From Mine to Market: How Mineral Prices Affect the Cost of Living
Every time you fill up the car, buy a new phone, or even pay your electricity bill, you’re feeling the effects of something most of us never see: the price of raw materials.
From lithium for electric vehicle batteries to iron ore for building infrastructure, minerals are at the start of almost every supply chain. And when their prices change, the effects ripple outwards, through industries, across countries, and right into our everyday budgets.
The Basics: Supply and Demand in the Minerals Market
Just like any product, mineral prices are largely driven by supply and demand:
High demand + limited supply = prices rise.
Low demand + oversupply = prices fall.
But here’s where minerals differ from, say, groceries: it takes years (sometimes decades) to bring a new mine into production. That means supply can’t always respond quickly to sudden spikes in demand, so prices can swing sharply.
From the Ground to Your Driveway
Let’s take lithium as an example:
Mining: Lithium is extracted from hard rock deposits in Western Australia or from brines in South America.
Processing: It’s refined into battery-grade lithium carbonate or hydroxide.
Manufacturing: That lithium is combined with other materials to make rechargeable batteries.
End Products: These batteries power electric vehicles (EVs), buses, and renewable energy storage systems.
If lithium prices double due to a supply shortage, battery manufacturers face higher costs. This can make EVs more expensive for consumers and slow down the rate at which people and businesses transition away from petrol and diesel vehicles. In turn, that affects how quickly we can cut transport-related emissions—a key step in reaching net-zero targets.
Minerals and Inflation
When multiple key minerals—like lithium, nickel, and aluminium—rise in price at the same time, we often see those increases reflected in the Consumer Price Index (CPI), a key measure of inflation. This is especially true for goods that are energy-intensive to produce or rely on complex supply chains.
High mineral prices can:
Increase manufacturing costs.
Push up the price of finished goods.
Lead to higher transport and construction costs.
A Real-World Classroom Example
Imagine we’re looking at lithium:
In 2021–2022, prices skyrocketed due to EV battery demand.
New mines couldn’t open fast enough to meet this demand.
Battery manufacturers paid more for materials, pushing up EV prices.
Even bus fleets and energy storage projects slowed down because costs rose so quickly.
By showing this cause-and-effect chain, students can see how a mineral dug up in WA can influence the cost of a car in Melbourne, or even an energy bill in Geelong.
Why This Matters for Students
Understanding mineral markets isn’t just for economists—it’s part of becoming an informed citizen. It connects geography (where resources come from) with economics (how markets work) and real-world decision-making (how businesses and governments respond to price changes).
This is exactly the kind of content that aligns with:
Economics & Business: resource allocation, market forces, and financial decision-making.
Geography: global interconnections, trade flows, and spatial distribution of resources.
Interested in making this real for your students?
Our Mine to Mind school sessions let students explore the full journey of a resource, from mine to market, through hands-on samples, real industry data, and interactive activities.
