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Albemarle, one of the world’s largest producers of battery chemical, lithium, raised its forecast for demand by the end of the decade due to faster uptake of electric vehicles.
The company said it now expects lithium demand to grow by 30,000 tonnes a year through 2021, from a prior forecast of 20,000 tonnes.
The company said while there is continuous innovation in battery design it doesn’t see any “disruptive non-lithium energy storage technologies on the horizon.”
Last year around 190,000 tonnes of lithium was consumed, a growth of between 15,000 to 20,000 tonnes from a year earlier, Albemarle said.
Extracted in South America and Australia lithium has been one of the key raw material beneficiaries of the growth in demand for batteries from consumer electronics and electric vehicles.
While lithium production rose by 14 per cent last year that was not enough to satisfy demand causing prices to jump by 74 per cent in December, according to London-based Benchmark Minerals Intelligence.
Lithium-ion batteries in cars contain around 40 to 100 kilograms of lithium, compared to less than 0.1 for consumer electronics, according to the company. Batteries for electricity storage for power grids contain more than 1,000 kilograms, it says, but that market is not expected to take off until after 2021.
Shares in Albermarle have risen 22 per cent year-to-date. The company aims to capture 50 per cent of the market growth in lithium and produce 165,000 tonnes a year of lithium by 2021.