[The Future of Lithium Dominance]①LG Chem Rejects US Lithium Mining...Experts Warn of Resource Security Concerns

Lithium Prices Plunge to One-Eighth in Three Years
CATL Halts Lithium Mine Operations

LG Chem recently received proposals to participate in lithium mining projects in Arkansas and Oregon, USA, but declined. The company is preparing to operate a cathode material plant in Tennessee, and it is reported that the state government made the proposal, believing LG Chem would be interested in developing domestic lithium resources to stabilize the raw material supply chain. However, LG Chem chose to purchase lithium from the market rather than engage in development, citing sluggish market conditions.

As lithium prices have plummeted, the global trend of preferring purchases over mining has remained unchanged. Korean companies, including LG Chem, POSCO Future M, and EcoPro, are also securing raw materials through long-term purchase agreements rather than direct extraction. However, experts warn that being overly conscious of the price volatility of strategic minerals could raise concerns about resource security.

Scenic view of the lithium pond at the salt lake in Argentina. Photo is unrelated to the article content. POSCO

Lithium is a key material that accounts for 60 to 70 percent of the cost of battery cathode materials. Nevertheless, companies prefer to purchase lithium due to stagnant prices. According to the Korea Mine Rehabilitation and Mineral Resources Corporation's Korea Resources Information Service, the price of lithium fell sharply from a record high of 581.5 yuan (about 113,000 won) in November 2022 to 68-73 yuan in August 2025, which is about one-eighth of the previous peak. As the electric vehicle market grows slowly, lithium demand has also not increased significantly. In addition, China is supplying major lithium compounds such as lithium carbonate and lithium hydroxide at low prices due to improvements in refining technology.

On the other hand, lithium in Arkansas is at the stage of developing new technology for direct extraction from brine, making it difficult to determine the exact production cost. Recently, CATL in China also decided to halt production at a large lithium mine for at least three months due to deteriorating profitability, which is cited as another reason for hesitancy toward development projects.

The background to LG Chem receiving a "love call" is its cathode material plant in Tennessee. In 2023, LG Chem began construction of the largest cathode material plant in the United States in Tennessee, with an annual production capacity of 60,000 tons. Located in the mid-eastern region of the United States, the plant offers significant geographical advantages for supplying customers and importing raw materials, and is scheduled to begin operations in 2026.

However, experts point out that, given the difficulty of predicting price volatility, decisions should be made with resource security in mind. Kang Cheongu, a visiting professor at Inha University's Graduate School of Manufacturing Innovation, said, "Since Korea does not have any lithium mines and our battery industry relies mainly on lithium-ion batteries, we must secure lithium by any means. If exports are restricted from China, Chile, or Australia, we would face direct price shocks and our resource security could be undermined."

Global lithium producer Albemarle has forecast that, due to the U.S. Inflation Reduction Act (IRA) and increasing demand for electric vehicles, global lithium demand will reach 3.7 million tons by 2030. In contrast, lithium supply is expected to reach only 2.9 million tons, resulting in a projected supply shortage of about 800,000 tons.

The United States is actively pursuing lithium production projects to reduce dependence on China. U.S. company Geoframe Energy plans to break ground on a direct lithium extraction project at Vernon Mountain, Texas, by the end of this year, aiming to produce about 83,500 tons of lithium carbonate annually. This is said to be enough to meet 100 percent of domestic lithium demand in the United States.

According to major foreign media, Arkansas may contain between 5 million and 19 million tons of lithium reserves. This is more than enough to meet global demand, and numerous energy companies, including ExxonMobil, are participating in mining projects. At the border of Oregon and Nevada, a lithium clay deposit estimated at 20 million to 40 million tons has been discovered, with the value of the reserves estimated at up to $1.48 trillion (about 2,047.7 trillion won).

Lee Woonhyuk, president of the Energy Security and Environment Association, said, "As the global free market order collapses, the era in which prices are determined by supply and demand principles is over. We are now in an era of 'resource wars' or 'resource nationalism,' so we must approach this from the perspective of resource security rather than market prices, and strategically stockpile resources in advance."