Lithium is a crucial mineral used in batteries for electric vehicles, consumer electronics, and energy storage. As the world transitions to renewable energy and electric transportation, demand for lithium is rapidly increasing. This raises an important question – does the United States have substantial domestic lithium resources to meet this demand? Or will the US need to rely on importing lithium from other countries?
Quick overview of lithium supply and demand
Global lithium demand is projected to grow from about 332,000 metric tons in 2020 to over 1 million metric tons by 2025, an increase of over 200%. This is driven by surging sales of electric vehicles, which use lithium-ion batteries. Each EV uses about 5,000 times more lithium than a smartphone.
Currently, Australia produces over 40% of the world’s lithium, followed by Chile, China, and Argentina. The US produces less than 2% of global lithium supply. America imports over 80% of the lithium it uses, mostly from Chile and Argentina.
So while lithium demand is skyrocketing, the US lacks substantial domestic production. This dependency on imported lithium poses a major supply chain risk as global competition for limited lithium reserves increases.
Estimates of US lithium reserves
The United States Geological Survey (USGS) estimates that the US has about 6.8 million tons of lithium reserves. Chile has an estimated 9.2 million tons of reserves, while Australia has about 18.7 million tons.
So at currently known reserves, the US holds far less lithium than the world’s top producers Australia and Chile. America’s lithium reserves are estimated to meet under 2 years of projected demand by 2025.
In comparison, Australia’s reserves could meet over 20 years of lithium demand. Overall, the US holds about 1% of total global lithium reserves.
US lithium resources
While US lithium reserves are limited, estimates of undiscovered lithium resources are more optimistic for domestic supply.
The USGS assesses the US has over 80 million tons of identified lithium resources. About 37% of these resources are in Nevada, 18% in North Carolina, 9% in California, and 5% in Arkansas.
Nevada’s Clayton Valley holds the US’ only currently active lithium mine, Albemarle’s Silver Peak. This mine produces about 6,000 tons of lithium annually, just 2% of current global production.
Several companies are exploring new lithium deposits and mines in the US to boost domestic output. But it takes about 7-10 years to develop a new lithium mine from discovery through permitting and construction.
So while the US has substantial lithium resources, it will take time to bring significant new domestic production online. Import reliance will continue unless new reserves are rapidly discovered and developed.
US lithium production outlook
The US government is pushing policies to boost domestic lithium production and processing to secure supply chains for clean energy technology.
The 2022 Inflation Reduction Act contained $4.5 billion in grants for strategic minerals including lithium. This could incentivize new lithium projects and reduce permitting times. Few new US mines have opened in recent decades due to stringent permitting.
Some analysts estimate that proposed new projects in the US could produce over 100,000 tons of lithium annually by 2030. While significant, this would meet only about 10% of projected US lithium demand in that timeframe.
Companies like Lithium Americas are developing large lithium clay projects in Nevada that could come online within 5 years. Piedmont Lithium aims to build an integrated lithium hydroxide plant in North Carolina by 2023. But most projects face technical challenges ramping up production.
The Biden Administration has also invoked the Defense Production Act to spur investment in domestic lithium production and processing. $750 million from the Infrastructure Act will develop advanced and recycled battery materials.
Overall the US will still depend heavily on imported lithium in the coming decades. But government initiatives and rising prices could unlock more domestic resources if projects can overcome economic and technical hurdles.
Key takeaways
– Global lithium demand is projected to grow over 5 times larger by 2025, driven by electric vehicle adoption.
– The US currently produces less than 2% of global lithium but uses over 25% of the world’s supply. America imports over 80% of the lithium it consumes.
– Chile, Australia, and China dominate world lithium production. The US has estimated reserves of just 6.8 million tons of lithium, while Chile has 9.2 million tons of reserves.
– The US likely has substantial undiscovered lithium resources and deposits, potentially over 80 million tons. But new mines could take a decade to develop.
– Proposed new lithium projects and investments could boost US production to over 100,000 tons by 2030. But this would still meet under 10% of projected US demand as imports climb.
– Securing more domestic lithium will be critical for America’s energy independence and climate change goals. But the US will still rely heavily on imported lithium for the foreseeable future.
US lithium reserves by state
Here are estimates of lithium reserves in the top 5 US states:
| State | Lithium reserves (tons) |
|---|---|
| Nevada | 3,500,000 |
| North Carolina | 1,500,000 |
| California | 820,000 |
| Arkansas | 540,000 |
| Colorado | 230,000 |
Nevada holds over 50% of US lithium reserves at 3.5 million tons. North Carolina and California have the next largest reserves at 1.5 million tons and 820,000 tons respectively.
Nevada’s reserves are concentrated around Clayton Valley and the Silver Peak mine. North Carolina’s known lithium is in the Kings Mountain area. California’s reserves include the Salton Sea geothermal brines.
While these 5 states hold most identified reserves, other areas like Maine and Wyoming have potential for undiscovered lithium resources. As prices rise, more domestic resources could become economical to extract.
Global lithium reserves
On a global scale, here are total estimated lithium reserves for the top 5 countries:
| Country | Lithium reserves (tons) |
|---|---|
| Australia | 18,700,000 |
| Chile | 9,200,000 |
| China | 4,500,000 |
| Argentina | 2,000,000 |
| United States | 680,000 |
Australia holds the world’s largest reserves at nearly 19 million tons, while Chile has 9.2 million tons. China and Argentina have the next largest global reserves.
The United States ranks 5th with about 680,000 tons or 1% of global reserves. Australia holds over 27% of total world reserves while Chile has 13%.
Bolivia likely has large untapped lithium resources, while Afghanistan and the Democratic Republic of Congo also have substantial potential reserves. As demand increases, more nations could ramp up production.
But Australia and Chile will likely remain the dominant lithium suppliers over at least the next decade. Securing supply chains with these major producers will be key to global energy transitions.
US domestic lithium production challenges
While the US has meaningful lithium resources, there are several barriers to unlocking substantial domestic reserves and production capacity:
– Permitting difficulties – Opening new mines in the US often faces legal suits and a long permitting process. Few have been approved in recent decades compared to Australia and Chile.
– Environmental regulations – Projects need to adhere to state and federal environmental rules on water use, endangered species, waste products, air quality, and more. Laws are tighter than top producing countries.
– Unproven extraction methods – US lithium resources often rely on untested direct lithium extraction technologies versus conventional evaporation ponds used abroad. Extraction takes years to commercialize and scale up.
– Cost competitiveness – Labor, permitting, and mining costs are higher in the US compared to South America. Battery-quality lithium must be cost competitive on global markets.
– Resource quality – Much US lithium is lower concentration versus world-class brines in Chile and Australia with lithium concentrations up to 10 times higher.
– Timeline – Even if approved, complex new lithium projects take over 7 years to reach full commercial production. Supply would ramp up slowly.
These constraints make it uncertain if US lithium production could expand rapidly enough to meet surging domestic demand in coming decades. But rising prices and government support could improve the outlook.
US lithium imports dependence risk
Relying on imports for over 80% of its lithium supply poses strategic risks for the United States:
– Supply chain disruption – Geopolitics or instability in key producing countries like Chile, Argentina, or Australia could cut off lithium exports to the US. As demand rises, potential for supply chain shocks increases.
– Price spikes – Lithium prices have already spiked over 500% recently. Limited global reserves could mean sustained higher prices that hinder US EV and battery production. Australia and Chile benefit from high lithium prices.
– Rival control of supplies – China has been investing heavily in South American lithium mines and reserves. Chinese firms could potentially influence global lithium supply and prices.
– National security risk – Widespread EV adoption is crucial for US emissions goals and reducing oil dependence. Lack of lithium could throttle clean energy deployment and create reliance on adversaries.
– Loss of industry and jobs – With inadequate lithium supply chains, the US risks losing battery and EV manufacturing to Asia and Europe. This represents a loss of economic growth and high-wage employment.
– Climate goals hindered – Insufficient and costly lithium would slow EV adoption and renewable energy storage, undermining efforts to cut US greenhouse gas emissions.
Therefore it is a strategic priority for the US to develop a stable domestic lithium supply chain and reduce susceptibility to potential foreign supply disruptions.
Can recycling help US lithium supplies?
Lithium-ion battery recycling is often proposed as a solution to increase US lithium supply. But recycling faces challenges to significantly boost available lithium in the near term:
– Low collection rates – Currently only about 5-10% of lithium-ion batteries are ultimately collected for recycling. More infrastructure is needed to collect used EV and electronics batteries.
– Losses during recycling – On average about 20% of lithium is lost during battery recycling processes. So recycling is not as efficient as mining new reserves.
– Time lag – It will take until about 2030 for large volumes of end-of-life EV batteries to become available to recycle. Recycling cannot meet rapidly scaling demand soon.
– Impure production – Recycled lithium often contains impurities from multiple old battery types. The metal may require extra purification before it can be remanufactured into new batteries.
– Cost – Processes to recover battery materials like lithium are often not yet profitable without subsidies. Recycling costs would need to fall substantially.
So while critical to develop, lithium recycling is unlikely to displace the need for new mines this decade. In the future, recycling could provide perhaps 30% of total lithium supply as more EV batteries reach end of life. But new reserves must still be tapped.
US lithium outlook
In summary, the surging electric vehicle transition and energy storage revolution will require lithium supplies to expand enormously. While the United States has meaningful lithium resources, developing these into proven reserves and production capacity could take over a decade. America will remain heavily dependent on lithium imports through at least 2030.
Unlocking US lithium production more quickly would require expediting permitting for new projects, investing in extraction technologies tailored for domestic resources, and reducing costs through innovation and scale. Government initiatives can help support domestic supply chains. But environmental impacts must also be managed.
Lithium recycling will also gradually come online to supplement virgin lithium production. But recycling cannot meet near term demand growth.
For economic, security, and climate reasons, increasing US lithium output should be a top priority. But realistically the world will require diverse global lithium supplies through mid-century and beyond. The renewable energy transition cannot succeed without more abundant lithium.
Conclusion
Global lithium demand is expected to expand exponentially in the coming decades as electric vehicle adoption accelerates. But lithium reserves and production are currently highly concentrated in a handful of countries like Australia, Chile, and China.
The United States is projected to depend on imports for over 80% of its lithium, posing risks to economic and national security. America has substantial but undeveloped lithium resources that could support a larger domestic supply chain.
But considerable obstacles around permitting, technology, and cost must be overcome to unlock US lithium production that can compete with South American and Australian supply. While critical to advance, recycling also cannot meet surging near term lithium needs.
For the renewable energy future, the world requires much greater lithium supplies from diverse global sources. While additional domestic production can reduce US strategic risks, America will remain reliant on imported lithium for the foreseeable future. Global partnerships will be essential to ensure adequate lithium for energy security and climate goals.