Supply Chain

Lithium Supply Chain: From Mine to Market

The lithium supply chain has two primary pathways: hard rock (spodumene) mining in Australia and brine extraction in South Americas Lithium Triangle (Chile, Argentina, Bolivia). Australia is the largest miner (~47%), with Greenbushes being the flagship operation, but Australian spodumene concentrate is shipped to China for chemical conversion. China dominates lithium chemical processing (~65% of conversion capacity), converting spodumene and brine feedstock into battery-grade lithium carbonate and hydroxide. Chile produces lithium carbonate directly from brine evaporation at the Salar de Atacama. New supply sources emerging include DLE technology (faster than evaporation), clay deposits (Thacker Pass, US), and European hard rock projects. The supply chain bottleneck is increasingly in chemical conversion rather than mining, with China controlling the critical step of producing battery-grade lithium chemicals from raw materials.

Production Geography

Global Lithium production is led by Australia, which accounts for approximately 47% of world output, followed by Chile. The full list of major producing nations includes Australia, Chile, China, Argentina, Brazil. This geographic concentration means that disruptions in key producing regions can have outsized impacts on global supply and pricing.

Extraction Methods

Lithium is extracted using the following primary methods:

• Open-pit hard rock mining (spodumene)
• Brine evaporation
• Direct lithium extraction (DLE)
• Clay leaching (emerging)

Processing and Intermediate Products

Lithium is primarily sourced from Spodumene (LiAlSi2O6), Brine (Li-rich salar brines), Lepidolite, Hectorite/Jadarite clays. After extraction, the raw material undergoes multiple processing steps including beneficiation, chemical treatment, and refining to reach the purity levels required by downstream industries. Typical ore grades range from 1-2% Li2O (hard rock); 200-1500 ppm (brine).

Key Supply Chain Participants

The Lithium supply chain involves these major companies:

Supply Chain Vulnerabilities

Key vulnerabilities in the Lithium supply chain include concentration of 47% of production in Australia, limited processing capacity diversification, and long lead times for new mining projects. The high supply risk rating reflects the severity of these concentration risks and the difficulty of rapidly establishing alternative supply sources.