Australian companies have expanded lithium mining production in response to the market recovery.

According to a report by the Nikkei website on July 24th, Australian companies are expanding their lithium mining operations. Lithium is an important mineral used in the production of products such as vehicle batteries. Due to the sluggish market situation before and after 2024, many companies suspended production, but as the market has recently recovered, they have resumed lithium production. In addition, these companies are also striving to enhance their profitability and strengthen their ability to withstand price fluctuations.

Australia is the largest supplier of lithium, accounting for 30% of the global lithium production. However, South American countries can extract lithium from brine containing salt at a lower cost. In contrast, Australia has a disadvantage in terms of profitability. If Australian enterprises can enhance their profitability, their influence in the lithium market will further increase.

The Australian lithium industry giant, Mineral Resources Company, has decided to restart the Bald Mountain lithium mine located in the western part of the country. The mine was shut down in November 2024. The company will start producing lithium spodumene concentrate. Based on the conversion to the SC6 specification with a lithium content of 6%, the annual output can reach 140,000 tons.

The company currently has two other lithium mines in operation. Its revenue in the second half of 2025 reached 3.1 billion Australian dollars (approximately 2.18 billion US dollars), an increase of 33% year-on-year; its net profit was 573 million Australian dollars, increasing by approximately twice compared to the previous year, achieving significant revenue and profit growth. With the restart of the Doushan lithium mine, profits are expected to further increase.

Other enterprises have also resumed lithium mining production. The Pilbara Minerals Company resumed the operation of its lithium spodumene concentrate production plant in Western Australia in July. The plant had been out of operation since December 2024. Core Lithium Company resumed the ore mining at the Northern Local Fenniss project in April. The same project also ceased production in 2024.

The underlying factor for this trend is the upward trend in lithium prices. In 2022, the price of lithium was $6,000 per ton; but after 2023, the lithium market entered a situation of oversupply. In 2025, the price of lithium dropped below $600 per ton, and many producers faced losses. Due to the slowdown in the growth rate of electric vehicle sales, the demand side showed weak growth.

In 2026, the sales of electric vehicles showed a recovery trend. The crisis in the Middle East led to the closure of the Strait of Hormuz, resulting in rising fuel prices, which in turn boosted the sales of electric vehicles. The demand for energy storage batteries also remained strong.

Not only has the total sales volume of electric vehicles increased, but also with the rise in sport utility vehicles and the widespread use of large-capacity batteries to meet longer driving range requirements, the lithium consumption per vehicle is also trending upward.

The current lithium price has risen to the range of $2,300 per ton, but the supply is difficult to increase flexibly. This is because the development of new mines, from discovery to production, takes an average of 18 years.

It is widely believed in the market that the shortage of lithium supply will persist until around 2030. According to a prediction by UBS Group, the price per ton of lithium (including the freight and insurance costs to China's ports) will range from $2,855 to $3,750 from 2026 to 2027.
In Australia, the resources suitable for open-pit mining are decreasing, while the trend of underground mining is on the rise.

Lion City Resources Co. Ltd. began underground lithium mining in Australia in 2025. The mining company also plans to switch to a combined open-pit and underground mining operation model in the fiscal year 2028.

When conducting open-pit mining, enterprises need to transport a large amount of soil and rocks. In contrast, underground mining is more efficient. The extraction of high-grade ore deep within the mineral vein is expected to increase the lithium output per ton of ore.

Core Lithium Corporation plans to shift most of its operations to underground mining. If the plan is realized, the operating cost required to produce one ton of concentrate will drop to 762 Australian dollars, which is approximately half of the 2024 fiscal year's cost (1396 Australian dollars).