Lithium Mining and Refining Market (2026-2036)

The growth of this market is mainly driven by the recovery in lithium chemical and concentrate pricing from the levels that prevailed in 2025, which has approximately doubled the value of the same physical volume; the continued expansion of battery demand for electric vehicles and stationary storage, which converts directly into lithium carbonate equivalent requirements; the restraint shown by producers in committing new capital despite that price recovery, which limits the supply response and supports pricing through the near term; and the restructuring of resource ownership in the principal producing jurisdictions, which is securing long-term operating rights while changing how the resulting value is shared.

In addition, the shift in cathode chemistry toward lithium iron phosphate, which favours lithium carbonate over lithium hydroxide, the development of direct lithium extraction as an alternative to evaporation ponds and acid roasting, and the long-dated nature of the expansion projects now in progress are further shaping the growth of this market. The 2025 base and the 2026 estimate reflect materially different price environments, and the forecast in this report is built on a stated long-run price assumption rather than on an extrapolation of the 2026 price level.

The Lithium Mining and Refining Market comprises the extraction of lithium-bearing resources and their conversion into the chemical products that battery and industrial customers purchase. The market includes brine extraction from salars and the evaporation, purification and precipitation that follow; hard rock mining of spodumene, lepidolite and petalite pegmatites and the flotation that produces concentrate; the acid roasting, leaching and crystallisation that convert concentrate into lithium carbonate and lithium hydroxide; the production of lithium metal, chloride and specialty organolithium compounds; and the emerging extraction of lithium from clay-hosted deposits, geothermal brine and oilfield brine. The market ecosystem extends from resource holders and host state entities through miners, concentrate producers, tolling converters and integrated chemical producers to cathode and battery manufacturers, industrial users in ceramics, glass, greases and air treatment, and the regulators, water authorities and community stakeholders whose consent determines whether a project proceeds.

The defining feature of this market in 2026 is that its value has changed far more than its volume. For the second quarter of 2026, Albemarle Corporation reported an average realized price of USD 19.53 per kilogram of lithium carbonate equivalent against USD 12.17 per kilogram a year earlier, an increase of 60.5%, while sales volume rose 11.0% to 65 thousand metric tons of lithium carbonate equivalent from 59 thousand metric tons. A 60.5% price increase against an 11.0% volume increase shows where the movement in market value originated, and any assessment that attributes the 2026 expansion of this market to demand growth will misread it.

The leverage that price exerts on reported results is extreme. Albemarle Energy Storage net sales rose 77.9% to USD 1,276.7 million and segment adjusted EBITDA rose 229.3% to USD 723.5 million, attributed primarily to higher lithium pricing partially offset by higher CORFO commissions, while group net sales rose 31.1% to USD 1,743.3 million and group adjusted EBITDA rose 155.0% to USD 858.1 million. Segment adjusted EBITDA rising 229.3% on a 77.9% sales increase and an 11.0% volume increase is the arithmetic of a business whose costs are largely fixed against a price that is not, and it is why the earnings of this industry are a poor proxy for the physical scale of the market.

The same pattern appeared at the other major brine producer in more pronounced form. For the second quarter of 2026, Sociedad Química y Minera de Chile S.A. reported revenues of USD 2,468.4 million against USD 1,042.7 million a year earlier, an increase of 136.7%, net income of USD 660.0 million against USD 88.4 million, and lithium and derivatives revenues of USD 1,779.2 million against USD 445.2 million, an increase of 299.7%, on sales volumes above 84.1 thousand metric tons of lithium carbonate equivalent against 53.1 thousand metric tons, an increase of 59%. A 299.7% increase in lithium revenues on a 59% volume increase separates cleanly into a volume contribution and a much larger price contribution, and because this producer sells both chemicals and concentrate, its disclosure also reveals how the two moved relative to one another.

That relative movement is informative. The average realized price at Nova Andino was approximately USD 21.8 per kilogram in the second quarter of 2026, up almost 23% against the first quarter of 2026 and close to 160% year on year, while the spodumene price was approximately USD 2,048 per metric ton, up more than 40% against the first quarter and more than 160% year on year. Concentrate pricing rising more than 40% quarter on quarter against chemical pricing rising almost 23% indicates that the mine gate captured more of the recovery than the converter did, which is the opposite of the pattern through the downturn, when converters with tolling capacity were able to protect margin against falling chemical prices. The implication is that integrated producers and concentrate holders are better positioned in a rising market than independent conversion capacity.

The sensitivity of this industry to price is now disclosed explicitly rather than inferred. Albemarle published a scenario-based full-year 2026 outlook in which a lithium price of approximately USD 10 per kilogram, the average for 2025, produces net sales of USD 4.1 billion to USD 4.3 billion and adjusted EBITDA of USD 0.9 billion to USD 1.0 billion, a price of approximately USD 20 per kilogram, the average for the first quarter of 2026, produces net sales of USD 5.7 billion to USD 6.0 billion and adjusted EBITDA of USD 2.4 billion to USD 2.6 billion, and a price of approximately USD 30 per kilogram, the average for 2021 to 2025, produces net sales of USD 7.5 billion to USD 7.8 billion and adjusted EBITDA of USD 4.2 billion to USD 4.4 billion. A fourfold range in full-year adjusted EBITDA driven by a single variable, published as guidance rather than as sensitivity analysis, is an unusual admission and it is the clearest statement available of where the risk in this market lies.

What has not happened is the supply response that such a price recovery would ordinarily provoke. Albemarle guided full-year 2026 Energy Storage sales volume of 225 to 235 thousand metric tons of lithium carbonate equivalent and capital expenditure of approximately USD 500 million, down 15% against 2025, having placed Kemerton Train 1 into care and maintenance with associated restructuring charges of USD 7.3 million in the quarter, while a fire on 9 June delayed the ramp of Talison CGP3 with minimal expected effect on volume owing to better than planned output at Wodgina. A 15% reduction in capital expenditure and a conversion train placed into care and maintenance, decided while realized prices were rising more than 60%, is evidence of capital discipline that survived the price recovery rather than ending with it, and it reflects the experience of a downturn in which capacity committed at high prices was commissioned into low ones.

The expansion that is proceeding is long-dated and therefore does not relieve the near term. Sociedad Química y Minera de Chile S.A. expects the conversion of the Nova Andino lithium hydroxide plant into a dual-purpose facility to be completed by mid-2027 and expects to surpass 300,000 metric tons of production capacity by the end of 2027, while the Mt Holland expansion with Wesfarmers is expected to double attributable spodumene concentrate capacity to approximately 350 thousand metric tons at 6% lithium oxide, requiring approximately USD 450 million to USD 500 million attributable between 2026 and 2029 with first production expected during 2030, and the Salar Futuro project carries an estimated capital investment of approximately USD 3 billion over about seven years following approvals. Capacity surpassing 300,000 metric tons by the end of 2027 at an existing operation, a doubling of attributable concentrate capacity with first production during 2030, and a USD 3 billion brine project requiring approximately seven years after approvals together describe a supply response arriving in the 2030s, which leaves the intervening period dependent on existing assets and exposed to price.

Alongside the commercial cycle, the ownership of the resource itself has been restructured in the largest brine jurisdiction. On 27 December 2025, Codelco and Sociedad Química y Minera de Chile S.A. formed Nova Andino Litio SpA by merging Minera Tarar SpA with SQM Salar SpA, a public-private partnership with majority state participation and a board comprising three Codelco and three SQM representatives, which holds the assets, permits and staff of the lithium business and conducts exploration, exploitation, production and commercialisation of lithium in the Salar de Atacama under the current CORFO contracts and those taking effect from 2031, with operations secured through 2060. A public-private partnership with majority state participation holding the permits, assets and staff of an operation secured to 2060 resolves the licence uncertainty that had overhung the asset, and it establishes a template in which the host state participates in the equity of production rather than only in its taxation. The consequence for this market is that long-term access to the lowest-cost resources increasingly requires a state partner, which changes the return available to private capital without changing the physical supply.

The market includes integrated chemical producers, diversified miners, Australian hard rock producers, Chinese converters and host state entities, among them Albemarle Corporation, Sociedad Química y Minera de Chile S.A., Ganfeng Lithium Group, Tianqi Lithium Corporation, Rio Tinto Group, Pilbara Minerals, Mineral Resources, IGO, Corporación Nacional del Cobre de Chile, Zijin Mining Group, Yahua Industrial Group, Chengxin Lithium Group, Zangge Mining, POSCO Holdings, Lithium Americas Corporation, Eramet, Wesfarmers and Liontown Resources. Participants compete on position on the cost curve, resource grade and impurity profile, integration between mine and conversion capacity, product qualification with cathode producers, security of licence and host state relationship, water and permitting position, and the capital flexibility to withstand a price cycle rather than to expand into one.

At the same time, the market faces challenges, including the price volatility that makes project economics difficult to underwrite; the mismatch between the multi-year lead time of new capacity and the duration of a price cycle; water use, brine abstraction and community consent constraints in salar jurisdictions; the concentration of conversion capacity in a single country, which exposes the chain to trade and policy measures; and the dependence of demand on cathode chemistry choices that can move lithium requirements per kilowatt hour without any change in battery demand. As a result, producers that combine low-cost resource positions, integration through to chemical product and capital discipline through the cycle are expected to capture the largest share of value over the forecast period.