By Anthony Fensom
US Government investments, as well as an easing of oversupply, have boosted sentiment among Australia’s lithium miners. With strong demand growth forecast due to the growth in electric vehicles and the battery energy storage system deployment, new projects could be essential to meeting the anticipated increased demand.
On 1 October, Canadian miner Lithium Americas announced an agreement with the US Department of Energy (DoE), under which the DoE would receive a five per cent equity stake in the company, together with a five per cent stake in its joint venture with General Motors concerning its Thacker Pass lithium project in northern Nevada. The DoE also agreed to defer US$182 million of debt servicing over the first five years of its US$2.26-billion loan to the company.
The agreement marked another large private-sector investment by the Trump administration, following its previous investment in US rare earths miner MP Materials.
‘The US Government’s stake in the project delivers on President Trump’s agenda to better steward taxpayer dollars, and ensures the project will go forward, spurring the creation of manufacturing jobs and securing our nation’s access to the largest confirmed lithium deposit in North America,’ US DoE Secretary Chris Wright said in a statement.
He noted that ‘despite having some of the largest deposits, the United States produces less than one per cent of the global supply of lithium’.
Thacker Pass is expected to produce 40,000 metric tonnes of battery-grade lithium carbonate per year in its first phase, sufficient to power an estimated 800,000 electric vehicles (EVs).
An Australian company, European Lithium, has also benefited from the Trump administration’s moves to secure equity stakes in critical minerals projects, due to European Lithium’s 60 per cent interest in Nasdaq-listed Critical Metals Corp.
On 6 October, Reuters reported that Trump administration officials were discussing obtaining a stake in Critical Minerals, which holds the ‘largest rare earths project in Greenland’.
The agreement could reportedly involve the administration converting a US$50-million grant to Critical Minerals into an equity stake, equating to an eight per cent interest in the company.
White House officials later downplayed the report however, suggesting it was one of ‘hundreds of companies’ seeking US Government investment.
The recent agreements follow reports that a number of Australian critical minerals companies visited Washington and New York in September 2025 for talks with senior officials in the Trump administration on potential US Government equity investments.
Stu Crow, Chairman of lithium miner Lake Resources, says the United States’s moves were positive for the sector.
‘President Trump and his administration have demonstrated their willingness to take concrete measures to boost US lithium supply through direct equity stakes, which could expedite US production of this mineral,’ Crow says.
‘These are exciting times for Australian lithium companies as we work to unlock value from our projects, and help build sustainable European and pan-American supply chains.’ Australia is seen remaining as ‘the leading lithium supplier to 2027’, although the nation’s share of global lithium extraction could fall from 36 per cent in 2024 to 31 per cent by 2027, despite mine output growing seven per cent annually, according to the Office of the Chief Economist’s June 2025 ‘Resources and Energy Quarterly’.
The government forecaster sees lithium prices bottoming out in 2025 ‘before recovering slowly [to 2027], as ongoing demand growth starts to mitigate the near-term global oversupply’.
Australian lithium export earnings are projected to reach $6.6 billion in fiscal 2027, up from $4.6 billion in fiscal 2025, with around two-thirds driven by lithium hydroxide earnings.
Structural tailwinds
Miners point to structural tailwinds as the global clean energy revolution picks up speed. The International Energy Agency (IEA) has reported that more than one in four cars sold worldwide in 2025 will be electric, surpassing 20 million vehicles as they ‘become increasingly affordable in more markets’.
EVs’ total market share is on track to exceed 40 per cent by 2030, with emerging markets in Asia and Latin America becoming new growth centres, the IEA said in a 14 May report.
The battery energy storage system (BESS) market is also growing strongly, providing another growth engine for lithium demand that has not yet been widely reflected in forecasts. Global stationary storage grew by more than 120 per cent on an annualised basis in the June quarter 2025, showing a 200 per cent rise from a year earlier, with indications it could become an even bigger market for lithium than EVs.
‘Year-on-year BESS demand growth was over 50 per cent in 2024 – and is forecast to repeat this trend in 2025 as the industry sees continual technological advancements, increasing regulatory support, and strong financial backing for production and deployments,’ analysts Benchmark Mineral Intelligence (BMI) reported on 2 October.
As a result, analysts are pointing to a supply deficit for lithium emerging later this decade, with lithium demand seen roughly doubling over the next five years. BMI expects lithium carbonate prices to recover from around US$9000 per tonne in 2025 to reach US$21,000 by 2031, as structural supply deficits emerge.
Goldman Sachs analysts have also recommended ‘briners over miners’ due to the lower cost base of lithium brine producers in South America’s ‘Lithium Triangle’, notes Crow.
Lake Resources has partnered with California-based Lilac Solutions on its flagship Kachi project in Argentina, with the project targeting the delivery of ‘high-purity lithium at competitive costs’ based on Lilac’s direct lithium extraction (DLE) technology.
In October, former Australian foreign minister and Lake Resources corporate adviser the Hon. Alexander Downer visited Lilac’s Oakland facility, commenting that the DLE technology ‘sets up Lake Resources to be an environmental leader in lithium extraction and reinforced Argentina’s pivotal role in the lithium supply chain’.
With the world’s second-highest reserves and the supply-demand outlook bright, Australian lithium miners are in an excellent position to benefit both at home and abroad.
