Cost Analysis of Lithium Carbonate

When conducting a cost analysis of lithium carbonate, it is essential to focus on its diversified process routes and their corresponding cost structures, as well as to understand the current market landscape characterized by significant cost disparities and ongoing industry consolidation.

The table below summarizes the cost and market overview of different process routes for lithium carbonate as of the third quarter of 2025, helping you quickly establish an overall understanding.

Process Route	Typical Cost Range (10k RMB/ton)	Cost Structure & Key Characteristics	Major Representative Companies
Salt Lake Brine Extraction	3-4	Lowest cost, significant advantage; mostly produced as a byproduct of potash, large profit margin	Salt Lake Industry, Zangge Mining
Lepidolite Extraction (Own mine)	~6.3	Improved technological maturity; processing cost can be as low as 30k RMB/ton; however, high environmental pressure, rigid increase in lepidolite residue treatment cost	Yongxing Material, Manufacturers in Yichun area
Spodumene Extraction (Own mine)	~6.5	Mature process but relies on imported ore; cost affected by international logistics and trade conditions	Tianqi Lithium, etc.
Purchased Lepidolite Concentrate	~7.4	Cost heavily influenced by raw material purchase price; highly prone to losses when prices are low	Some processing enterprises
Purchased Spodumene Concentrate	~7.7	Highest cash cost; difficult to survive in price environments above 70k RMB/ton	Some processing enterprises

The cost analysis of lithium carbonate is mainly carried out from the perspective of different production processes. The detailed analysis is as follows：

Salt Lake Brine Extraction

Cost advantage: The cost of lithium extraction from salt lakes is typically the lowest, generally ranging from 30,000 to 50,000 RMB/ton. Its core advantage lies in the extremely low raw material cost – the salt lake brine is mostly a proprietary resource, and the extraction cost is almost negligible.

Cost structure:

Raw material cost: accounts for 20%–35%, mainly including small amounts of adsorbents, membrane materials, soda ash, and other auxiliary materials used for lithium adsorption and purification.

Production cost: accounts for 40%–55%, including energy costs and processing costs. Energy mostly uses natural gas or electricity for heating and evaporation processes; processing costs involve equipment depreciation, labor, and manufacturing overhead.

Environmental cost: accounts for 10%–20%, primarily expenses incurred in treating impurities such as magnesium and boron in the brine.

Depreciation and other costs: accounts for 5%–15%, including equipment depreciation, management, and logistics costs.

Spodumene Extraction

Cost range: Generally 55,000–80,000 RMB/ton. If an enterprise has its own high-grade spodumene mine, the cost can be reduced to 55,000–60,000 RMB/ton; if purchasing spodumene concentrate externally, the cost will rise to 60,000–80,000 RMB/ton or even higher.

Cost structure:

Raw material cost: accounts for 60%–70%. Spodumene concentrate is the main raw material. Different grades and different purchase prices lead to large cost differences. In addition, auxiliary materials such as sulfuric acid and soda ash are also required.

Processing cost: accounts for 20%–25%, including costs for processes such as roasting, acidification, and lithium precipitation, which are affected by factors such as production process and scale.

Energy and environmental costs: account for 8%–12%, including energy costs such as electricity and coal consumption, as well as expenses for waste residue treatment and environmental taxes.

Depreciation and other costs: account for 5%–10%, mainly depreciation of production equipment, as well as other costs such as labor and resource tax.

Lepidolite Extraction

Cost range: The cost is relatively high, generally ranging from 60,000 to 130,000 RMB/ton. For high-grade lepidolite (grade above 0.6%), the extraction cost is about 80,000–120,000 RMB/ton; for low-grade lepidolite (grade below 0.2%), the extraction cost can be as high as 275,000–410,000 RMB/ton.

Cost structure:

Raw material cost: accounts for a high proportion. The raw lepidolite ore has low grade, requiring a large amount of ore to produce 1 ton of lithium carbonate, and the mining and transportation costs of the raw ore are relatively high.

Processing cost: The process is complex, requiring multiple steps such as roasting, leaching, purification, and lithium precipitation. Energy and auxiliary material consumption are high, resulting in relatively high processing costs.

Waste residue treatment cost: Lepidolite extraction generates a large amount of waste residue, which is difficult and costly to handle. The waste residue treatment cost per ton of lithium carbonate can reach 1,500–3,000 RMB.

Cost Structure and Market Status

After understanding the data in the table, we also need to delve deeper into the market dynamics behind it.

The game between cost and price: According to the data, on October 31, 2025, the market price of battery-grade lithium carbonate was 83,000–84,000 RMB/ton. Comparing with the table above, it can be seen that this price has pierced the cost line of most enterprises that produce using purchased ore, forcing them to reduce or halt production. However, salt lake brine extraction and some lepidolite enterprises with their own mines are still able to remain profitable, which is also an important reason for the current oversupply and slow capacity liquidation.

Technological upgrades driving costs down: Taking lepidolite extraction in Yichun as an example, through solid-phase roasting process upgrades (such as lowering the roasting temperature), the recovery rate has been improved, while energy costs such as natural gas have decreased, making the development of low-grade resources (0.3%–0.4%) economically viable. However, further cost reduction faces dual bottlenecks: the lithium recovery rate approaching its technical ceiling and rising environmental costs.

Industry Difficulties and Future Trends

The current lithium carbonate industry is undergoing a profound period of adjustment.

Supply-demand imbalance and capacity liquidation: Global lithium carbonate production capacity continues to expand, especially with capacity releases from low-cost regions such as South American salt lakes and African lithium mines, intensifying supply pressure. On the demand side, although the new energy vehicle market is still growing, the growth rate has slowed significantly. As a result, the industry as a whole is in a state of oversupply, with prices under continuous pressure and the capacity liquidation process slow and painful.

Future cost and price trends: In the short term, due to slow inventory digestion and ample low-cost capacity, lithium carbonate prices are expected to continue fluctuating near the bottom. Some analyses suggest that the medium- to long-term bottom range may be 60,000–70,000 RMB/ton. In the future, improvement in the industry's profitability will depend on, on the one hand, the complete liquidation of excess capacity, and on the other hand, breakthroughs in next-generation lithium extraction technologies (such as full hydrometallurgical processes) and the high-value utilization of solid waste to open up new space for cost reduction.

Enterprises' Competition and Breakthrough Strategies

In the fierce cost competition, enterprises are adopting different strategies to survive and succeed.

Resource integration is a key moat: Enterprises that own their own lithium mines or salt lake resources, such as Yongxing Material and Salt Lake Industry, have an absolute advantage on the cost side and are able to ride out cycles and maintain profitability. This is also why downstream battery giants and upstream mining companies are actively pursuing vertical integration to smooth out the risk of raw material price fluctuations.

Technological advancement and environmental compliance: Leading enterprises are continuously investing in R&D, not only to optimize lithium extraction processes but also to focus on the utilization of solid waste such as lithium slag as building materials, in order to meet increasingly stringent environmental requirements and unlock potential value.