Elevra Lithium MD Lucas Dow says conditions in the physical lithium market have strengthened materially in recent months, with spot spodumene concentrate prices climbing above $1 200/t as tightening supply spills into pricing.

The company, formed through the merger of Piedmont Lithium and Sayona Mining, says consensus is pointing to the market moving into a deficit in 2026, with supply growth continuing to lag robust demand expansion.

In his presentation to the company's AGM on Friday, Dow highlighted that the stronger pricing environment reflected several converging trends. Electric vehicle sales remain resilient, rising 23% year-on-year to October, while demand for energy storage systems continues to accelerate on the back of rapid installation growth, improving economics and policy support.

Against this backdrop, he noted that a period of underinvestment during the recent downcycle had slowed new supply additions, leaving the market more sensitive to disruptions and causing a pronounced tightening in available material.

The company’s presentation suggests that sustained demand growth across both mobility and stationary storage is likely to outpace new project development through the medium term, reinforcing expectations of firmer pricing into 2026.

To capitalise on the improving market backdrop, Elevra is progressing a brownfield expansion at its North American Lithium (NAL) operation, in Canada. The expansion is designed to increase production from the current 2026 guidance of 195 000 t/y to 210 000 t/y to about 315 000 t/y, while reducing unit costs from a forecast $765/t to $830/t down to about $562/t.

The permitting phase is expected to begin in the 2026 financial year, with construction anticipated around the second quarter of 2028. Commissioning is targeted for late 2029. Elevra considers the expansion key to strengthening NAL’s competitiveness as market conditions tighten.

Elevra has also materially expanded the resource and reserve inventory at NAL, with mineral resources rising 8% to 95-million tonnes at 1.15% lithium oxide, and reserves more than doubling to 49-million tonnes at 1.11% lithium oxide. The updated estimates support the potential for both extended mine life and future production increases.

A similar increase has occurred at Moblan, where total resources have grown 30% to 121-million tonnes at 1.19%, with about 89% of the tonnage now classified as measured and indicated. Reserves have risen to 48.1-million tonnes at 1.31%. The resource has increased more than sixfold since Elevra acquired the project in 2021, supported by infill drilling that continues to show shallow, consistent mineralisation.