Lithium Sector Needs $42 Billion as Pivot From China Adds Costs – by Annie Lee (Bloomberg News – May 16, 2022)

(Bloomberg) — The global lithium industry needs as much as $42 billion of investment by the end of the decade in order to meet demand for the crucial battery-making material, with attempts to build supply chains outside of China subject to much higher costs, according to a data and market-intelligence provider.

The sector will require $7 billion of investment each year from now until 2028, Benchmark Mineral Intelligence said in a report. That would help it meet forecast demand of 2.4 million tons a year by 2030, which is four times higher than the 600,000 tons that’s estimated to be produced in 2022.

The forecast comes as Europe and North America look to reduce their dependency on Chinese imports and develop their own lithium production. That strategy that could require around twice as much capital than relying on getting the refined product from the Asian powerhouse, Benchmark said.

China has enjoyed a stranglehold over the lithium supply chain, bolstered by economic clustering, a high level of expertise, and lower labor and energy costs. “If you want lithium with as little ESG impact as possible, the solution may cost more outside China,” analyst Cameron Perks said in the report.

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