Value of Australian lithium exports tipped to match thermal coal in five years

About 80% of the lithium dug up in Australia is used to make rechargeable batteries and this proportion is expected to reach 90% as EVs become popular. While Australia has been slower to embrace clean cars, global EV sales rose by more than 40% last year, largely due to surging interest in China.

Tony Wood, the energy and climate change program director at the Grattan Institute thinktank, said the forecasts were plausible and Australia was well placed to capitalise on growing demand for lithium and other critical energy minerals, particularly nickel and cobalt.

A Grattan Institute report from last year cited International Energy Agency forecasts that global demand for lithium would grow by up to 41 times by 2040, while the value of nickel and cobalt markets was expected to rise by a factor of 30.

He said backing these industries could create economic value, help reduce emissions and lead to significant employment, often in areas where they would be needed as fossil fuels were phased out.

The 2022 Grattan Institute report said regulation of new and expanding industries would be important. The ABC reported last year that lithium mines in WA have caused water pollution.