Scarlett Evans
7 min read
In This Article:
The global lithium market is undergoing a period of flux. Following years of solid growth, prices have plummeted from their 2022 peak amid slowing demand for electric vehicles (EVs) and an oversupply from global producers. Overall, the cost of lithium hydroxide fell by around three quarters between 2023 and 2024, and has continued to fall in 2025.
Australia, the world’s largest producer of lithium ore (accounting for 46% of the global total in 2024), felt this decline more sharply than most, forcing several mining operations to pause amid deteriorating market conditions.
However, a rebound may be on the horizon. Analysts expect a resurgence in 2025, fuelled by renewed growth in EV adoption and clean energy storage. Although lithium prices remain difficult to predict, Australian miners are once more betting big on the metal.
With an abundance of active lithium mines and reserves, Australia is well placed to be at the forefront of this lithium opportunity. However, as demand grows, questions have been raised as to how this burgeoning market can remain sustainable and how waste streams can be safely managed.
Strengthening domestic recycling capabilities, developing greener processing methods and building closed-loop supply chains could be key to ensuring that growth in lithium production does not come at the expense of the environment.
By 2040, the International Energy Agency (IEA) expects demand for lithium to be more than 40-times current levels if the world is to meet its Paris Agreement goals. As such, despite the current market volatility, optimism about the future of lithium remains strong.
In this context, Australia has positioned itself to be a leading global supplier.
In 2024, the federal government extended a A$230m ($149.81m) loan to Liontown Resources, which began production at its Kathleen Valley mine last July. The mine is expected to produce around 500,000 tonnes (t) of spodumene concentrate annually. Spodumene is Australia’s main source of lithium.
Meanwhile, Perth-based Pilbara Minerals plans to boost lithium ore production at Pilgangoora by 50% over the next year through its P1000 project.
Crucially, there has been an uptick in interest to build out not only the extraction side of the lithium supply chain but also refineries. For instance, in Western Australia, Covalent Lithium is constructing its own lithium refinery, while Albemarle is operating another refinery in the region.
The motivation behind the shift in focus stems from efforts to diversify critical minerals supply chains and move away from China’s continued dominance. According to the IEA, China currently accounts for 70% of global lithium refining.
