Lithium (Li) is one of the world’s most important resources, with its derivatives, lithium carbonate, hydroxide, chloride, bromide, stearate, and hydride, used across a significant number of industries and supply chains.
The battery storing electricity from your home’s solar panels, the grid-scale installations balancing entire cities, the electric vehicles (EVs) on your street, the drone overhead, the phone in your hand – all depend on lithium supply in one way or another.
Today, lithium is a key part of the global energy transition, modern transport, mobile technologies, home and grid-scale power storage, and even parts of defence and technology systems that modern nations depend on.
Thanks to its unique chemical and physical properties, its use is found everywhere from solar panels and semiconductors, smart screens to glass manufacturing and advanced manufacturing processes, not to mention its role in a host of other technology-driven sectors.
🔎 Let’s take a look at what lithium is and why it matters in 2026.
• Quick Overview •
What is lithium? A soft, silvery-white alkali metal and the least dense solid element – the gold standard for energy storage thanks to its unmatched electrochemical potential and low weight.
Availability and purity: Found at around 20 parts per million in the Earth’s crust, but deposits concentrated enough to mine economically – in hard rock or underground brines – are far less common.
Extraction and refinement: Extracted via hard-rock mining, solar evaporation, or direct lithium extraction (DLE), then refined into lithium carbonate or lithium hydroxide – with China accounting for around 70% of global lithium processing/refining capacity.
Use in batteries: The essential building blocks of lithium-ion cells, delivering the energy density and cycle life needed from smartphones to grid-scale storage.
Other uses: Ceramics and glass, steel manufacturing, synthetic rubber and plastics, lithium grease, industrial air treatment, and pharmaceutical medications including treatments for bipolar disorder.
Why it matters: Without stable lithium supply, many battery, energy storage, defence and specialist medical supply chains would face higher costs, delays or substitution challenges.
• Lithium Extraction & Mining: Hard Rock, Brine, DLE, and Acid Leaching •
Four lithium extraction options define the industry in 2026:
1. Hard-Rock Mining (Spodumene): The dominant method in Australia, this involves mining lithium-rich pegmatite rock, then crushing and concentrating it into spodumene before chemical processing. It remains the most established route to the high-purity lithium hydroxide preferred by long-range EV manufacturers.
2. Solar Evaporation (Brines): Long the standard approach in South America, this method pumps lithium-rich brine into large evaporation ponds and lets the sun concentrate the lithium over a period of one to two years. It is cost-effective but land-intensive and too slow to respond quickly to shifts in demand.
3. Direct Lithium Extraction (DLE): The modern player – DLE has become one of the most closely watched areas of lithium extraction in today’s market, offering a faster way to recover lithium from brines. Rather than relying on large, slow-moving solar evaporation ponds, DLE uses specialised materials and engineering to selectively capture lithium from brine and produce a concentrated stream for further refinement. In some cases, this can shorten the extraction stage from months or years to hours or days, as well as being more environmentally sustainable.
Major global players advancing or incorporating DLE include Albemarle and Rio Tinto, which completed its acquisition of Arcadium Lithium in 2025, gaining exposure to one of the sector’s longest-running lithium brine and DLE platforms.
Lake Resources (ASX: LKE) is advancing its Kachi Project in Argentina with California-based Lilac Solutions, using ion-exchange DLE technology to target high-purity lithium carbonate. Lake reports lithium recovery rates of up to 95%, alongside a significantly smaller environmental footprint, and media productivity 20 times higher than alumina adsorbents with impurity rejection of 99.9%+.
4. Clay Acid Leaching (Sedimentary): Another emerging extraction frontier – distinct from DLE (which treats liquid brines), this method targets solid lithium bound inside soft sedimentary claystone, silt, and sandstone.
The ore is gathered via shallow open-pit mining, crushed into a slurry, and treated directly with acid – typically sulfuric acid – to rapidly liberate the lithium from the clay matrix. This bypasses the energy-intensive, high-temperature roasting required for traditional hard-rock processing, offering faster processing times and massive volume potential, even though these deposits typically run lower-grade than hard rock.
The leading example is Thacker Pass in Nevada, operated by Lithium Americas (NYSE/TSX: LAC). It hosts the largest known measured lithium resource in the world and is currently under construction with General Motors as a 38% joint venture partner.
ASX-listed Venari Minerals (ASX: VMS) is another company advancing this method at its Red Mountain project in Nevada, where testwork has demonstrated leachability rates of up to 98%. More recently, Venari produced 99.5% purity battery-grade lithium carbonate from first-pass testwork – proof that Red Mountain’s sedimentary mineralisation can be processed into a finished battery chemical using established flowsheets, with additional by-product potential in epsomite and strontium.
• Key Uses of Lithium in Batteries and Power •
1. Renewable Energy & Grid Storage
The shift to renewable energy has created an urgent need for large-scale storage – and lithium is at the centre of it. Battery Energy Storage Systems (BESS) act as a buffer for wind and solar power, absorbing excess generation and releasing it when supply drops, keeping grids stable around the clock.
The scale of deployment is accelerating rapidly. In 2025, US BESS installations surpassed 57 GWh – a year-on-year increase of 29% – with the utility-scale market accounting for the majority of capacity. According to Wood Mackenzie, the US energy storage market hit a record 18.9 GW of installations in 2025, a 52% increase over 2024, with the US predicted to install half a terawatt-hour of storage between 2026 and 2031.
This is not just an American story. Global grid-scale BESS deployments reached 156 GWh through October 2025, up 38% year-on-year, with growth recorded across China, Europe, North America, and a 242% surge in the rest of the world. Australia is among the most active markets, with multiple large-scale projects being commissioned across the country.
2. Defence & Space Applications
Defence is growing as a specialist area of demand for lithium, with lithium-ion batteries used across equipment such as drones, communications systems, field devices, vehicles and satellites. While this represents a smaller part of the overall lithium market, reliable access to battery materials is increasingly viewed as a supply-chain and security consideration for countries including the United States, Australia and other allied nations.
According to SkyQuest research, the global military battery market is projected to grow from USD 1.97 billion in 2025 to USD 6.5 billion by 2033, driven by increasing adoption of lithium-ion batteries across radios, thermal imagers, drones and other defence equipment. In contrast, Fortune Business Insights projects the market from USD 2.57 billion in 2026 to USD 5.22 billion by 2034.
3. Advanced Manufacturing & Innovation
Lithium is a core driver of the mobile revolution and precision engineering. Aerospace, electric vehicles and medical technology all depend on lithium-based chemistries for their energy density and lightweight profile.
NMC811 has been widely used in high-nickel battery development, while newer variants such as NMC955 and NMC973 are being explored to push energy density further. Greater nickel content can help produce smaller, lighter batteries that store more energy.
Lithium remains essential to these battery chemistries, enabling the movement of ions that allows energy to be stored and released. Its role extends from long-range EVs and grid storage to medical technologies people depend on, including pacemakers, implantable cardioverter-defibrillators and neurostimulators.
• Other Uses For Lithium •
Beyond batteries, lithium plays a quiet but essential role across a surprising range of outputs and industries:
- Ceramics and glass (lithium carbonate) – Added to reduce firing temperatures and improve thermal shock resistance, including in products such as cooktops, oven-safe glass-ceramics and some low-expansion glass-ceramic optical applications.
- Steel manufacturing (lithium carbonate) – Used in continuous casting mould flux powders, where it supports lubrication and thermal control during the solidification process.
- Synthetic rubber and plastics (lithium hydride / butyllithium) – Organolithium compounds such as butyllithium act as initiators in anionic polymerisation, particularly in synthetic rubber and some polymers.
- Lithium grease (lithium stearate / lithium hydroxide) – Lithium-based compounds are one of the most widely used thickening agents in grease. White lithium grease is a common lubricant in automotive, industrial and household applications, including products sold by brands such as WD-40.
- Industrial air treatment (lithium chloride / lithium bromide) – Lithium chloride is used as a liquid desiccant in dehumidification and humidity-control systems.
- Pharmaceuticals (lithium carbonate) – Lithium salts have long been used as mood stabilisers, particularly in the treatment of bipolar disorder.
• Key Breakdown •
| Industry / Use Case | Primary Derivative | Why It’s Used |
| Renewable Energy & EVs | Lithium Carbonate | Essential for LFP battery cathodes; provides high safety and long cycle life. |
| High-Performance & Defence | Lithium Hydroxide | Required for high-nickel NMC batteries to maximise range and power density. |
| Pharmaceuticals | Lithium Carbonate | The primary therapeutic salt for treating and stabilising bipolar disorder. |
| Ceramics & Glass | Lithium Carbonate | Lowers firing temperatures and prevents glass from cracking under heat (thermal shock). |
| Steel Manufacturing | Lithium Carbonate | A “flux” that lubricates the mould and controls heat during the steel casting process. |
| Industrial Lubricants | Lithium Stearate | The thickening agent that allows “Lithium Grease” to work at high speeds and temperatures. |
| Air Treatment & Cooling | Chloride / Bromide | “Chemical sponges” that pull humidity from the air in industrial HVAC systems. |
| Synthetic Rubber | Butyllithium | The “initiator” (chemical spark) that starts the reaction to create synthetic rubber. |
| Advanced Chemistries | Lithium Hydride | A powerful reducing agent used as a building block for specialised chemical catalysts. |
– The Bottom Line –
Lithium runs through modern industry. It powers renewable energy, defence systems and high-tech manufacturing.
For governments, manufacturers and energy supply chains, securing more efficient, stable and sustainable lithium supply is becoming increasingly important as part of the global energy transition.
Links:
- US Investments Boost Lithium Miners – Future Mining
- Mining and Processing – Lithium Americas
- Kachi: Powering the Green Transition with Sustainable Lithium from Argentina – SmallCaps (2026)
- Australia – Higher Lithium Exports Supported by Strong Mine Output – Export Finance Australia (2025)
- Lithium in Australia: The Future of the ‘White Gold’ Rush – Mining Technology (July 2025)
- How Is Lithium Mined? – MIT Climate Portal
- Lithium Extraction Methods – Lithium Harvest
- Kachi Project Update – Lake Resources (Investor Hub)
- Red Mountain Lithium Project – Venari Minerals
- Lilac Solutions Gen 5 Ion-Exchange Technology
- Solution Mining – Britannica
- Global Battery Markets: Growth and Supply Risks – IEA (February 2026)
- ‘Exceptional’ 98% lithium recovery at Anson’s Green River DLE pilot – Stockhead (2025)
- Lithium naysayer WoodMac is now a cheerleader, as ASX juniors stir on rising demand – Stockhead (2026)
- Anson and KOCH Successfully Complete Green River DLE Pilot Program – Delivering Industry Leading Results (25 March 2025) – Anson Resources – (ASX: ASN) – ASX Announcement
- Update on Cooperation between Anson and POSCO Holdings for Green River DLE Demonstration Plant – (1 April 2026) – Anson Resources – (ASX: ASN) – ASX Announcement
- Lithium Mineral Commodity Summaries 2026 – USGS
- Lithium Overview – IEA
- SkyQuest Technology Consulting – Military Battery Market
- Fortune Business Insights – Military Batteries Market Size, Share & Industry Analysis
- Electric Vehicle Batteries – IEA Global EV Outlook 2025
What is lithium? Why is lithium important? Lithium and batteries?, Lithium Australia, ASX Lithium.
