Global material flows of lithium for the lithium-ion and lithium iron phosphate battery markets

We conducted a material flow analysis (MFA) model for a single year (2018) to understand the global flows of lithium from primary extraction to lithium-ion battery (LIB) use in four key sectors: automotive, energy and industrial use, electronics and other. A specific focus and quantification of lithium use in lithium iron phosphate (LFP) cathodes for LIB batteries is also given. This is to align with the overall focus of the project on LFP cathode materials and to assist in decision making for the Bolivian stakeholders of this project. The stages included in the model are: extraction, processing, cathode manufacture, other manufacture (non-battery), lithium-ion battery (LIB) manufacture, lithium iron phosphate battery manufacture (LFP) and the end-use sectors of automotive, energy and industrial use, electronics and other. We visualised the model using a Sankey diagram. Some of our key conclusions are summarised below: • The hard rock deposits dominated production of lithium in 2018. This was not the case a few years back, where lithium from brine deposits constituted the primary source. • There are significant losses of lithium to waste both at the extraction but also at the processing stages. This is due to low recovery rates. • The battery compound market did not monopolise the global lithium markets in 2018, but it has been growing fast for several consecutive years. In 2010 the lithium battery market share was estimated to be 31%, in 2018 46%, and in 2021 71% (USGS 2021b). • We have identified an oversupply of lithium compounds used in cathode manufacture in 2018. This finding is in line with several reports mentioned by market analysts suggesting oversupply of lithium in the market in this year (Shabalala 2018, Erkan 2019). • LIB LFPs were the second largest cathode market after NMC cathodes. Their manufacture and use have been taking place almost solely in China. In recent years however LFP cathodes seem to have made a comeback and projections suggest increasing demand for them from the automotive and energy storage sectors. This is an opportunity for countries like Bolivia who are willing to proceed with the commercialisation of LFP batteries. • In 2018 LFP cathodes for the automotive sector was the largest consumer of lithium, with energy storage and industrial uses being the second dominant end-use consumer. • There are data uncertainties associated with all stages of the supply chain. Data are dispersed and not fit-for-purpose, especially for the cathode and LIB manufacturing stages. Considering the global focus on decarbonisation technologies and LIBs, this means that these markets are likely to increase significantly in the short-term. It is therefore essential that material requirements and use are reported accordingly to ensure frictionless supply and proper use of resources at the end of their life. • The lithium market is extremely dynamic with significant changes occurring from one year to the next. There is a need therefore for further enhancement of our current model to a dynamic form that explores transformation pathways, develops future scenarios, looks in more detail at the environmental impacts of different stages and also includes the ‘use’ and ‘end-of-life’ stages.