The head of the world's biggest lithium producer says global demand will not be enough to justify new mines until the second half of the decade.

For that reason, Talison Lithium chief executive Peter Oliver said the company, in the midst of expanding its Greenbushes mine south of Perth, would not run at full capacity once the expansion was completed in the first quarter of next year.

He said he believed that many new lithium projects proposed worldwide would require higher prices than the market was demonstrating to be viable. That included Talison's Salares project in Chile, which it acquired through its takeover of Toronto-listed Salares Lithium.

Lithium has long been used in consumer electronics but in the past couple of years it has attracted investor interest because lithium ion batteries power many electric and hybrid cars.

Talison is doubling production capacity at Greenbushes to 740,0000 tonnes a year of lithium concentrate, or 110,000tpa lithium carbonate equivalent. It is also investigating building a chemical plant in Australia to produce battery-grade lithium.

Elsewhere in WA, Galaxy Resources produces lithium from its Mt Cattlin project near Ravensthorpe, while Reed Resources and Mineral Resources are jointly developing the Mt Marion lithium project, 40km south-west of Kalgoorlie-Boulder.