There is a fixed cost to extract a kilogram of lithium using a given method. When demand spikes, lithium suppliers will charge more and reinvest those profits into increasing mining capacity. If they had their way, they’d keep prices high, but anyone can open a lithium mine. Lithium is not hard to find. Those people will undercut the previous miner in order to attract buyers, which will force all miners to lower prices back to reality.
As long as prices are high, more and more mines will open as it is suddenly an attractive resource to mine. This will happen until prices start to drop to some percentage-over-cost where things stop being attractive, and the market reaches equilibrium again.
If lithium was profitable to mine for $X/kg for many years, then that is the price it will naturally return to. It is a commodity. There is no special value for getting your lithium from Corporation X or Corporation Y. The only value is the material.
That’s how commodities work. The price is determined by how hard it is to extract, and whether demand has recently spiked (or subsided). Gold is expensive because it
If this were some rare substance, extraction difficulty would increase noticeably with time, but we’re a long way from a shortage of ways to mine lithium. Some ways might be more expensive, so those mines will only open if the prices stay high, but the prices won’t rise indefinitely this century. That is such an illogical assumption. Perhaps the natural price of high volume lithium production is higher than we have today because those more expensive methods are convenient, but it won’t be enough of a price increase to matter in the grand scheme of things, and this assumption of a higher price is a pretty flimsy one to base predictions on even then.
Eventually, as batteries age, they will be recycled, and the need for lithium mining will likely drop sharply, bankrupting some of these mines until production and (profitable) demand are matched again.