How Do Lithium Feasibility Study Price Assumptions Compare to Market Prices?

Lithium feasibility study price assumptions show extreme divergence from volatile spot market prices, with analysis of 180 studies revealing that average 2025 assumptions are more than double the spot price. This gap, driven by anchoring to past highs and forward-looking incentive pricing, creates significant valuation risk for mining projects, a stark contrast to the more stable assumptions seen in copper and gold studies.

Why Is the Gap Between Study and Spot Prices a Critical Risk Now?

The gap between study assumptions and spot prices is a critical risk now because the lithium market has moved from an unprecedented price spike in 2022 to a subsequent collapse, leaving recent feasibility studies with embedded price assumptions that are now more than 100% above current spot prices. This extreme optimism, occurring within a timeframe shorter than a typical mine construction period, means project economics published during the 2022-23 peak are now fundamentally misaligned with the current market, requiring significant adjustments to valuation.

What Are the Key Insights on Lithium Price Assumptions?

Key insights from an analysis of 180 lithium mine feasibility studies highlight the growing disconnect between project economics and market reality.

• Extreme Volatility: Lithium study price assumptions have been highly volatile, reaching a premium of 105% above the spot price in 2025, the largest divergence among the commodities analyzed in this series.
• Anchoring Bias: Price assumptions set during high-price periods, a phenomenon known as anchoring, become stranded when the spot price corrects faster than project development cycles can adjust, as seen in the 2019-20 and 2024-25 periods.
• Unprecedented Swings: The volatility in lithium assumptions is far greater than in gold or copper, swinging from a 63% discount to spot in 2022 to a 105% premium in 2025, a 168-percentage-point swing in three years.
• Valuation Adjustments Needed: Investors should re-run project net present values using current spot prices as the primary anchor and treat published study assumptions as an optimistic scenario rather than a central one.
• Dual Drivers: The premium in 2025 assumptions is likely a blend of behavioral anchoring and a defensible market view on the long-run incentive price needed to bring new supply to market.

This is the third and final article in a series examining base case commodity price assumptions in mining feasibility studies versus prevailing spot prices. Part one covered copper, while part two covered gold. The lithium analysis draws on 180 base case price assumptions from studies published between 2011 and 2026. These have been normalized on a lithium carbonate-equivalent basis and benchmarked against an average global CIF lithium carbonate price. Of the three commodities, it presents the most volatile and complex picture, one where the relationship between assumptions and spot prices has swung dramatically in both directions within a decade.

➤ The assumed price in studies has been more volatile and has reached 105% above the spot price, the largest premium in all the commodities in this series.

➤ Anchored assumptions set during high-price periods get stranded when the lithium spot price moves faster than any through-the-cycle framework can absorb.

➤ Average 2025 study assumptions sit at more than double the current spot price, requiring significant adjustment before treating published economics as a guide to value.

What is the composition of the analyzed studies?

Of the 180 lithium studies in the dataset, 80 (44.4%) are preliminary economic assessments, 36 (20.0%) are prefeasibility studies, 60 (33.3%) are full feasibility studies and just four (2.2%) are mine plans. The high proportion of full feasibility studies in this analysis compared to our copper analysis reflects the wave of advanced-stage lithium project development that occurred between 2017 and 2023, as the battery supply chain race intensified. The small absolute sample size — one to three available studies per year, particularly in the early years — indicates that year-over-year comparisons should be treated with caution. This is because the assumptions of a single large project can materially influence individual year averages.

Feasibility study price assumptions are often set months before publication, meaning published studies can lag turning points in the spot market, and because spot prices are measured using annual averages, some publication-date timing effects are unavoidable, especially in years of rapid price movement. That noted, the dataset tells a compelling story about how hard it can be determine suitable feasibility study prices for a commodity as volatile as lithium.

How did study assumptions behave before the first price surge between 2011-2015?

In the early years of the dataset, lithium was still a stable industrial commodity, with lithium carbonate prices ranging between $4,755 per metric ton and $5,899/mt. The few studies from this period — three in 2011, one each in 2012 through 2015 — used assumptions that ran modestly above spot prices, ranging 7%-55% higher. The directional bias toward optimism was consistent with companies already anticipating the structural demand shift from electric vehicles and energy storage, pricing projects to reflect expected long-run equilibrium, rather than a spot price widely viewed as temporarily depressed.

What happened to assumptions during the first rally between 2016-20 and the correction?

The lithium price surge of 2016-18, driven by rapidly growing EV battery demand and constrained hard rock supply, pushed the spot price to $15,861/mt by 2018. Study assumptions during this period lagged 13%-19%, a moderate level of caution similar to gold's behavior during its bull market, though the sample remains thin relative to the gold and copper datasets. What distinguishes lithium from copper and gold is what happened next. When the spot price fell sharply from its 2018 peak, reaching $10,651/mt in 2019 and collapsing to $6,935/mt in 2020, study assumptions did not follow. Studies in 2019 averaged $14,240/mt (34% above spot) and $12,383/mt in 2020 (79% above spot). This is much larger than any divergence in the copper or gold datasets. This can be explained by anchoring: Companies that had initiated projects during the high-price period were publishing studies with assumptions set before the correction and were apparently unwilling — or unable, given the project cycle — to write down assumptions to reflect a spot price that had more than halved. As the spot price began recovering from its 2020 trough, the anchoring bias persisted: 2021 studies averaged $16,868/mt against a spot average of $13,665/mt, a 23% premium that reflected continued optimism as the market began its next ascent.

How did assumptions react to the extreme price spike in 2022 and subsequent correction between 2024-25?

The 2022 lithium price spike, where lithium carbonate averaged $57,557/mt — nearly four times the 2021 level — produced the largest single-year change in any of the three commodities analyzed. Study assumptions of $21,508/mt represented a 63% discount to spot. The conservatism was rational: No company could credibly embed $57,000/mt into a long-life mine model. But by 2023, as the spot price fell to $38,338/mt, assumptions had risen to $28,511/mt. This was still a 26% discount, reflecting appropriate caution about whether elevated prices were sustainable. The subsequent collapse in lithium prices — $12,385/mt in 2024 and $10,059/mt in 2025 — has created the most extreme optimism in the dataset. Studies published in 2024 used average assumptions of $23,993/mt, 94% above prevailing spot. By 2025, the premium had widened to 105%, with assumptions of $20,594/mt sitting at more than double a spot price of $10,059/mt. Full feasibility studies in this period, where data coverage is better, show a similar pattern. Project economics that looked viable during the 2022-23 high-price environment are now being published into a market that has fundamentally repriced the commodity.

Before attributing the 2025 premium entirely to anchoring, another interpretation deserves consideration: incentive pricing. At $10,059/mt, spot sits below the marginal cost of much of the new supply that consensus demand forecasts require by the early 2030s, particularly higher-cost hard-rock, lepidolite and emerging African production. A base case near $20,000/mt may therefore reflect not only backward-looking inertia but also a forward-looking judgment about the long-run price needed to clear the market and incentivize capacity. For a study modeling a 15-to-20-year mine life, anchoring entirely to a transient supply-driven trough could be less rational than using a higher long-run price.

The distinction matters. Anchoring is a behavioral error; incentive pricing is a defensible market view. In practice, the 2025 premium is likely a blend of both, and the two are difficult to separate empirically. Crucially, however, neither interpretation removes the timing risk. Even if $20,000/mt proves to be the correct long-run incentive price, projects earn market prices, not long-run averages, during their early operating years.

If oversupply persists through construction and into ramp-up, the impact on net present value can be severe, regardless of where prices eventually settle. This risk is increased by the speed of lithium's supply response. As there are many projects but few producing mines — and because lithium mines can be built or ramped up faster than gold or copper operations — the reaction to a price rally is unusually rapid. Therefore the elevated prices needed to incentivize new projects tend to trigger oversupply.

A tentative cross-section by deposit type suggests brine and clay-hosted projects adopted higher base-case assumptions than traditional pegmatite hard-rock projects. This partly reflects timing — brine and clay studies cluster in the more recent, higher-assumption period — but the priced sample by geology is too small to isolate a pure geological effect with confidence.

How does lithium's price assumption volatility compare to gold and copper?

Comparing lithium to the other two commodities in this series reveals a fundamental difference. Gold and copper assumptions are conservative during bull markets and converge toward spot during stable or declining periods — a pattern that reflects a market where long-run price expectations are well-anchored. Lithium assumptions oscillated more wildly, and with far greater amplitude, to 105% above spot in 2025 from 63% below spot in 2022, a 168-percentage-point swing within three years. By comparison, gold's largest gap was a 27% discount at the 2011 bull-market peak, while copper's widest conservative-to-optimistic reversal — to a 31% premium in 2016 from a 52% discount in 2006 — spanned a decade. Lithium covered a larger range in three years than copper did in 10 years. This is not a failure of industry discipline so much as a reflection of a commodity that moves faster, further and less predictably than any conventional through-the-cycle pricing framework can absorb. For investors, the practical implication is that the gap between study assumption and spot price in lithium can be a source of significant upside as in 2022 and significant downside risk as in 2024-25 within a timescale shorter than the construction period of the projects being assessed.

The 2011-15 experience offers an important counterpoint. Companies that priced above spot in that period anticipated a structural demand shift that had not yet been priced into the market, and thus were vindicated. The current situation is different in a critical respect. The EV demand thesis has already played out in market prices, producing the 2022 spike and the subsequent correction to current spot levels. The 105% premium in the 2025 study assumptions, therefore, does not anticipate an unpriced structural shift; it resists a spot price that has already incorporated it.

Treating lithium feasibility study economics as a reliable guide to project value at prevailing market prices requires far greater adjustment for the assumption than is typically applied in copper or gold analysis. In practice, this means two things. First, one should rerun project net present values at current spot and not the study's base case as the primary valuation anchor and treat the published assumption as an optimistic scenario rather than a central one. Second, one should apply a materially wider price sensitivity band than is standard for copper or gold, spanning at least from the current spot price to the study base case. This would then capture the range of outcomes the dataset has shown as being plausible within a single construction cycle.

How Does S&P Capital IQ Pro Support Lithium Project Analysis?

S&P Capital IQ Pro provides the essential lithium mining asset-level data and tools to help navigate the commodity price volatility and valuation risks highlighted in this analysis. The Metals and Mining solution offers access to the comprehensive dataset of feasibility studies, historical and forecast commodity prices, and asset-level cost data used in this research. This enables users to address the article's core recommendation by benchmarking the assumptions in published studies against real-time spot prices and consensus forecasts. With these tools, our users can rerun project net present values at current spot and to accurately assess project viability in the fast-moving lithium market.

Key Questions on Lithium Price Assumption Volatility

What drives the large premium in recent lithium study price assumptions?

The large premium is driven by a combination of behavioral anchoring and strategic incentive pricing. Anchoring occurs when companies, having initiated projects during high-price periods like 2022-23, publish studies with price assumptions set before a market correction. Incentive pricing reflects a forward-looking view that a higher price, such as one near $20,000/mt, is necessary to incentivize the new supply required to meet long-term demand, even if the current spot price is significantly lower.

How should investors adjust their valuation of lithium projects?

Investors should adjust their valuation by using the current spot price as the primary valuation anchor for a project's net present value, rather than relying on the study's published base case. The article recommends treating the published assumption as an optimistic scenario. Furthermore, a materially wider price sensitivity band—spanning from the current spot price to the study's base case—should be applied to capture the full range of plausible outcomes within a project's construction cycle.

Why is lithium more volatile than gold or copper in this context?

Lithium's price assumption volatility is greater than that of gold or copper because it is a less mature market that moves faster and less predictably than conventional pricing frameworks can absorb. Key factors include a rapid supply response where new projects can be built faster than gold or copper mines, leading to cycles of oversupply. Additionally, long-run price expectations are less anchored, and the market has recently experienced a massive structural shift driven by EV demand that has already played out in prices, leading to extreme swings.