Lithium in Australia - statistics & facts
Following years of solid growth, Australia’s lithium mining industry has experienced one of its most challenging years yet. While global lithium demand is higher than ever with growth forecast to continue, oversupply and weaker-than-expected electric vehicle sales have driven prices of lithium compounds and minerals down to their lowest in years. With prices volatile and difficult to predict, the profitability of mining lithium, once referred to as “white gold” in Australia, has been called into question.
With more lithium miners expected to cut production or delay expansion plans in the medium term, a difficult few years ahead is expected before prices start to rebound and profit margins start to increase. While prices are difficult to predict and heavily influenced by supply and demand, many miners, such as Pilbara Minerals, will continue to invest in their lithium operations, banking on the necessity of the metal in future battery technologies.
Australia plays a critical role in the global lithium supply chain
Australia is one of the leading lithium-producing countries worldwide. While other major lithium producers such as Chile, China, and Argentina obtain lithium from salt flats, Australia mines the lithium-mineral spodumene found in hard-rock deposits in Western Australia. Production of lithium in Australia ramped up from 2017 onwards, with the volume reaching 86 thousand metric tons in 2023. This spodumene is then either exported or refined further into lithium hydroxide before being exported. Currently, the major destination for Western Australia’s lithium spodumene concentrate exports is China. Despite record-high export volumes of both spodumene and lithium hydroxide, earnings are projected to more than halve this year due to falling global lithium prices.Could Australia’s lithium mining industry be at a breaking point?
Among the top three lithium mining companies listed on the ASX, Pilbara Minerals and Mineral Resources both have lithium mining projects within the country itself. Most of Australia’s spodumene producers have been struggling to turn a profit at current prices. Despite a high production volume of lithium spodumene concentrate of Mineral Resources Ltd, the company has halted its lithium mine expansions for the time being. The challenging price environment can also be seen in the latest financial reports, with Pilbara Mineral’s gross profit witnessing a dramatic decline in 2024. Among smaller Australian mining companies, Arcadium Lithium recently announced plans to place its Mt Cattlin hard rock operation into care and maintenance by mid-2025.With more lithium miners expected to cut production or delay expansion plans in the medium term, a difficult few years ahead is expected before prices start to rebound and profit margins start to increase. While prices are difficult to predict and heavily influenced by supply and demand, many miners, such as Pilbara Minerals, will continue to invest in their lithium operations, banking on the necessity of the metal in future battery technologies.
