The Global Race to Mine Lithium

With demand set to triple by 2025 and exceed three million tonnes by 2030, lithium has become the backbone of the clean energy economy.

By Namith DP | Aug 25, 2025

A dusty salt flat stretches endlessly across Chile’s Atacama Desert, its pristine white surface concealing the world’s most coveted mineral treasure. Beneath this desolate landscape lies 33 percent of the planet’s lithium reserves—the critical component powering humanity’s electric future. While tourists marvel at the otherworldly beauty of the Salars, mining companies engage in a high-stakes global competition that will determine which nations control the backbone of the clean energy economy.

The lithium race has never been more intense. Global lithium production reached 240,000 metric tons in 2024, representing an 753% increase from just 28,100 metric tons in 2010. Yet this dramatic growth pales in comparison to projected demand. Production needs to triple by 2025 and increase nearly six-fold by 2030 to meet the surging appetite for electric vehicles and energy storage systems.

The Current Leaders: Australia, Chile, and China Dominate Production

Australia: Hard-Rock Mining Giant

Australia leads global lithium mine production with an estimated output of 86,000 metric tons in 2023. The nation’s dominance stems from its extensive hard-rock spodumene deposits, particularly in Western Australia’s Pilbara region. Australia leads the charge with its vast hard-rock lithium mines, offering several advantages over brine extraction methods:

• Faster processing times: Hard-rock extraction produces lithium concentrate within months, compared to 12-24 months for brine evaporation • Weather independence: Mining operations continue regardless of precipitation levels • Higher lithium concentrations: Spodumene ore typically contains 6-7% lithium oxide

Major Australian lithium operations include:

Greenbushes Mine (operated by Talison Lithium): The world’s largest hard-rock lithium mine
Mount Marion (Mineral Resources and Ganfeng Lithium): Produces over 400,000 tons of spodumene concentrate annually
Pilgangoora Project (Pilbara Minerals): Expanded capacity to 850,000 tons per year

Chile: The Brine Powerhouse

Chile holds the world’s largest lithium reserves at 9.3 million metric tons, with the Salar de Atacama region housing approximately 33 percent of the world’s lithium reserve base. Chile leverages its rich lithium brine deposits in the Atacama Desert, where unique geological conditions create ideal extraction environments.

The Atacama’s advantages include: • Ultra-low precipitation: Less than 1mm annual rainfall prevents dilution of brine pools • High evaporation rates: Intense solar radiation accelerates the concentration process • Established infrastructure: Decades of mining operations have created efficient supply chains

SQM and Albemarle Corporation operate Chile’s two major lithium facilities in the Salar de Atacama, combined producing approximately 140,000 tons annually as of the early 2020s.

China: Supply Chain Dominator

China has established itself as a critical player in the lithium supply chain, not only through its domestic production but also by refining a significant portion of the world’s lithium. While China ranks third in raw lithium production, it processes over 60% of the world’s lithium into battery-grade materials.

Chinese companies have secured lithium supply through strategic investments:

Ganfeng Lithium: Partnerships with Australian and Argentine producers
Tianqi Lithium: Major stakes in Chile’s SQM and Australia’s Greenbushes
CATL and BYD: Vertical integration from mining to battery manufacturing

The Lithium Triangle: South America’s Strategic Advantage

Chile, Argentina, and Bolivia—together referred to as the “Lithium Triangle”—hold more than 75 percent of the world’s supply beneath their salt flats. This geographic concentration creates both opportunities and vulnerabilities for the global lithium supply chain.

Argentina: Emerging Production Hub

Argentina hosts numerous lithium brine projects across its Puna plateau, with annual production reaching 33,000 tons per year in the early 2020s. Key developments include:

Olaroz Lithium Facility: Joint venture between Orocobre and Toyota Tsusho
Cauchari-Olaroz Project: Lithium Americas and Ganfeng Lithium partnership
Sal de Vida Project: Galaxy Resources (now Allkem) development

Argentina’s competitive advantages: • Lower production costs compared to hard-rock mining • Favorable mining regulations and foreign investment policies • Access to skilled workforce from established mining sector

Bolivia: The Sleeping Giant

Bolivia produced just 600 tons per year in the early 2020s despite holding substantial reserves. The Salar de Uyuni, the world’s largest salt flat, contains an estimated 21 million tons of lithium resources.

Bolivia faces significant challenges:

Political instability: Frequent government changes disrupt long-term planning
Infrastructure deficits: Remote locations lack adequate roads and power supply
Resource nationalism: Government preference for state-controlled development

Emerging Players and Dark Horses

United States: Securing Domestic Supply

There is only one lithium mine in the United States, located in Nevada, reportedly producing 5,000 tonnes of lithium per year. However, the U.S. government has prioritized domestic lithium production through the Infrastructure Investment and Jobs Act and Inflation Reduction Act.

Promising U.S. lithium developments:

Thacker Pass: Lithium Americas’ planned Nevada operation could produce 40,000 tons annually by 2026
Salton Sea: Controlled Thermal Resources and Berkshire Hathaway Energy projects targeting geothermal brine extraction
Kings Mountain: Albemarle’s North Carolina hard-rock project restart

European Union: Reducing Import Dependence

Portugal leads European lithium reserves with 60,000 metric tons, while Germany and Czech Republic hold additional resources. The EU’s Critical Raw Materials Act aims to source 40% of lithium domestically by 2030.

European lithium initiatives:

Portuguese hard-rock projects: Savannah Resources’ Mina do Barroso
German geothermal extraction: Vulcan Energy Resources’ Upper Rhine Valley projects
Finnish spodumene development: Keliber’s Keskusta project

Market Dynamics and Investment Flows

The lithium mining market will grow from USD 4.2 billion in 2025 to USD 8.5 billion by 2035, driven by rising demand for lithium in EVs and energy storage. This doubling of market value attracts diverse investor categories:

Traditional Mining Companies

Rio Tinto: Acquired Rincon lithium project in Argentina
BHP: Partnership with Chile’s SQM and exploration in Australia
Glencore: Investments in Argentine lithium developments

Technology Giants

Tesla: Direct investments in lithium mining and processing
Ford: Supply agreements with multiple lithium producers
BMW Group: Partnerships ensuring sustainable lithium sourcing

Government Sovereign Funds

Chinese state-owned enterprises: Strategic overseas acquisitions
U.S. Development Finance Corporation: Support for domestic projects
European Investment Bank: Funding for critical materials projects

Technical and Environmental Challenges

**Aerial view of lithium mining ponds.** Adobe.

Extraction Method Trade-offs

Hard-rock mining benefits: • Faster production timelines (6-18 months vs. 12-24 months) • Predictable output volumes • Independence from weather patterns

Brine extraction advantages: • Lower energy requirements per ton of lithium • Reduced solid waste generation • Utilization of natural solar evaporation

Water Usage Concerns

Lithium extraction faces increasing scrutiny over water consumption, particularly in arid regions. Brine operations in Chile’s Atacama Desert use approximately 500,000 gallons of water per ton of lithium produced, raising concerns about impacts on local communities and flamingo populations.

Companies respond through:

Direct lithium extraction (DLE) technologies: Reducing water usage by 90%
Recycling initiatives: Closed-loop water systems in processing facilities
Community engagement: Revenue-sharing agreements with indigenous groups

Geopolitical Risks and Supply Chain Vulnerabilities

China’s dominance across lithium processing creates potential for geopolitical leverage, with projections indicating demand exceeding three million metric tons by 2030. 85% of processing concentrates in China, Argentina, and Chile, creating substantial geopolitical risks for consuming nations.

Resource Nationalism Trends

Rising government intervention and resource nationalism threaten supply chains as nations seek to secure strategic materials. Recent examples include:

Mexico’s lithium nationalization: Constitutional amendment granting state control over lithium deposits
Chile’s proposed state monopoly: Congressional debates over government ownership of lithium operations
Indonesia’s export restrictions: Bans on raw nickel exports to encourage domestic processing

Supply Chain Disruption Risks

Global lithium networks face targeted risks including trade restrictions, economic sanctions, and resource nationalism alongside incidental risks like natural disasters and financial failures. The COVID-19 pandemic demonstrated supply chain fragility, with production delays affecting global lithium carbonate prices.

Major vulnerability points include: • Chokepoint dependencies: Single-source suppliers for critical processing steps • Infrastructure limitations: Port capacity and transportation bottlenecks • Regulatory changes: Environmental permits and community opposition

The Recycling Revolution: Circular Economy Solutions

The global lithium-ion battery recycling market reached USD 23.14 billion in 2024 and projects growth to USD 88.68 billion by 2033, representing a critical component of future lithium supply strategies.

Economic Incentives Drive Recovery

Battery recycling generates net profits of US$58 billion in optimal scenarios while requiring minimum 84% collection rates to stabilize supply by 2060. Economic drivers include:

Material recovery rates: Advanced recycling recovers 95% of lithium, cobalt, and nickel
Cost advantages: Recycled lithium costs 50-70% less than newly mined material
Reduced environmental impact: 75% lower carbon footprint compared to primary production

Technology Breakthroughs Enable Scale

Direct recycling technologies preserve battery material structure, enabling multiple reuse cycles without performance degradation. Key innovations include:

• Hydrometallurgical processes: Solvent-based extraction achieving 98% recovery rates • Pyrometallurgical methods: High-temperature processing for mixed battery waste • Direct recycling: Cathode material restoration maintaining original chemistry

Regional Recycling Hubs Emerge

Asia Pacific dominates recycling with 78.37% market share in 2024, while North America and Europe develop domestic capacity. Major facilities include:

Redwood Materials (Nevada): 100 GWh annual processing capacity by 2025
Li-Cycle (Ontario): Spoke-and-hub network across North America
Umicore (Belgium): Integrated recycling and cathode material production

Future Winners: Key Success Factors

Scale and Cost Efficiency

Winning lithium producers will achieve economies of scale through: • Integrated operations: From mining through battery-grade processing • Technology adoption: Advanced DLE and processing techniques reducing water use by 90% • Strategic partnerships: Long-term supply agreements with battery manufacturers • Automation implementation: Reducing labor costs by 30-40% through autonomous mining

Geographic Diversification

Supply chain resilience requires diversified sourcing across multiple continents and extraction methods. Countries and companies that develop domestic capabilities while maintaining international partnerships will minimize geopolitical risks through:

• Multi-region production: Operations spanning at least three continents • Extraction method diversity: Combining hard-rock mining with brine and recycling • Political risk management: Joint ventures with local partners and government entities

Sustainability Leadership

Environmental and social governance (ESG) criteria increasingly influence lithium purchasing decisions. Producers implementing sustainable practices gain preferential access to Western markets and ESG-focused investment capital through:

• Carbon neutrality commitments: Renewable energy adoption in extraction processes • Water conservation: DLE technologies reducing consumption by 90% • Community partnerships: Revenue-sharing agreements with indigenous groups • Supply chain transparency: Full traceability from mine to battery manufacturer

The Verdict: A Multi-Polar Lithium World

No single country will dominate the global lithium race completely. Australia will maintain production leadership through continued hard-rock mining expansion. Chile’s massive reserves ensure long-term significance, while China’s processing dominance provides supply chain control. The United States and European Union will develop sufficient domestic capacity for strategic security, but not complete independence.

The demand for lithium is expected to reach 1.5 million tonnes of lithium carbonate equivalent by 2025 and over 3 million tonnes by 2030. Meeting this unprecedented demand requires cooperation rather than competition. The lithium race winners will be nations and companies that balance production capacity, supply chain resilience, sustainable practices, and strategic partnerships.

The electric vehicle revolution hangs in the balance. Success in the lithium race will determine which countries power the clean energy transition—and which get left behind in the dust of the Atacama Desert.