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

EnergyX’s ten-year, $2 billion take-or-pay agreement to supply Trafigura with 100,000 tonnes of lithium from Chile and the United States matters less for its size than for what it signals. A commodities trader is backing direct lithium extraction (DLE), a technology still proving itself commercially, and the demand behind it is increasingly stationary storage rather than electric vehicles. Take-or-pay terms oblige the buyer to pay whether or not it collects the metal. That gives developers the revenue certainty lenders want, which is why the deal also supports EnergyX’s export-credit application.

For years, EVs set lithium’s cycle. Now grid batteries are offsetting uneven vehicle sales. Orient Securities projects 2026 storage demand of roughly 570,000 tonnes of lithium carbonate equivalent, about 55% higher year on year. Chemistry magnifies the effect: lithium iron phosphate (LFP) typically needs 30–50% more lithium per kWh than nickel-rich systems, because lower energy density means more cells for the same duty. Prices reflect the tightening. Fastmarkets expects an average of about $23,800 per tonne in 2026, above the roughly $20,000 that underpins the EnergyX contract. For manufacturers, demand driven by multi-year utility projects is steadier than consumer sentiment, but cheap lithium can no longer be assumed.

DLE draws lithium from brine using filters or sorbents instead of evaporation ponds, promising faster, smaller-footprint production. Industry reporting describes it entering commercial-scale production, and Benchmark has estimated it could supply a meaningful share of global output by the early 2030s if the project pipeline delivers on schedule. Delivery risk is real. EnergyX does not plan production until 2028 in Chile and 2029 in Texas, still needs funding for both plants, and awaits a decision on a $690 million Export-Import Bank loan. Its system combines known filtration technologies using readily available equipment, which eases engineering risk, but performance at commercial scale remains unproven. Peers are similarly early: LibertyStream aims to commission its first commercial-scale plant by the end of December 2026, while Empower EIT is targeting first commercial sales in 2027. Buyers should treat DLE volumes as valuable optionality before 2028, not dependable base supply.

Lithium chemicals are only one constraint. The US is rebuilding storage-cell manufacturing, with LG Energy Solution and Samsung converting EV lines to LFP. LG aims to exceed 50 GWh of LFP storage capacity across five North American sites by the end of 2026, yet China still supplied 66.5% of US battery imports in the second quarter, down from 77% a year earlier. Tariffs on Chinese non-EV lithium-ion batteries were due to rise from 7.5% to 25% in January 2026, but Benchmark forecasts US demand for LFP storage cells will outstrip North American production until 2028. There is an irony in the EnergyX deal: Trafigura intends to sell initially to Chinese customers, because that is where processing and cell capacity sits.