As the mining and resources industry winds down for the year and the holiday season settles in, Mining.com.au unwraps its 12-day macro series, with each day revealing a new facet of the forces shaping the sector.
Much like the classic carol, each day builds on the last. On the second day of Christmas, the focus turns to two critical commodities: lithium and nickel. Or as referred in the carol, two turtle doves.
The metals, not just stocking stuffers for investors, are considered key inputs for electrification. From batteries to future facing supply chains – both metals have experienced a volatile yet defining year.
BESS star on the tree
Lithium continues seeking to be a star on the Christmas tree, as Venari Minerals (ASX:VMS) CEO Matt Healy says “there is no commodity that has the demand trajectory that lithium has”.
“This is underpinned by lithium having the greatest electrochemical potential for its weight; there is simply no substitute,” Healy tells Mining.com.au.
The Reserve Bank of Australia reports lithium demand is expected to grow at an average compound annual growth rate (CAGR) of around 14% by 2030.
Particularly from China, lithium demand is accelerating where new EV output rose 20.3% year-on-year in September 2025 – representing the strongest growth so far this year, as Patagonia Lithium (ASX:PL3) Executive Chairman Phil Thomas tells this news service.
As of mid-2025, China had over 101.3 gigawatts of battery energy storage systems (BESS) installed, primarily lithium-ion based, across thousands of projects nationwide. Meanwhile, the US has over 30 gigawatts of installed BESS capacity, as of March 2025.
Thomas says as the BESS trend continues, the lithium carbonate market has been showing signs of recovery during late 2025.
“Prices are rebounding due to renewed demand from China’s electric vehicle and energy storage sectors, though volatility remains,” he says.
The global lithium carbonate market is projected to reach US$4.17 billion in 2025, which is expected to grow through 2035. The market for lithium hydroxide is also forecast to grow at a CAGR of 23.51% from 2024 to 2029, reaching some 564.78 kilotons of lithium carbonate equivalent (LCE) by 2029.
Meanwhile, the broader market is forecast to expand from US$22.48 billion in 2025 to US$155.7 billion by 2035 at a CAGR of 19.23%.
Trading Economics reports lithium carbonate futures were over CNY 83,000 per tonne mid-November 2025, marking the highest since the one-year high of CNY 85,680 in August.
Recently, lithium carbonate futures rose to CNY $80,000 per tonne, marking a two-month high. This spike is driven by China’s renewed support for EVs and energy storage, including plans to double EV charging capacity to 180 gigawatt by 2027.
“Despite this rebound, prices are still well below their 2022 peak which was triggered by oversupply and speculative unwinding,” Thomas says.
According to Trading Economics, lithium prices have risen 21.23% over the past month and 18.07% compared to the same time last year. At the time of writing, lithium carbonate futures sat at ¥92,800 per tonne
Companies lighting up
While price volatility remains part of the equation, broader sentiment within the market has begun to thaw – similar to the Jack Frost melting at the end of the 1998 Christmas movie to return to his human form and be with his family.
Q2 Metals (TSX-V:QTWO) Corporate Development Chris Ackerman says the market tone has noticeably shifted.
“Lithium price appears to have rebounded and, anecdotally, more positive reports and studies seem to be in the public domain on a weekly basis,” Ackerman tells Mining.com.au.
“It is early yet to get overly enthusiastic but there are certainly reasons for optimism. Beyond the basic supply/demand picture which appears to be very favourable at least in the medium- to long-term, it is abundantly clear that governments, including Canada’s, are focused ever more on securing critical minerals supply chains.
“Lithium is highly vulnerable to disruption given China’s global dominance, so exceptional projects like Cisco take on even greater importance”
The company’s Cisco Lithium Project in Québec, Canada, reflects the kind of strategic opportunities now getting renewed. As previously reported, Q2 Metals is working towards a preliminary economic assessment for the project, amid awaiting more than 20 assay results from an ongoing drilling program.
“Cisco in particular, is distinguished for its exceptional scale and grade as well as,
importantly, its proximity to infrastructure,” Ackerman adds.
Patagonia Lithium on the other hand, is about three years away from production at its Argentinian assets. The company has a strategic target of 10,000 tonnes per year of battery-grade lithium carbonate, so its sales are anticipated to coincide with a deficit in the lithium carbonate market estimated to be between 2029 and 2030.
Thomas notes the company says the relationship between Argentina and the US to help Patagonia sell into the US which is geographically closer than other markets.
“Our Formentera Project hosts a number of strategic and specific key advantages – our specific yields are exceptionally high, our grades are very good, and our infrastructure is excellent,” he says.
Meanwhile Venari Minerals is all-in on advancing its Red Mountain Lithium Project in Nevada, with the anticipated release of a maiden resource estimate in the next few weeks.
“The US is heavily import dependent for lithium and the Red Mountain Project is well positioned as a high-grade lithium clay project to be able to assist in easing this import dependence,” Healy says.
Nevada has unique geology that has allowed for lithium-rich clays to accumulate in some of its valley basins. Healy explains that the Red Mountain Project formed in this environment, but was shunted upwards by faulting.
“The consequence of this is that it has lithium bearing rocks right at the surface, with high-grade mineralisation that could be mined from day one of an operation,” he explains.
Nickel markets about to sleigh
If lithium’s story has been one of harsh corrections and gradual recovery, nickel’s journey has been about endurance during 2025 – much like Rudolph the red-nosed reindeer leading Santa’s sleigh through difficult weather.
After a turbulent period driven by Indonesia’s supply floods and forced shutdowns globally, the global nickel market appears to have stabilised later this year.
In April 2025, nickel futures hit the lowest price in four years to around US$14,150 per tonne, as reported by Trading Economics. At the time of writing, nickel futures sat at US$14,676 a tonne.
Despite prices stabilising, Nasdaq reports that the issue facing the nickel market is not weak demand, but that consumption is rising at a solid rate.
Across all warehouses, the London Metal Exchange (LME) hosted 164,028 million tonnes of nickel at the beginning of 2025, by the end of H1 2025, the amount had risen to 203,886 million tonnes, according to Nasdaq.
Recent data shows that the upward trend continued to rise through Q3 2025, with LME nickel stockpiles reaching 231,504 million tonnes on 30 September.
According to Western Mines Group (ASX:WMG) Managing Director Caedmon Marriott, nickel’s long-term fundamentals remain strong, growing at more than 6% per year.
“Majority of this is in stainless steel, which is a function of global gross domestic product growth, particularly driven by China,” Marriott explains to this news service.
“The nickel market has regained composure, or at least has got comfortable with where it’s at. Whereas there was some hysteria at the beginning of the year regarding price declines and mine closures, we have now been bumping along at US$15,000 per tonne for the last 12 months at least.
“We’re deep into the cost curve and there is a realisation that things probably can’t go lower or get worse.”
Beyond EVs, nickel demand is finding new pathways, including through the boom in artificial intelligence data centres.
As Mining.com.au reported, of those using AI, the most common applications are to enhance productivity (55%) and generate insights (40%), while 30% of respondents are not using AI at all. More than two thirds (64%) indicate they see significant room for improvement in the way their organisation uses data.
Nickel’s nutcrackers
SPC Nickel (TSX-V:SPC) CEO Grant Mourre says one of the biggest challenges confronting the nickel market recently is supply certainty, particularly from Indonesia.
“China’s recent willingness to restrict rare earth shipments revealed the need to develop alternative sources for these minerals,” Mourre says.
“The same may be said for the nickel supply chain where China controls much of Indonesia production. That realisation, along with longer term demand growth, may help drive a greater emphasis on developing local sources of production and processing to insure against bottleneck of supply in any future confrontation.”
Mourre adds that these challenges posed by tensions with countries such as China and Russia, increasingly positions Canada’s mineral endowment in a favourable light.
“SPC is well situated within this because both of our core assets – Muskox and Lockerby East – are in tier one jurisdictions and both offer compelling upside,” he says.
“Muskox represents a unique opportunity to develop one of the last great copper-nickel projects globally while Lockerby East sits in the middle of one of the world’s great mining camps with access to established mining and processing infrastructure.”
Muskox is a 125km-long magmatic system with geological similarities to Norilsk, Voisey’s Bay, and Sudbury. It hosts copper-nickel-platinum group metals mineralisation at surface and remains vastly under-explored.
Lockerby East lies in the heart of Sudbury Basin – a premier nickel camp. The project hosts a resource of 22 million tonnes at the West Graham target and the company is currently drilling high electromagnetic conductors at the LKE target.
As the energy transition accelerates, lithium and nickel continue to act as the gift that keeps giving. While pricing cycles and oversupply concerns may come and go, the long-term demand story for both metals remains intact, shaped by EV growth, decarbonisation, and national priorities.
On the second day of Christmas, it’s clear that these two critical commodities are not just filling the stockings.
Write to Aaliyah Rogan at Mining.com.au
Images: Mining.com.au, Patagonia Lithium, Q2 Metals, Western Mines Group, & Unsplash
