What is lithium? Lithium (Li) is the lightest metal on Earth and the critical mineral driving the global shift to electrified transport and grid-scale energy storage. With atomic number 3 and a density of just 0.534 g/cm³ — light enough to float on water — lithium’s combination of low weight, high reactivity, and exceptional electrochemical properties makes it irreplaceable in rechargeable battery technology. Batteries now consume more than three-quarters of global lithium production.
What Is Lithium? Properties and Characteristics
Lithium is a soft, silvery-white alkali metal that reacts violently with water and corrodes rapidly in air. In its pure form it must be stored in inert liquids or sealed environments. Its melting point of 180.5°C is the highest of any alkali metal, and it carries the highest mass-specific heat capacity of any solid element — a property that makes it useful in industrial coolant systems as well as batteries.
Two stable isotopes occur naturally: lithium-6 (4.85% natural abundance) and lithium-7 (95.15%). Lithium-7 is used in pressurised water nuclear reactors to counteract the corrosive effects of boric acid. Lithium-6 has strategic value in thermonuclear applications and is subject to tight export controls.
Lithium does not occur in elemental form in nature. It is extracted primarily from two source types: hard-rock spodumene pegmatites (dominant in Australia) and subsurface lithium-rich brines (dominant in Chile and Argentina). Global identified reserves are estimated at approximately 28 million tonnes by the USGS, with the Lithium Triangle of Chile, Argentina, and Bolivia holding the largest concentration of brine resources.
What Is Lithium Used For?
Battery applications dominate, accounting for over 75% of global lithium consumption as of 2024. Lithium-ion batteries power electric vehicles, consumer electronics, and stationary grid storage systems. A lithium-ion cell generates approximately 3 volts — roughly double the output of a lead-acid cell — while offering superior energy density and cycle life. Lithium carbonate and lithium hydroxide are the two primary battery-grade chemical inputs, with lithium hydroxide increasingly preferred for high-nickel cathode chemistries used in long-range EVs.
Beyond batteries, lithium has established industrial applications across several sectors. Heat-resistant ceramics and specialist glass — including cookware, telescope lenses, and smartphone screens — use lithium oxide as a flux to reduce melting temperatures and improve thermal stability. This is the second-largest end-use globally. Lithium greases, derived from lithium stearate, are used in high-temperature industrial and aerospace lubrication. Lithium fluoride serves as an additive in aluminium smelting, reducing energy consumption in the Hall-Héroult process.
Lithium also has a well-established role in psychiatry. Lithium carbonate and lithium citrate are prescribed as mood stabilisers for bipolar disorder, severe depression, and related conditions. Therapeutic monitoring via blood tests is mandatory because the margin between effective and toxic blood concentrations is narrow.
Where Is Lithium Produced?
Australia is the world’s largest lithium producer by volume, supplying approximately 91,700 tonnes in 2023 according to USGS data, principally from the Greenbushes spodumene pegmatite in Western Australia — the largest and highest-grade hard-rock lithium deposit in operation, with ore grades around 2.4% Li₂O. The Greenbushes mine is majority-owned by Tianqi Lithium and Albemarle Corporation, two of the sector’s largest processors.
Chile is the second-largest producer (41,400 tonnes, 2023) and holds the world’s largest confirmed reserves at 9.3 million tonnes. Production centres on the Salar de Atacama, where lithium-rich brine is concentrated through solar evaporation before chemical processing into battery-grade carbonate and hydroxide. SQM and Albemarle are the principal operators.
China produced 35,700 tonnes in 2023 and is the world’s dominant processor of lithium chemicals regardless of where the raw material is mined. Chinese refineries handle the majority of Australian spodumene concentrate, converting it to battery-grade product before sale to cell manufacturers. Argentina, Zimbabwe, Brazil, and Canada are significant and growing producers. The South American Lithium Triangle — Chile, Bolivia, and Argentina — is estimated to contain more than 50% of global lithium resources.
Lithium Price and Market
Lithium prices are among the most volatile in the critical minerals complex. Battery-grade lithium carbonate peaked above $80,000/tonne in late 2022 before a severe market correction drove prices below $10,000/tonne by 2024, as new supply from Australian spodumene operations outpaced demand growth. The lithium price is tracked against Fastmarkets and SMM benchmarks for carbonate and hydroxide grades; no single exchange equivalent to the LME exists for lithium.
Price volatility reflects the structural imbalance between mine development timelines (5–10 years from discovery to production) and the rapid scaling of EV manufacturing. Analysts at Benchmark Mineral Intelligence project that long-run demand from battery manufacturing will require significant new capacity — particularly lithium hydroxide — to come online this decade to avoid supply deficits.
Lithium Supply Chain Risks
Lithium mining concentration is only one dimension of supply risk. The more critical bottleneck is chemical processing. China controls approximately 60–70% of global lithium hydroxide and carbonate refining capacity, meaning that even lithium mined in Australia, Chile, or Africa typically passes through Chinese processing before reaching battery manufacturers in South Korea, Japan, or the US.
Western governments are investing to reduce this dependency. The US Inflation Reduction Act and EU Critical Raw Materials Act both include provisions targeting domestic or allied-nation lithium processing. Direct Lithium Extraction (DLE) technology, which extracts lithium from brines without conventional evaporation ponds, is attracting significant investment as a means of accelerating supply development in the US and Europe. For a broader overview of how China’s position affects the minerals complex, see China’s critical minerals export controls and what they mean for buyers.
Environmental and social licence risk is an additional constraint. Lithium brine extraction is water-intensive in arid regions where indigenous communities have prior rights to water resources. Hard-rock mining carries standard land disturbance and tailings management requirements. Both factors are influencing project approval timelines and operating costs across the Lithium Triangle.
This article is for informational purposes only and does not constitute investment advice. Prices are subject to change without notice.
What is lithium?
Lithium (symbol Li, atomic number 3) is the lightest metal on Earth and a critical mineral used primarily in rechargeable batteries for electric vehicles and consumer electronics. It is also used in ceramics, industrial lubricants, and as a mood-stabilising medication in psychiatry.
What is lithium used for in batteries?
Lithium-ion batteries use lithium carbonate or lithium hydroxide as key chemical inputs. The lithium ion moves between the anode and cathode during charge and discharge cycles, storing and releasing energy. These batteries power electric vehicles, smartphones, laptops, and grid-scale storage systems due to their high energy density and long cycle life.
Where is lithium mined?
Australia is the largest producer by volume, primarily from the Greenbushes spodumene mine in Western Australia. Chile is the second-largest producer, extracting lithium from brine in the Salar de Atacama. Argentina, China, Zimbabwe, and Brazil are also significant producers. The so-called Lithium Triangle of Chile, Argentina, and Bolivia holds the largest concentration of global lithium resources.
What is the current lithium price?
Lithium prices are highly volatile. Battery-grade lithium carbonate peaked above $80,000/tonne in late 2022 before falling sharply to below $10,000/tonne by 2024 as new supply outpaced demand. Current prices are tracked on CMN’s lithium price page using Fastmarkets and SMM benchmarks.
Why is lithium classified as a critical mineral?
Lithium is classified as critical because it is essential to electric vehicle batteries and the energy transition, has no commercially viable substitute at scale, and its supply chain is geographically concentrated. Australia dominates mining; China dominates processing. This concentration creates strategic risk for countries dependent on imported lithium chemicals.
How does China control the lithium supply chain?
While China is a significant producer, its dominant position is in chemical processing. Approximately 60–70% of global lithium hydroxide and carbonate refining capacity is located in China. Australian spodumene concentrate is typically shipped to China for processing before onward sale to battery manufacturers in South Korea, Japan, or the US.
How often is this lithium information updated?
CMN’s What Is Lithium page is reviewed periodically. For current lithium price data, visit the lithium price page, which is updated on the first of each month using Fastmarkets and SMM benchmark data.
