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Australia—Higher lithium exports supported by strong mine output
A dramatic rise in lithium prices in 2022 was reversed in 2023 as electric vehicle (EV) sales growth slowed and additional production came online. While the current oversupply in lithium markets is expected to diminish over the next five years, prices are forecast to recover only modestly. Still, Australia’s lithium exports are forecast to increase in real terms from $5.2 billion in FY2025 to $8.2 billion in FY2030 (3% of total resources and energy exports), driven mostly by higher volumes. Indeed, Australia accounted for 36% of lithium extraction in 2024 and is expected to remain a leading lithium supplier, despite North America and Africa increasing market share, and strong competition from China. Strong Australian exploration expenditure—up from US$1.4 million in 2015 to US$298 million in 2024 (27% of the global total)—supports the outlook.
Energy transition is expected to support 13% annual growth in global lithium demand (Chart), with the predominant application being EVs and battery energy storage systems. Global EV sales rose by 26% to more than 17 million in 2024, driven by rising adoption rates in China. More moderate EV sales growth is expected to continue through to 2030. Despite US demand growth being revised down, increasing adoption in the EU and China is supported by emission performance standards, and price competitiveness alongside a continuation of trade-in incentives, respectively. However, supply also remains strong, with lithium extraction forecast to grow by almost 10% annually until 2030.
Risks to EV uptake include uncertainty about future trade and industrial policies, lower oil prices, and a subdued economic outlook. Further, China accounted for about two-thirds of global refined lithium supply and 95% of Australia’s lithium exports in 2024. However, policy support to diversify lithium refining and EV manufacturing in Europe and the US will help reduce market concentration risk.
