Global lithium demand could grow almost fivefold by 2040, exceeding 500,000 tons in terms of pure metal, according to a report issued by the International Energy Agency (IEA). This growth continues to be driven by the spread of battery technologies, primarily in the segment of electric vehicles and energy storage systems. Clean energy technologies account for about 90% of the overall growth in lithium demand, with growth rates becoming even more pronounced in scenarios of accelerated transition from fossil fuels.
Despite the rapid development of lithium mining and processing, forecasts indicate a potential deficit by 2035. In the IEA scenario based on the current level of national climate commitments, the gap between demand and supply could reach 30–40%. In the more ambitious climate scenario of carbon neutrality by 2050, lithium demand rises even faster, making supply chains more vulnerable.
As of 2024, global lithium production totaled about 155,000 tons. The list of major producers continues to include Australia (40% of the global total), Chile (30%) and China (15%). Argentina and Zimbabwe are showing significant growth, with new deposits being actively developed. China dominates the processing stage, accounting for about 75% of the world’s production of lithium chemicals used in batteries and industrial applications.
Investment activity in the lithium sector has increased significantly. In 2024, lithium exploration spending exceeded $1 billion for the first time, with the aggregate investment in new mining projects rising by 50% compared to the previous five-year period. However, the pace of bringing new capacities on stream is constrained by environmental regulations and high capital expenditures.
Against the backdrop of production expansions and slower consumption in some segments, the year 2024 saw a sharp drop in prices: lithium prices plummeted by more than 80% compared to their peak levels in 2022. The biggest production increases were observed in China, Chile and Australia. The price drop was also affected by a noticeable increase in the share of lithium iron phosphate batteries, which are cheaper to produce and do not require the use of cobalt or nickel.
The transition to technologies with a lower cobalt content has reduced the rate of cobalt consumption in the battery industry, although the overall demand for cobalt continues to grow. By 2040, it might increase by one and a half times. In 2024, global cobalt production reached approximately 230,000 tons, of which about 70% was mined in the Democratic Republic of the Congo. China and Finland are the leaders in cobalt processing, with Chinese companies accounting for over 75% of the world’s refined cobalt production. As in the case of lithium, this leads to supply chains being highly dependent on a limited number of suppliers.
The IEA estimates that the combined market value of mining and processing six key minerals – copper, lithium, nickel, cobalt, graphite and rare earth elements – will rise by one and a half times by 2040. At the same time, the geography of production capacity distribution remains unbalanced: Latin America is the leader in terms of production, especially in the copper and lithium segments, while China maintains a dominant position in the processing of all major minerals. It accounts for up to 75% of lithium and cobalt processing, more than 90% of graphite and rare earth element processing, and 44% of copper processing. Moreover, Chinese companies control up to 95% of global production of battery graphite and rare earth magnets.
Investments in the development of the raw materials base are focused on three key regions: in 2020–2024, about $60 billion was invested in projects based in Latin America (mainly in copper and lithium mining), with about $25 billion invested in Indonesian nickel deposits and another $15 billion in African cobalt deposits.
High price volatility in the critical minerals market is covered in a separate section of the IEA report. IEA experts indicate that 75% of these minerals demonstrate greater volatility than oil, with half of them exceeding natural gas in this regard. This instability complicates long-term planning and increases investment risks, especially for battery manufacturers and automakers.
Trade restrictions put an additional burden on the market. More than half of strategically important minerals are already subject to various forms of trade control. For instance, China imposed restrictions on the export of gallium, germanium, antimony, graphite and rare earth elements in late 2023, expanding them to processing technologies in early 2025. In February 2025, the Democratic Republic of the Congo suspended its cobalt exports for four months, causing world prices to spike by 67%. These measures have had a significant impact on other commodity markets: in March 2025, the price of bismuth rose by 90%.
