Lithium passes through several hands between the ground and a battery: miners, chemical converters, cathode makers and cell manufacturers. Each stage has different economics, geography and risks.
The lithium value chain
| Stage | What happens | Where it is concentrated |
|---|---|---|
| Extraction | Hard-rock mining of spodumene or lepidolite; pumping of salar brines; emerging claystone and geothermal sources | Australia, Chile, China, Argentina, Zimbabwe, Brazil (see production table) |
| Concentration | Ore crushed and upgraded to ~6% Li2O concentrate; brine concentrated in evaporation ponds or by direct lithium extraction (DLE) | At or near the mine |
| Chemical conversion | Concentrate or brine refined into battery-grade lithium carbonate or hydroxide | Mostly China; also Chile, Argentina, Australia and new plants in North America and Europe |
| Cathode and precursor | Lithium chemicals combined with iron phosphate or nickel-manganese-cobalt precursors | Mostly China, followed by South Korea and Japan |
| Cells and packs | Cathode, anode, separator and electrolyte assembled into cells and packs | China (CATL, BYD and others), South Korea, Japan; growing in Europe and the US |
| Recycling | Scrap and end-of-life batteries processed to recover lithium, nickel and cobalt | Growing; the USGS notes continued construction of recycling plants in 2025 |
Hard-rock route (spodumene)
- Mine and concentrate: ore is crushed and upgraded by dense-media separation and flotation to about 6% Li2O.
- Calcine: concentrate is roasted at roughly 1,050°C to convert alpha-spodumene to the more reactive beta form.
- Acid roast and leach: beta-spodumene is roasted with sulfuric acid and leached with water to dissolve lithium sulfate.
- Purify and precipitate: impurities are removed and lithium is precipitated as carbonate (with soda ash) or crystallised as hydroxide.
Australia ships most of its spodumene to China for this conversion step, although refineries also operate in Western Australia (Kemerton and Kwinana).
Brine route
In the salars of Chile and Argentina, lithium-rich brine is pumped into solar evaporation ponds where it is concentrated over many months before being processed into carbonate. Direct lithium extraction (DLE) technologies (adsorption, ion exchange, solvent extraction) aim to pull lithium from brine in hours rather than months with less water loss; several projects use them, but DLE is still scaling up.
Lepidolite and other sources
China produces a large share of its domestic lithium from lepidolite (lithium mica) in Jiangxi province and from salt lakes in Qinghai and Tibet. Lepidolite is lower grade and generates large volumes of tailings, which is why permitting issues there (such as the 2025 suspension of CATL’s Jianxiawo mine) move prices.
Logistics and handling
- Spodumene concentrate ships in bulk carriers, mainly from Western Australian ports to China.
- Lithium chemicals ship in 25 kg bags or one-tonne bulk bags in containers.
- Dangerous goods: lithium hydroxide UN 2680 (Class 8, corrosive); lithium metal UN 1415 (Class 4.3); lithium-ion batteries UN 3480/3481 (Class 9). Lithium carbonate is not regulated as dangerous goods.
Policy and supply risk
- Concentration in China: China dominates chemical refining and cathode and cell production, which has driven US, EU and Australian critical-minerals policies.
- Resource nationalism: Chile placed SQM’s Atacama operations into a Codelco-controlled joint venture from December 2025; Zimbabwe has announced a ban on lithium concentrate exports from January 2027 to encourage local processing.
- Price cycles: the 2023–2025 price slump idled mines in Australia and elsewhere; several restarted in 2026.