Lithium’s New Supply Chain: What EnergyX’s $2bn Deal Tells Manufacturers

EnergyX has secured a $2 billion, ten-year deal to supply Trafigura with 100,000 tonnes of lithium from Chile and the United States. This agreement, with take-or-pay terms, provides developers with revenue certainty and aids EnergyX in obtaining export-credit approval. As stationary storage demand grows over electric vehicles, lithium demand for grid batteries is projected to rise to 570,000 tonnes of lithium carbonate equivalent by 2026, a 55% increase year-over-year.

The higher energy density needed for lithium iron phosphate (LFP) batteries further drives lithium demand. Prices for lithium are expected to average $23,800 per tonne in 2026, surpassing the $20,000 benchmark for the EnergyX contract. Developers are increasingly turning to direct lithium extraction (DLE), a less conventional method that extracts lithium from brine using filters or sorbents, promising quicker and smaller-scale production.

While DLE shows promise, commercial-scale production is still in its early stages, with EnergyX not starting production until 2028 in Chile and 2029 in Texas. Buyers should view DLE volumes as valuable optionality before 2028 rather than dependable supply. The US is also rebuilding its storage-cell manufacturing capacity, with LG Energy Solution and Samsung converting EV lines to LFP, but China still supplies 66.5% of US battery imports.

Despite recent tariff increases, Benchmark forecasts US demand for LFP storage cells will outpace North American production until 2028. This deal highlights the re-engineering of lithium supply around storage demand, emerging extraction methods, and shifting trade rules. Manufacturers should prioritize contracts, qualification, and partnerships now to ensure resilience as DLE tonnage ships.