Lithium is heating up, with the price globally on the rise following higher demand.
The U.S. geological survey (USGS) estimates lithium production last year increased 12% due to a spike in demand for lithium-ion batteries. That demand will likely stay strong as automakers increase their production of electric vehicles. Of note, Tesla Motors intends to rollout 500,000 electric vehicles by the end of 2018. However, the company has a tendency of over promising.
Regardless, lithium producers are ramping up capacity to meet future demand, while other companies are racing to the finish line. This has caused a noticeable uptick in activity in South America’s lithium triangle, which hosts more than half of the world’s lithium reserves.
According to the USGS, output in Argentina alone jumped 60% in 2016, owing to a new brine operation and a leading Argentine producer bulking up its output. A producer in Chile also bumped its output by 20%.
The USGS adds despite available capacity, spot lithium prices last year rose 40% to 60% around the world, excluding China, where prices jumped 300% partly due to a temporary shortage of imported spodumene from Australia.
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