025 despite reliably strong EV sales,” said Chris Berry, president of House Mountain Partners.
In his view, the next 12 months could be unpredictable in terms of lithium price activity.
“Lithium price volatility is a feature of the energy transition and not a bug,” he said. “You have a small but fast-growing market, opaque pricing, legislation designed to rapidly build critical infrastructure underpinned by lithium and other metals, and this is a recipe for boom-and-bust cycles demonstrated by extremely high and extremely low pricing.”
For Gerardo Del Real of Digest Publishing, seeing prices for lithium contract by 80 percent over the last two years evidences a bottoming in the lithium market and also serves as a strong signal.
“I think the fact that we're up some 7 percent to close the year in 2024 in the spot price leads me to believe that we're going to see a pretty robust rebound in 2025. I think that's going to extend to the producers that have obviously been affected by the lower prices, but also to the quality exploration companies,” Del Real said in December.
He believes contrarian investors with a mid to long-term outlook have a prime opportunity to re-enter the space.
Lithium market to see more balance in 2025
As mentioned, widespread lithium production cuts are expected to help bring the sector into balance in 2025.
William Adams, head of base metals research at Fastmarkets, told the Investing News Network (INN) via email that output cuts for the battery metal have already started inside and outside of China.
“We expect further cutbacks if prices do not recover soon in the new year. While we have seen some cuts, we are also seeing some producers continue with their expansion plans and some advanced junior miners ramp up production. So we are now in a situation where we are waiting for demand to catch up with production again," he said.
Adams and Fastmarkets expect to see lithium demand catch up to production in late 2025. However, he warned that refreshed demand is unlikely to push prices to previous highs set in 2022.
“We do not expect to see a return to the highs we saw in 2022, as there are more producers and mines around now and there has been a buildup of stocks along the supply chain, especially in China,” he said.
“This should prevent any actual shortage being seen in 2025, but stocks can be held in tight hands, and if the market senses a tighter market, then they may be encouraged to restock, which could lift prices. But the restart of idle capacity in such a case is likely to keep prices rises in check," Adams added.
Analysts at Benchmark Mineral Intelligence are taking a similar stance, with a slightly more optimistic tone.
“In 2025, prices are likely to remain fairly rangebound. This is because Benchmark forecasts a relatively balanced market next year in terms of supply and demand,” said Adam Megginson, senior analyst at the firm. He also referenced output reductions in Australia and China, noting that they may not be as impactful as some market watchers anticipate.
This past July, Albemarle (NYSE:ALB), announced plans to halve processing capacity in Australia and pause an expansion at its Kemerton plant amid the prolonged lithium price slump. One of the plant’s two processing trains will be placed on care and maintenance, while construction of a third train has been scrapped.
“These supply contractions are likely to be balanced by capacity expansions due to come online in China in 2025, as well as in African countries like Zimbabwe and Mali,” Megginson said.
“Expect supply from these other regions to play a bigger role in the market in 2025.”
Unpredictable geopolitical situation to impact sector
Geopolitics is likely to play a key role in the lithium market this year, both directly and indirectly.
In 2024, the Biden administration raised tariffs on Chinese EVs to over 100 percent to counter alleged unfair trade practices, aiming to boost domestic production, but drawing criticism over potential supply chain disruptions.
Canada followed suit with similar 100 percent tariffs on Chinese EVs, as well as a 25 percent surcharge on Chinese steel and aluminum, citing the need to protect local industries. China has responded with World Trade Organization complaints against Canada and the US, along with the EU, labeling the measures protectionist.
Whether these tariffs against China will be enough to bolster the domestic North American EV market remains to be seen; however, the issue could become even more complicated if US President-elect Donald Trump makes good on his threats to levy tariffs on America's continental trade partners, Canada and Mexico.
Del Real doesn't expect US tariffs on critical minerals like lithium, but expressed concerns about a trade war.
“The bottom line is getting into a tit-for-tat with China is a dangerous proposition because of the leverage they have, especially in the commodity space, and so the tariffs are going to be passed down to consumers," he said. In his view, Trump's tariff threats could be more of a negotiating tactic than a sustained strategy.
More broadly, the experts INN heard from expect resource nationalism, near shoring and supply chain security to play prevalent roles in the lithium market and the critical minerals space as a whole.
“There's no doubt that lithium in particular has become politicized as policy makers across the globe have awoken from their slumber and realized that dependence on critical materials and supply chains in a single country is a bad idea for both economic and national security,” said Berry, noting that China had this realization decades ago.
“There is no easy fix, and you're looking at roughly a decade before any western countries have any sort of a regionalized or 'friend-shored' supply chain. Accelerating this would involve massive capital investment, patience and most importantly, political will. North America in particular has made great strides in recent years, but we have a long way to go. I'm not sure if fully decoupling from China is even a good idea," the battery metals expert added.
For Benchmark’s Megginson, 2025 could be a year of increased domestic development.
“We have seen several countries attempting to adopt some form of 'resource nationalism.' In some cases, this has been driven by wanting to onshore the production of critical minerals that are necessary for defense and nuclear applications. In others, it stems from a desire to be more self-sufficient so they can be more resilient to supply shocks.”
Proposed tariffs from Trump could also serve as a catalyst for US lithium output.
“With the incoming Trump administration, everyone has their eyes on how promises of increased tariffs will be implemented. Ultimately, heavier tariffs would accelerate efforts to onshore capacity in the US,” Megginson said.
“We may see the EU following suit with tariffs. There has been much said of the diversification of the lithium market away from China, but many of those efforts stalled in 2024 as the downswing in prices and a shifting geopolitical landscape made these endeavors more challenging," added the Benchmark senior analyst.
This nationalistic focus is also projected to impact refinement capacity and jurisdiction.
“While extracting the lithium from the ground has been successfully done in non-incumbent countries, such as in Brazil, Central Africa and Canada, with others expected to follow, the building of refining capacity has proved more difficult from a know-how and cost point of view, with a number of companies announcing that they are reining in some expansion plans, canceling some building projects or delaying decisions,” Adams of Fastmarkets said.
He went on to note that South Korea is an area to watch.
“Outside of China, South Korea has successfully ramped up new refining capacity, while Australia has had mixed results. The general issue is it’s hard to get the process right, and the CAPEX and OPEX outside of China means it is hard to be competitive. It will be interesting to see how Tesla’s (NASDAQ:TSLA) new Texas plant ramps up,” Adams noted.
Elsewhere, Adams pointed to the desire to secure supply chains. “Resource nationalism has also been an issue in some jurisdictions, with more countries now wanting processing capacity to be built in the country, and in order to force that they have banned the export of lithium-bearing ores. Zimbabwe a case in point,” he told INN.
Adams also pointed to Chile’s efforts to partially nationalize lithium producers, with the government mining company having controlling stakes in producers. “This could deter international investment in developing these mines,” he said. “In other metals, Indonesia has been very successful in playing the resource nationalism card.”
EV and ESS sectors to be key lithium price drivers
While the factors mentioned will undoubtedly impact the lithium industry in 2025, the market's most pronounced driver is the EV sector, and to a lesser extent the energy storage system (ESS) space.
“Demand for lithium-ion batteries is set to continue to grow rapidly in 2025. Benchmark forecasts that EV and ESS-related demand for lithium will both increase by over 30 percent year-on-year in 2025,” said Megginson.
To satiate this uptick in demand, “additional volumes of lithium will need to come to market.”
Megginson also noted that robust ESS demand is a positive demand signal for lithium-iron-phosphate (LFP) cathode chemistries, but is unlikely to outweigh the mounting EV demand in China.
This sentiment was echoed by Berry of House Mountain Partners, who expects the EV and ESS sectors to continue dominating market share in terms of lithium end use. “EVs and ESS are roughly 80 percent of lithium demand, and this shows no signs of abating. Other lithium demand avenues will grow reliably at global GDP, but the future of lithium is tied to increasing proliferation of the lithium-ion battery,” he commented to INN.
Despite weak EV sales in Europe and North America in 2024, Fastmarkets’ Adams expects to see a recovery in demand from these regions, paired with strong sales in China. The dip in European sales, particularly in Germany after subsidy cuts in early 2024, mirrors China’s 2019 slowdown following subsidy reductions. However, as with China, the decline appears temporary, with a recovery expected as stricter emissions penalties take effect in Europe in 2025.
Additionally, Adams pointed to the growing adoption of extended-range EVs, which address range anxiety and use larger batteries than plug-in hybrid EVs, as a catalyst for lithium demand.
However, he noted that the outlook for EVs in the US remains uncertain as Trump takes the helm.
“ESS demand has been particularly strong, especially in China, and we expect that to continue as the need to build renewable energy generation capacity is ever present and has a wide footprint. For example, ESS buildout in India is strong, whereas demand for EVs is less strong, but again it is strong for 2/3 wheelers," said Adams. He added that low prices for battery raw materials have lowered prices for lithium-ion batteries, benefiting ESS projects.
Ultimately the lithium market is expected to see volatility in 2025, but could also present opportunities.
"I can see a 100 to 150 percent rebound in the lithium spot price easily in 2025. And again, I think there's a lot of opportunity there,” Del Real of Digest Publishing emphasized to INN.
For Megginson, the sector will be shaped by geopolitics and relations moving forward.
“Policy will have a huge role to play in driving price trends in 2025," he said.
"For instance, there remains uncertainty around how the tariffs promised by an incoming Trump administration in the US would be implemented, and how they could reshape the global lithium landscape."
Don't forget to follow us @INN_Resource for real-time updates!
Securities Disclosure: I, Georgia Williams, hold no direct investment interest in any company mentioned in this article.
Editorial Disclosure: Beyond Lithium and Grid Battery Metals are clients of the Investing News Network. This article is not paid-for content.
The Investing News Network does not guarantee the accuracy or thoroughness of the information reported in the interviews it conducts. The opinions expressed in these interviews do not reflect the opinions of the Investing News Network and do not constitute investment advice. All readers are encouraged to perform their own due diligence.
6 Best-performing Lithium Stocks of 2024
Global lithium stocks and the overall lithium marketfaced a turbulent 2024, marked by oversupply, softer-than-expected electric vehicle (EV) demand and geopolitical tensions that reshaped the industry.
Prices for lithium carbonate plummeted 22 percent, driven by a supply glut and weaker demand outside of China.
Amid this challenging landscape, mergers and acquisitions surged. The year started out with the completion of Livent and Allkem's merger, which birthed Arcadium Lithium (NYSE:ALTM,ASX:LTM). Then, in October, major diversified miner Rio Tinto (ASX:RIO,NYSE:RIO,LSE:RIO) announced plans to acquire Arcadium.
Meanwhile, EV demand rebounded late in the year, led by record sales in China.
Even against this tumultuous backdrop, some lithium stocks listed in Canada and Australia performed strongly. Below the Investing News Network has gathered the top gainers year-to-date using TradingView’s stock screener. All lithium stocks listed had market caps above $50 million in their respective currencies when data was gathered.
Data for Canadian stocks was collected on December 27, 2024, and data for Australian stocks was gathered on December 31, 2024. While US lithium companies were considered, none were up year-to-date at the time data was collected.
1. Q2 Metals (TSXV:QTWO)
Year-to-date gain: 220 percent
Market cap: C$106.11 million
Share price: C$0.80
Exploration firm Q2 Metals is exploring its flagship Mia lithium property in the Eeyou Istchee James Bay region of Québec, Canada. The property contains the Mia trend, which spans over 10 kilometers. Also included in Q2 Metals' portfolio is the Stellar lithium property, comprised of 77 claims and located 6 kilometers north of the Mia property.
In 2024, Q2 Metals also focused on exploring the Cisco lithium property, which is situated in the same region. On February 29, the company entered into three separate option agreements to gain a 100 percent interest in Cisco. The news caused its share price to skyrocket, reaching a Q1 high of C$0.54 on March 4.
Q2 Metals closed the acquisition of Cisco in June and now wholly owns the project.
In mid-May, the company announced the start of a summer drill program at the Cisco property. It has since released multiple progress updates, including the confirmation of eight new mineralized zones on July 8.
On October 1, Q2 Metals shared assays from the drill program at the Cisco site. The company's share price spiked on the news, ultimately climbing to an all-time high of C$1.48 on October 11.
“These assays continue to validate the potential and scale of the Cisco Property as that of a larger mineralized system,” said Neil McCallum, vice president of exploration. “One important observation of these results is the higher-grade nature of the larger mineralized system as we test and track the system progressing to the south.”
By the end of the Cisco drill program, the company had drilled 17 holes covering 6,360 meters in total. Q2 Metals released the final results from the campaign on December 17.
As of mid-December, Q2 Metals had the exclusive right to acquire a 100 percent interest in 545 additional mineral claims, which would triple its land position at the Cisco lithium property. The new claims, located south of the original property, enhance prospects for development and future mining infrastructure.
2. Power Metals (TSXV:PWM)
Year-to-date gains: 73.08 percent
Market cap: C$67.57 million
Share price: C$0.45
Exploration company Power Metals holds a portfolio of diversified assets in Ontario and Québec, Canada.
In late February, Power Metals commenced a winter drill program at its Case Lake property in Northeastern Ontario. The company said the program was designed to expand and define lithium-cesium-tantalum mineralization, building on previous work that revealed high-grade lithium and cesium mineralization.
Company shares rose to an H1 high of C$0.47 at the end of March. The increase coincided with the news that Power Metals had staked the 7,000 hectare Pelletier project, consisting of 337 mineral claims in Northeast Ontario.
According to the company, the project features lithium-cesium-tantalum potential, with peraluminous S-type pegmatitic granites intruding into metasedimentary and amphibolite formations.
During the fourth quarter, Power Metals identified a new pegmatite zone at Case Lake through soil sampling. The samples from the zone, located north-northwest of its West Joe prospect, revealed elevated levels of cesium, tantalum, lithium and rubidium, highlighting promising drill targets for the winter program.
The company also launched a Phase 2 drone magnetic survey that is geared at refining its structural model for critical minerals targets at West Joe and the Main zone ahead of 2025 exploration efforts.
In a December 10 exploration update, Power Metals said its partner Black Diamond Drilling, a First Nations-owned drilling company, had completed 16 drill holes for 971 meters of the planned 2,000 meter program. Environmental studies were also ongoing. Shares rose over the following week to a year-to-date high of C$0.49 on December 16.
3. Lithium Chile (TSXV:LITH)
Year-to-date gains: 45.28 percent
Market cap: C$163 million
Share price: C$0.77
South America-focused Lithium Chile owns several lithium land packages in Chile and Argentina.
On April 9, the company announced a 24 percent increase in the resource estimate for its Arizaro property in Argentina. The new total for the project is 4.12 million metric tons (MT) of lithium carbonate equivalent, with 261,000 MT in the measured category, 2.24 million MT in the indicated category and 1.62 million MT in the inferred category.
Not long after, on April 18, the company reported the creation of two wholly owned Canadian subsidiaries — Lithium Chile 2.0 and Kairos Gold — as part of a spinout to separate its Chilean and Argentinian assets.
Lithium Chile will retain its Argentinian lithium projects, and transfer its 111,978 hectares of Chilean lithium properties to Lithium Chile 2.0 and its portfolio of gold assets in Chile to Kairos Gold.
In a July operational update for the Arizaro project, the company highlighted that a drill hole had encountered "a brine-rich, sandy formation encountered from 161 to 500-metres."
In an August announcement, Lithium Chile noted that the spinout of Lithium Chile 2.0 was reliant on finalizing a strategic deal for Arizaro. As for Kairos Gold, its spinout was effective on December 4.
In mid-December, Lithium Chile penned a letter of intent to sell its 80 percent stake in Arizaro.
The company said the buyer “is a large, Asian based company founded over two decades ago (and) a diversified enterprise with significant interests in mining, renewable energy, and technology sectors.”
The move to sell its flagship asset signals a strategic realignment for Lithium Chile. Although company shares reached a year-to-date high of C$0.88 in March, the recent sale news has pushed shares to the C$0.80 level.
Top Australian lithium stocks
1. Vulcan Energy Resources (ASX:VUL)
Year-to-date gain: 84.48 percent
Market cap: AU$1.19 billion
Share price: AU$5.35
Europe-focused Vulcan Energy Resources aims to support a carbon-neutral future by producing lithium and renewable energy from geothermal brine. The company is currently developing the Zero Carbon lithium project in Germany's Upper Rhine Valley. Vulcan is utilizing a proprietary alumina-based adsorbent-type direct lithium extraction (DLE) process to produce lithium with an end goal of supplying sustainable lithium for the European EV market.
On April 11, Vulcan announced the commencement of lithium chloride production at its lithium extraction optimization plant in Germany. According to the company, the milestone marks the first lithium chemical production in Europe using local supply. The plant has consistently exhibited over 90 percent lithium extraction efficiency.
The company already has binding lithium offtake agreements in place with major automakers and battery manufacturers, and expects to supply enough lithium for 500,000 EVs during the first phase of production.
During Q3, Vulcan received its first licenses for lithium and geothermal exploration in Alsace, France. The permits cover 463 square kilometers, expanding Vulcan's total licensed area in the Upper Rhine Valley to 2,234 square kilometers.
In early August, Vulcan began commissioning its downstream lithium hydroxide optimization plant (CLEOP) near Frankfurt, Germany, which will process the lithium chloride concentrate from its DLE plant.
A mid-October release from Vulcan outlines a memorandum of understanding with industrial software designer AVEVA. The partnership will see AVEVA build a digital framework for Vulcan’s Zero Carbon lithium project.
Also in October, the company earned S&P Global’s highest "dark green" sustainability rating, a first for the mining sector, under its Green Financing Framework. On November 8, Vulcan announced it had commenced lithium hydroxide production at CLEOP. The milestone coincided with an AU$162 million funding infusion from Germany’s Federal Ministry of Economics and Climate Protection and the European Recovery and Resilience Facility.
To end the year, Vulcan announced the signing of a AU$1.45 billion conditional debt commitment letter with Export Finance Australia and a group of seven commercial banks.
2. Ioneer (ASX:INR)
Year-to-date gain: 6.67 percent
Market cap: AU$353.35 million
Share price: AU$0.16
Australia-listed Ioneer owns the Rhyolite Ridge lithium-boron project in Nevada, US. According to the company, the project is considered the “sole lithium-boron deposit in North America.”
As part of the permitting process for Rhyolite Ridge, Ioneer completed and submitted an administrative draft environmental impact statement (EIS) to the US Bureau of Land Management (BLM) in mid-January. In mid-September, Ioneer announced that the BLM had published the final EIS, moving the company closer to construction.
The comprehensive review process addressed environmental concerns, particularly regarding the protection of the endangered Tiehm's buckwheat plant found at the site. Ioneer has committed to measures aimed at safeguarding the plant's habitat. In October, Ioneer secured final federal approval for Rhyolite Ridge.
The project became the first US lithium mine authorized under the Biden administration.
Rhyolite Ridge is projected to produce sufficient lithium for approximately 370,000 EV batteries annually. Construction is slated to commence in 2025, with production expected by 2028.
3. Prospect Resources (ASX:PSC)
Year-to-date gain: 2.25 percent
Market cap: AU$52.03 million
Share price: AU$0.09
Africa-focused explorer Prospect Resources holds a diversified portfolio of assets in Zimbabwe, Zambia and Namibia. The company’s lithium prospects, Omaruru and Step Aside, are in Namibia and Zimbabwe, respectively.
In late June, Prospect released an update on its exploration activities, reporting strong assay results from Phase 4 diamond drilling at the Step Aside lithium project in Zimbabwe and follow-up Phase 2 drilling at the Omaruru lithium project. Managing Director Sam Hosack highlighted the significant mineralization potential at both projects.
Moving forward, Prospect plans to slow down spending at its lithium projects as it turns to its newly acquired Mumbezhi copper project in Zambia. The company believes it can monetize Step Aside in the near term to aid in this goal.
In its June quarterly results, Prospect noted the completion of drilling and fieldwork for a Phase 4 diamond drilling program at the Step Aside lithium project in Zimbabwe, with no further exploration planned.
The project is being prepared for sale to help fund the Mumbezhi copper project.
Meanwhile, Phase 2 drilling at the Omaruru lithium project is complete, and the company has reduced spending to holding costs as its focus shifts to the Mumbezhi project.
In its September quarterly report, Prospect said it was discontinuing its Bikita Gem earn-in project in Southeastern Zimbabwe after drilling results failed to identify economically viable volumes of petalite-rich lithium mineralization.
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Securities Disclosure: I, Georgia Williams, hold no direct investment interest in any company mentioned in this article.
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