Producers of processed lithium – an essential element for batteries used in electric cars – are agreeing long-term contracts with their customers to fund the investments needed to address a looming shortfall.
Demand for battery-grade lithium compounds is expected to skyrocket in the next decades in tandem with soaring demand for electric cars as governments and individual consumers try to reduce their carbon footprint.
Although there’s plenty of lithium around, the problem is ensuring there is enough capacity to process it.
Battery makers and other end-users such as car manufacturers will need to sign multi-year deals that encourage large producers to invest more, and faster, industry sources say.
Some of that is already happening.