The global lithium market is undergoing a liquid period. After years of solid growth, demand for electric vehicles (EVs) has slowed down and prices have plummeted since their peak in 2022 amid oversupply from global producers. Overall, lithium hydroxide costs fell by about three-quarters between 2023 and 2024, and continue to fall in 2025.
Australia, the world’s largest producer of lithium ore (compared to 46% of global total in 2024), felt this decline more clearly than most, suspending some mining operations amid worsening market conditions.
However, there may be rebounds on the horizon. Analysts are hoping to make a comeback in 2025, spurring new growth in EV adoption and clean energy storage. Lithium prices remain difficult to predict, but Australian miners are once again making big bets on metals.
With its abundant active lithium mines and reserves, Australia is well positioned to be at the forefront of this lithium opportunity. However, as demand grew, questions have been raised about how this burgeoning market will remain sustainable and how waste flow can be safely managed.
Strengthening domestic recycling capabilities, developing more environmentally friendly processing methods, and creating closed-loop supply chains could be key to ensuring that growth in lithium production does not come at the expense of the environment.
By 2040, the International Energy Agency (IEA) I look forward to it There is a demand for the world to achieve its Paris Agreement goals by over 40 times the current level of lithium. Therefore, despite current market volatility, optimism about the future of lithium remains strong.
In this context, Australia is setting itself up to be a leading global supplier.
In 2024, the federal government extended a $230 million ($149.81 million) loan to Liontown Resources, which began production at the Kathleen Valley mine last July. The mine is expected to produce approximately 500,000 tonnes (T) of spodumene concentrates each year. Spodumene is the main source of lithium in Australia.
Meanwhile, Perth-based Pilbara Minerals plans to increase lithium ore production at Pilgangoora by 50% over the next year through the P1000 project.
Importantly, there is an increasing number of interest in building not only the extraction side of the lithium supply chain, but also refineries. In Western Australia, for example, shared lithium is building its own lithium refinery, while Albemarle operates another refinery in the area.
The motivation behind the shift in focus comes from efforts to diversify key mineral supply chains and move away from China’s continued control. According to the IEA, China currently accounts for 70% of the world’s lithium purification.
“We currently do the mining and integration aspects of lithium-ion (LI-ION) batteries in Australia very well,” said Neeraj Sharma, professor of chemistry at the University of New South Wales and founder of the Australian Battery Association. “Our grids are years away when it comes to battery storage. What needs to grow is the central part of the supply chain, the processing and cell manufacturing aspects.”
Similarly, Serkan Saydam, chairman of Mining Engineering at UNSW Sydney, believes that the main gap in Australia’s lithium supply chain lies in the processing and purification elements.
“Australia is excellent at lithium extraction, but it currently lacks sufficient domestic processing and purification capabilities, leading to reliance on overseas facilities,” says Sadam.
In fact, between 2022 and 23, Australia exported 98% of the Spodumene concentrate in this way for processing.
Both Sharma and Saydam have identified the development of lithium processing capacity, which is needed not only for national security and economic growth in Australia, but also for sustainable industrial development.
Saydam said the development of low-emission processing infrastructure is “important not only for economic benefits but also for minimizing environmental impact through stricter regulatory oversight.”
Sharma believes building this part of the supply chain will also help establish a more robust battery recycling industry in Australia.
“If you know what’s in your batteries from a processing perspective, you’d better know how to recycle them at the end of your life,” he says. Mining Technology. “We have a lot of interest from the mining and startup sectors to move towards this, but it is currently difficult to create the necessary recycling processes within the country without proper electrode treatment and domestic improvements.”
According to the Commonwealth Scientific and Industrial Research Organization, there is currently only about 10% of Li-ion battery waste recycled in Australia. However, Sharma predicts that recycling rates will also increase as large-scale battery demand increases.
“I think the recycling rate for things like EV batteries is nearly 100%,” he says. “Because of the nature of the fact that these batteries are big, people don’t want them to wander around.”
The difficulty lies in the fact that scalability and battery chemistry are still evolving, he says.
“We don’t have enough Li-Inion batteries to recycle efficiently right now,” Sharma says. Battery chemistry is constantly evolving, so recyclers collect batteries that are “a mix of so many different chemicals.”
However, some battery chemistry has emerged as dominant, and Sharma suggests that over the next few years there will be a flow of “more homogenous” battery waste that is easier to organize and recycle.
“If you increase the number of batteries available for recycling (once) there’s a scale that will make it more effective,” he adds. “Once you start standardizing your battery chemicals, you can start thinking about really minimizing your recycling procedure.”
There are some advances. With historical precedents, the lead-acid battery industry offers models that Australia can learn from.
January 2022, Battery Stewardship Council It was introduced The taxation scheme, which collaborated with the manufacturer, increased the recovery rate of small batteries from under 8% to over 16% within six months. The Australian government has recently announced National Battery StrategyLay out how to support the domestic battery industry as it grows.
As Australia works to close the loop, it is important to embed sustainability throughout the supply chain. The tighter environmental, social and governance standards will bring close attention to both shareholders and consumers.
Saydam warns that Australian mines need to integrate more sustainable practices into operations to not only meet future lithium demand, but also become “key players” in the global transition to a low-carbon economy.
“Investing in innovation, such as direct lithium extraction and low-carbon refining technologies, is essential to reducing the environmental footprint and supporting the circular economy,” says Sadam. “Industry needs to navigate the volatility of global markets and defend clear national policies that support sustainable growth.
“Transforming these challenges together is key to enabling Australia to expand its lithium production in a responsible, globally competitive way,” he adds.
Australia has already begun developing local refining capabilities and domestic battery recycling initiatives. Still, there are important hurdles remaining to meet the rapidly rising global demand. According to Saydam, optimizing lithium extraction and processing requires a coordinated blend of legislative reforms, technological advances and strategic investments.
“We need to strengthen our legislative frameworks and encourage sustainable and efficient practices,” he says. “This includes creating clear and stable policies that encourage domestic value-added activities such as purification and battery material production, rather than just exporting raw materials.
“Regulations need to implement strict environmental standards to ensure water use, waste management and emissions are managed responsibly, but they need to quickly track approvals for sustainable technology deployment,” continues Saydam.
Strengthening community and indigenous engagement, investing in high-class workforce skills, and encouraging cooperation between academia, industry and government was also highlighted as keys to long-term success.
Saydam concludes: “Essentially, the long-term success of Australia’s lithium industry relies on a holistic approach to integrating sustainability, innovation and strategic positioning in the global value chain.”
“Australia’s Lithium: The Future of the “White Gold” Rush” was originally created and published Mining Technologya brand owned by GlobalData.
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