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Lithium Prices Rise as Supply Fails to Meet EV Demand

Lithium is used in rechargeable batteries, including the ones found in electric vehicles.
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The short supply of industrial grade lithium is causing prices to spike, which could snarl a push by governments to ramp up the use of electric vehicles

Lithium is used to power rechargeable car batteries, among other uses, but a recent bear market and supply chain issues have prices rising. So far that has benefited only a small group of companies while inconveniencing many others, the Wall Street Journal reports. 

The problem isn't the supply, but the the high cost of converting the metal into industrial use. That process has pushed prices up about 240% for the year, according to research firm and price provider Benchmark Mineral Intelligence. 

The Global X Lithium & Battery Tech ETF  (LIT) - Get Global X Lithium & Battery Tech ETF Report is up more than 40% year to date. 

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Chile has the world's largest lithium reserves by a large margin. Its estimated 9.2 million metric tons is nearly double the 4.7 million metric tons that second place producer Australia has. 

But China is the world's leader in lithium chemical processing and battery production, meaning that the supply chain is out of the hands of American companies. 

The Journal notes that one of the largest impediments to the U.S. taking the lithium mantle is environmental opposition and permitting delays at the local level. 

Earlier this year, Koch Strategic Platforms invested $100 million in Standard Lithium, a company that has partnered with a German firm to produce lithium chemicals in Arkansas.