Lithium Demand Is Set to Explode: Is It Time to Buy?

On one side of the world, anti-mining protesters shouted and clashed with security guards.

Some waved flags and carried signs, with messages like, "Our land is not for sale." At the heart of the struggle was one metal... lithium.

This was the scene at the United Nations Climate Change Conference (COP30) on November 17 in Belém, Brazil. The message – voiced loudest by Indigenous groups from Argentina – was that mining is straining fragile water ecosystems.

On the other side of the world, almost at the same time, lithium prices were ripping higher...

One of China's largest lithium suppliers predicted that demand for the metal would surge more than 30% next year. The bullish forecast sent futures in Guangzhou to their daily upper limit – and miners' shares soared.

The contrast of this single day shows us something important...

We're entering a non-negotiable reality of supply and demand. The world is pushing for electric vehicles (EVs), large-scale batteries, and new technologies.

And that means the future is going to require staggering volumes of minerals – chief among them, lithium.

Prices are finally responding to this inevitable truth. Today, I'll explain why this new breakout could be the start of a larger bull run for lithium miners... And I'll share exactly what investors need to know as it plays out.

What Happened: Lithium's Market Snapback

Lithium prices have been in a deep freeze for nearly two years.

The metal made an explosive rally in 2021 and early 2022, thanks to EV mania. Lithium prices soared 650% over historical averages. Then, it all unraveled...

China's battery producers overbuilt capacity. Global EV sales slowed, and inventory ballooned. By late 2024 and early 2025, the market was sitting on a lithium surplus.

Prices kept grinding lower... until recently.

On Monday, November 17, the chairman of Ganfeng Lithium predicted 30% demand growth next year. Ganfeng is the second-largest lithium processor in the world.

Investors took notice immediately.

The most-active lithium carbonate contract on the Guangzhou Futures Exchange jumped 9% on the day.

Shares of major lithium producers Albemarle (ALB) and Chilean firm Sociedad Química y Minera (SQM) jumped as much as 9% and 14%, respectively.

Smaller producers rallied even more sharply. Lithium Americas (LAC) and Lithium Argentina (LAR) each rose about 15%. And Sigma Lithium (SGML) spiked an eye-popping 41%.

The sudden surge doesn't erase lithium's dramatic pullback of the past two years. But it signals something important...

Sentiment may be turning around for lithium. And the catalysts are starting to shift in its favor.

A New Type of Battery Is Driving Demand

Lithium has always been about batteries. But what kind of battery demand is driving the next cycle?

The first wave came from EVs, which remain the biggest single source of lithium consumption. But EV demand has become lumpy. Growth hasn't vanished – it's just slowing from triple-digit mania to something more rational. That's partly why the market hit a supply glut.

The new demand catalyst is energy storage.

Ganfeng's bullish projection was based on rising demand for large-scale battery storage. This includes systems used to run data centers and keep electricity grids stable.

And unlike EV demand, which rises and falls with consumer choices, grid-storage demand rises with the needs of the electric grid itself...

The more solar and wind capacity is deployed worldwide, the more energy storage is required. It helps smooth out hourly and seasonal variability. Every gigawatt of renewable capacity adds new steady demand for lithium-based systems.

But that's not all – because of the rise of AI...

Data centers have become an unexpected new pressure point on the electrical grid. Operators are building out massive backup storage systems to keep energy-hungry AI servers running smoothly.

The AI revolution is a new twist in this story... And AI may wind up being one of the most important long-term drivers of the next lithium cycle.

Now, researchers are developing alternative battery chemistries – like sodium-ion and solid-state systems – that could eventually complement lithium, or partially replace it. But these technologies are still years away from meaningful scale.

Simply put: Lithium isn't going anywhere anytime soon. And demand is increasing – not falling.

How the Political Geography Controls Lithium Supply

The world's largest known lithium reserves lie in South America's "Lithium Triangle."

The Lithium Triangle is a stretch of high-altitude desert that spans through parts of Argentina, Chile, and Bolivia.

These salt flats hold more than half of global lithium reserves. The lithium is concentrated in brines (salt-rich subterranean waters) trapped beneath ancient evaporated lakebeds.

Chile and Argentina are already major producers today. Bolivia holds the largest resource base, but it has struggled for decades to move to commercial output.

And as the protests at COP30 showed, communities in these regions are increasingly frustrated. They're opposed to the environmental risks of mining these vast brine resources.

Australia, by contrast, leads the world in lithium production. That's not because of brines, but because of hard‑rock spodumene deposits. These ore bodies are easier to mine. And it's faster to convert them into battery‑grade chemicals.

This is why Australia has become the workhorse of global supply.

Finally, China has the second-most reserves of any single country... But it dominates the refining and processing side of the industry.

China converts the majority of the world's mined lithium into cathode‑ready chemicals. That's a big processing choke point. And it has become one of the most significant geopolitical flashpoints in the battery supply chain.

These are the challenges – and advantages – of the global lithium supply map.

Most important, we can see just how difficult it will be to source the volumes of lithium that a fully electrified future will require.

But the U.S. is poised to become a much bigger player in the lithium space...

The U.S. Lithium Landscape Is Ready for Growth

The U.S. may be a bit late to the lithium race, but it isn't resource‑poor. Far from it. The U.S. ranks No. 5 for the most proven reserves of any single country on Earth.

The most promising U.S. lithium resource lies in the Smackover Formation. Smackover is a vast brine reservoir stretching across Arkansas, Texas, and Louisiana.

These brines contain some of the highest‑grade lithium concentrations in North America. As a result, companies like Standard Lithium (SLI) and ExxonMobil (XOM) have poured money into the region... And so has the U.S. government.

Standard Lithium recently secured a $225 million grant from the Department of Energy to accelerate development of its Arkansas project. It's a sign that Washington is taking domestic lithium supply seriously.

West of Smackover, we also have the vast lithium resources of the McDermitt Caldera system along the Nevada–Oregon border. And McDermitt may prove to be the single most important lithium discovery in U.S. history...

A renewed geological assessment in 2025 confirmed that McDermitt holds between 20 million and 40 million metric tonnes of lithium... potentially valuing the site at more than $1.5 trillion.

This would place it ahead of Bolivia's Salar de Uyuni and nearly every known global deposit. If so, it would be one of the world's largest concentrations of lithium ever identified.

Efforts to start commercial production are already underway. At the southern end of the caldera, smaller producer Lithium Americas is developing the Thacker Pass project. It's backed by more than $2 billion in government loans and strategic investment from General Motors (GM)... And extraction is slated to begin in 2026.

(The Department of Energy has also taken a 5% equity stake in Lithium Americas, further showing the strategic importance it sees in these projects).

Meanwhile, on the Oregon side, Australia‑based Jindalee Lithium (JLL) is exploring another vast claystone deposit. Geologists believe it could rival or even surpass Thacker Pass in size, but development remains in early stages.

Together, these hotspots form a patchwork of U.S. lithium potential. We have a wealth of resources. But the geology is complicated... And the technology must prove itself under real‑world conditions.

Should You Invest in Lithium Today?

Lithium may power the future, but for investors, it's still a commodity... And commodities behave on their own terms.

Prices swing hard. Booms lead to overbuilding. Supply gluts often follow periods of euphoria. And with critical resources like lithium, control over supply and processing can quickly become a geopolitical chess piece.

Consider another metal caught up in the hype cycle of our tech-driven future: copper...

Just this past summer, copper prices whipsawed as the U.S. and China traded tariff threats over critical mineral supply chains. Even a seemingly boring industrial metal can become a geopolitical flashpoint overnight.

Many commodities are now strategic assets. And their prices can swing violently on political headlines, not just fundamentals.

This latest breakout in lithium prices is a reminder of how quickly sentiment can shift for the better... But it also doesn't mean we can forget this underlying volatility.

So, what should you do if you're interested in lithium as an investor today?

First, make sure you're aware of the conventional wisdom in mineral investing:

• Avoid betting on direct commodity exposure unless you're prepared for the full boom-and-bust cycle...
• Avoid early‑stage projects that depend on unproven technology, and...
• Remember that even high‑quality assets can struggle when prices fall.

These rules of thumb will help protect you from the volatility of the commodities industry.

Second, you need to recognize that while the clean‑energy transition may be bullish for lithium, it likely won't be a one-way trip higher.

Finally, you can gain exposure to rising lithium demand without taking on the full risk of mining or commodity speculation.

One way is to look for established businesses with lithium "optionality"...

These are companies whose core operations already generate real revenue today, but whose assets or strategic positions give them asymmetric upside if lithium production scales in the years ahead.

The Bottom Line on Lithium’s Future

Lithium sits at the center of a global paradox.

The world needs far more lithium to meet its growing energy-storage needs... yet extracting it remains full of environmental, technological, and geopolitical challenges.

Prices will rise and fall... Narratives will swing from oversupply to shortage and back again.. And investors who treat lithium like a straight‑line growth story are likely to be disappointed.

But that doesn't mean investors should ignore the sector. It simply means you need to approach it with discipline – just like with any commodity.

The winners over the next decade will be the companies that can survive cycles, navigate permitting and processing bottlenecks, and lock in access to long‑term resources.

For most investors, the smartest way to participate in this structural trend isn't by swinging for the fences with single‑asset miners, but by owning companies with lithium optionality.

Look for businesses that generate real cash today... while holding assets that could become exponentially more valuable tomorrow.

Good investing,

John Robertson

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Get the full story here, while you can.