Up to US$276B of new investment required to meet global lithium demand

Core Insights - A new report estimates that up to US$276 billion in investment may be required to meet the anticipated surge in lithium demand, which could exceed 13 million tonnes by CY50 as the energy transition accelerates [1][3] - The lithium market may face a supply crunch as early as 2028, necessitating immediate action from the industry to align with net zero policies [2][3] Investment Needs - The report indicates that new investment will peak between CY30 and CY34, driven by the need for new mining capacity, refining infrastructure, and regional supply chains [4] - The investment requirement is projected to range from US$100 billion to US$275 billion, depending on the pace of the energy transition [5] Australia’s Position - Australia ranks second globally in lithium reserves and is expected to remain a top supplier through CY27, contributing 36% of world extraction in CY24 and 9% of total global lithium hydroxide by CY27 [5][6] - The annual growth in Australia's mined output is expected to increase from 7.1% to 9.1% between CY24 and CY27 due to a faster-than-expected ramp-up in mine production [7] Demand Drivers - Electric vehicles (EVs) are projected to account for 72% to 80% of lithium consumption across various scenarios, with EV penetration expected to reach approximately 75% by CY40 under country pledges and 95% under a net zero scenario [9] - Energy storage systems (ESS) are also emerging as a significant demand driver, with growth rates of 6% to 7% annually as renewable energy sources dominate new power capacity [10]