The surge in demand for electric vehicles is fueling optimism for lithium prospects, with the opening of a new mine east of Perth.

Despite current low prices prompting some players to scale back their growth plans, Wesfarmers and its Chilean partner SQM remain optimistic about the future of lithium. SQM’s CEO, Ricardo Ramos, anticipates a notable improvement in lithium prices by the end of the year, with even better prospects expected for 2025. Speaking at the inauguration of the Mt Holland lithium mine, Ramos emphasized that this is just the beginning of their plans in Australia, expressing a desire for multiple projects similar to Mt Holland.

While SQM specializes in lithium, Wesfarmers is entering the lithium business at a time when established players are downsizing. Wesfarmers’ CEO, Rob Scott, stated that the conglomerate is continuously exploring opportunities in battery minerals, highlighting the challenge of accelerating project development to bring them to market sooner.

Despite delays in projects like Albemarle’s expansion plans and production cuts at WA’s Greenbushes lithium mine, research by Citi suggests that the lithium market may have bottomed out. Citi maintains its long-term growth outlook for lithium at 20 percent per year, although it anticipates only modest price increases in the near term.

The underlying optimism stems from the inevitable growth in electric vehicle sales, where batteries constitute a significant portion of costs, with lithium being a crucial component for all battery types.