Lithium Supply Gap Exceeds $100 Billion, Albemarle Gains Domestic Edge

Benchmark Mineral Intelligence forecasts that global lithium demand will more than triple to nearly 7 million tons of lithium carbonate equivalent by 2050. Supplying that demand would require 134 additional mines, with annual production of about 36,000 tons each. The necessary investment would exceed $100 billion. Mining.com quoted Benchmark lithium product director Cameron Perks as saying the main challenge is maintaining investment through price cycles while competing for capital with AI, defense and the broader energy transition.

Lithium prices are rebounding after a slump lasting two years. Investors are beginning to distinguish projects that generate cash from speculative projects. The case for higher lithium demand no longer rests solely on electric vehicles. Growing battery storage demand and Western efforts to establish domestic supply give established producers such as Albemarle greater leverage.

Benchmark says stationary storage demand has increased by more than 60% annually over the past two years. The U.S. Energy Information Administration says utility-scale battery capacity increased by about 70% annually over the past three years, approaching 52 gigawatts by mid-2026. Operators intend to install another 54 gigawatts through 2028. Benchmark forecasts that electric vehicles will represent 76% of lithium demand in 2050. However, grid batteries can absorb supplies if car sales stagnate, helping keep the lithium market tighter.

Albemarle's results depend more on prices than on volumes. Albemarle's Energy Storage segment increased volumes by 11% in the second quarter. The segment's average realized price climbed 61% to $19.53 per kilogram. The segment's adjusted EBITDA increased 229% to $723 million. Albemarle's 2026 adjusted EBITDA would be between $900 million and $1 billion at a lithium price of about $10 per kilogram. At $20 per kilogram, Albemarle's 2026 adjusted EBITDA would reach $2.4 billion to $2.6 billion.

Competing producers face permitting processes, litigation and substantial spending requirements. Albemarle already operates Nevada's Silver Peak, the only active domestic lithium mine. Albemarle is seeking permits to reopen Kings Mountain in North Carolina. Albemarle says Kings Mountain could provide sufficient material for 50,000 tonnes of conversion capacity. Albemarle also operates low-cost brine assets in Chile's Salar de Atacama and owns hard-rock assets in Australia. That geographic diversification protects Albemarle against regulatory or technological setbacks within any single country.

China accounts for nearly 70% of worldwide lithium refining capacity and about one-quarter of mined supply. China's position has prompted Western governments to provide grants, loans and price support. CRU forecasts that U.S. production will rise from 5,000 tons this year, equivalent to 0.3% of global production, to between 55,000 and 95,000 tons by 2030. However, CRU expects that projected 2030 output to represent only 2% to 4% of worldwide primary supply. CRU analyst Cameron Hughes told The Northern Miner that the United States will never capture much market share from China, given China's dominance across lithium and the battery value chain.

Lithium Americas' Thacker Pass project leads the pipeline of U.S. lithium projects. General Motors, a $2.26 billion Energy Department loan and Yorkville Advisors support Thacker Pass. Steel tariffs and inflation are adding pressure to the project's $2.93 billion capital expenditure budget. Hughes said high capital expenditure will remain a persistent problem in North America.