With the transition to a low carbon world, lithium demand is increasing as this metal is a key component in battery electric vehicles, and in industrial battery storage for solar and wind power.

However, this metal has a complex extraction process and is concentrated in specific parts of the world: South America, Asia and Australia. Lithium supply could thus be subject to geopolitical tensions.

The lithium price has been very volatile and is currently close to historic lows. This has led several mines to close, temporarily decreasing supply. However, with (a) growing demand for higher-capacity phone batteries, (b) additional energy storage needs for solar and wind power and (c) increased penetration of hybrid and battery electric vehicles, demand should continue to grow, triggering a lithium price recovery.