Lithium producers have warned that delays in mining permits, staff shortages and global inflation may cause difficulties in meeting the rapidly increasing demand for electric vehicle (EV) batteries, Reuters reports.

Lithium, critical to the production of EV batteries, has fast become a top commodity as countries move to ramp up EV uptake in place of the traditional combustion engine to meet global climate targets.

“You could end up in a crisis situation where the battery companies don’t have the security of (lithium) feedstock,” Stu Crow, chairman of lithium producer Lake Resources, said on the sidelines of this week’s Fastmarkets Lithium and Battery Raw Materials conference in Las Vegas.

“There is a disconnect between the panic that we are seeing here, and the frenetic activity of trying to secure supply within the industry,” he added.

Last week, Lake Resources became the latest lithium company to announce delays to production as its Kachi project in Argentina, pushing back plans to deliver 50,000 tonnes (t) per annum (ttpa) by 2024 to just 25ttpa by 2027 and 50ttpa by 2030.

Albemarle, the world’s biggest lithium producer, also expects global lithium demand to outstrip supply by some 500,000t by 2030, despite its growth success across the Americas, Asia and Australia.

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By GlobalData

Head of Albemarle’s lithium business Eric Norris called the surge in demand “a big challenge” as supply and logistical concerns plague the industry.

According to presentations at Fastmarkets, there were 45 lithium mines operating globally in 2022, with a further 11 planned to open this year, and an additional seven in 2024, but this will not be enough, forecasts say.

Even if more raw lithium is sourced from additional mines, there may be a potential shortage of facilities used to refine the metal to battery-grade materials. As a result, carmakers may be forced to accept lower-quality lithium, which will decrease a battery’s range and lifespan, executives have said.

“There is a big difference between lithium that comes out of the ground and lithium that goes into a battery,” explained Sarah Maryssael of lithium technology company Livent.

On top of supply and production issues comes social and environmental barriers to lithium expansion. In May, Albemarle announced plans to expand its lithium mine in Chile’s Atacama region to the dismay of local and indigenous communities.

The vast amount of water required to extract lithium has caused severe droughts throughout the area. “Communities are suffering a slow violence that is creating conditions of ecological exhaustion,” said James J A Blair, assistant professor at California State Polytechnic University.

Elena Rivera Cardoso, president of the indigenous Colla community in northern Chile, said: “We used to have a river before that now doesn’t exist. There isn’t a drop of water.

“And not only here in Copiapó but in all of Chile, there are rivers and lakes that have disappeared, all because a company has a lot more right to water than we do as human beings or citizens of Chile,” she added.