Leading US-based lithium producer Albemarle has committed an initial investment of USD$1.3Bn to build a new lithium hydroxide processing facility in Chester County, South Carolina.

The new facility is expected to produce around 50kt of battery-grade lithium hydroxide per year, with a potential to increase to 100ktpy. The Mega-Flex title refers to the planned ability to process feedstock from multiple sources, including lithium from recycled batteries.

Back in January 2023, Albemarle presented its outlook for lithium supply and demand, pointing towards to an 800kt supply deficit by 2030. Electric vehicle, energy storage and mobility growth will be growing demand for Li-ion batteries over the next ten years, which in turn will put pressure on available mined and refined lithium supply.

The future supply and demand balance for lithium requires an understanding of the impact of constrained material prices – including lithium carbonate and hydroxide – on the demand for batteries, as well as competing technology developments such as lithium iron phosphate (LFP) and sodium ion (Na ion). Domestic supply of processed materials supported by the likes of the USA's 2022 IRA will still need to compete with new lower-cost battery technologies that continue to be dominated by Chinese capacity and IP.

Albemarle has bet on new lithium hydroxide capacity, but does that meet future global requirements for low-cost batteries which are increasingly forecast to be dominated by LFP and emerging Na ion technologies?