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• Prices of lithium have jumped nearly 490% since last year
• US produces less than 2% of lithium, although it has about 4% of global reserves
Elon Musk on Friday tweeted Tesla Inc (NASDAQ: TSLA) may get into the lithium mining and refining business directly at scale as the prices of the metal, a key component in manufacturing batteries, have risen extraordinarily high.
“Price of lithium has gone to insane levels,” Musk tweeted. “There is no shortage of the element itself, as lithium is almost everywhere on Earth, but pace of extraction/refinement is slow.”
The Tesla boss responded to a tweet showing the average price of lithium per tonne from the last two decades, which showed a 1653% jump in prices since 2012.
According to the tweet, the cost of lithium jumped from $17,000 per tonne in 2021 to over $78,000 this year.
Benchmark Mineral Intelligence’s data shows the metal has gone up nearly 488% in the last year.
The majority of the world’s lithium supply comes from South America and Australia.
The US produces less than 2% of the metal, although it has about 4% of the reserves and operates only one active mine in Nevada.
Chile has the largest reserves of lithium in the world.
Lithium is the lightest metal used to manufacture batteries due to its high power-to-weight ratio and is used in smartphones to electric vehicles.
China dominates the global supply chain for lithium-ion batteries.
In 2020, Fortune reported that Tesla secured rights to mine lithium in Nevada after a deal to buy a lithium mining company fell through.
Picture Credit: BBC