The demand for raw materials from lithium-ion batteries is outpacing their global supply from mining, making the battery sector an increasingly dominant driver of raw material consumption. This trend is already evident in lithium and cobalt markets. IDTechEx’s research shows that the trend is expected to extend to other raw materials, with nickel being a major example. The trend presents significant growth opportunities for upstream players, especially those that are able to tailor their products to meet the demand and material requirements of the battery market.
At a global scale, IDTechEx observes a growing trend that countries are prioritizing the expansion of materials processing capacity (value-added facilities) for batteries. This shift is driven by factors such as the economic benefits from value-added products and the increasing awareness for supply chain localization/security. Indonesia, the world's largest nickel producer, is curbing the expansion of nickel processing capacity for the stainless steel industry while promoting capacity growth in nickel processing for the EV sector.
From a commercial perspective, raw materials suppliers and miners are increasingly expanding their involvements in downstream materials processing for batteries. Several upstream players are shifting towards integrated business models that allow them to directly supply battery-grade chemicals to OEMs and battery manufacturers. Examples of such include lithium players like Vulcan Energy Resources, producing battery-grade lithium chemicals from geothermal brines. Graphite players like Nouveau Monde Graphite that aims to supply active anode materials directly to battery and EV manufacturers through an integrated production approach. In the nickel sector, PT Merdeka Battery Materials Tbk is strategically advancing toward becoming an integrated battery materials company. With nickel mining and processing operations in Indonesia, the company is strengthening its position in the battery materials value chain through partnerships with established industry players such as Brunp CATL and GEM Co., Ltd.
Numerous examples and case studies that recognize the growing desire for vertical integration for players along the battery value chain can be found in the report.
The growing importance of raw materials processing
Upstream players recognize opportunities to capture additional value by expanding their business models beyond raw material extraction. Increasing involvement in materials processing and refining is a key strategy, bringing them closer to end-users and enhancing value creation. Battery manufacturers and OEMs, similarly, are increasingly engaged in back-integration through investments to secure their supply of raw materials.
While value-added raw materials processing offers significant revenue potential, the investment costs can be substantial. Additionally, different production routes can give different materials emission intensities, which play a role in shaping the overall sustainability profile of batteries. Therefore, advancements in materials processing and refining technologies will be critical in reducing costs, maximizing profit margins, and improving the sustainability of raw materials. The growing emphasis on battery materials processing has been recognized by upstream players and OEMs. For example, the adoption of electrolysis and electrodialysis for lithium refining is increasing, offering a more direct and efficient route to battery-grade chemicals. Some natural graphite producers are moving away from hydrofluoric acid purification due to environmental concerns.
IDTechEx’s recent report “Critical Battery Materials 2025-2035: Technologies, Players, Markets and Forecasts” examines various production routes for battery raw materials and their impacts on material emission intensities. The analyses consider feedstock types, materials extraction and processing technologies for lithium, nickel, copper, cobalt and natural graphite. The report also provides 10-year forecasts on critical raw materials demand from lithium-ion batteries and their global supply outlooks from mining. The report also explores deep-sea mining as a potential future mineral source, highlighting key players and their activities along the marine mineral value chain.
