Future lithium supply problems

Future lithium supply problems take center stage at Geological Society conference in London

By MARTIM FACADA
Published: Wednesday, 11 April 2018
Print | Email | Comment |
Share

• Tweet​
• in​

  Share​

  ​

  ​

Lithium supplies will not increase as smoothly as predicted by a recent report produced by Morgan Stanley and any existing surplus will be absorbed by growing demand from existing users, keynote speakers told delegates at the Geological Society Lithium Conference, held in London on April 9-10.
Alison Dai, business development director at Chengdu Chemphys Industry Co, and Cornish Lithium’s founder and chief executive officer, Jeremy Wrathall, told delegates that lithium supplies from legacy and new projects would not arrive on the market as smoothly as anticipated in the Morgan Stanley report, The long-term pain of new supply, which was published on February 26.
The keynote speakers said that any lithium supply surplus would be absorbed by growth in demand from existing users.
Demand from the boom in new energy vehicles (NEVs) will absorb any increase in lithium supplies over the next few years, Dai said.
Chengdu Chemphys Industry Co, claims to be the first producer in China of lithium carbonate battery grade (min 99.5% Li2CO3) and lithium carbonate electronic grade (min 99.99% Li2CO3).
"Lithium mining projects normally reach the market late due to lack of funding and the difficulties to reach the nameplate capacity targets," Dai said. "Meanwhile, the production of stable lithium carbonate or lithium hydroxide battery grade products can take up to one year, optimistically speaking, but in some cases several years."
The lack of lithium spodumene conversion capacity in China is another constraint to the addition of lithium to the global market, Dai said - only one spodumene convertor has been delivered in the recent months in China and these convertors typically face technical issues while adapting to the different types and grades of lithium spodumene.
Industrial Minerals price assessment for lithium spodumene (min 5-6% Li2O), cif China was $900-950 per tonne on 28 March, up from $870-950 per tonne on February 28.
"There [will] be a mild excess of supply in the coming years," Dai added, "but this will be absorbed by existing demand from NEV manufacturers, [accounting for] for 70% of total global lithium demand by 2025, up from 45% in 2017," Dai added.
Although the Morgan Stanley Report suggests that oversupply could push prices to $7 per kg by 2025, Dai said that would be unrealistically low compared with her own company’s forecasts and market information.

	Column 1
0	Alison Dai speaking at the lithium conference ( Source: Industrial Minerals)

Industrial Minerals’ average spot price assessment for battery-grade lithium carbonate (min 99.5% Li2CO3) was assessed at 147,500 yuan ($23,403)* per tonne on April 5, with the average spot prices for lithium carbonate technical and industrial grades (min 99% Li2CO3), ex-works domestic China, at 142,500 yuan per tonne.
The lithium market is still in its infancy compared with other metal industries such as copper, which have been mined for at least 4,000 years, Wrathall said.
He said that lithium should not be regarded as a commodity, like copper, as it is more of an industrial chemical, and said there was currently no price benchmark in use across the industry.
"Most of the current lithium production comes from legacy assets [traditional lithium producers operating for the past 20 years], for which capital has already been paid back," Wrathall said "[so] if all existing car manufacturers changed their production from internal combustion engines vehicles to NEVs, lithium demand would increase by 3,000%, [and that] would be a concern, given the fact it is a hard and long process to bring on new lithium mines," Wrathall said.
"Supply won’t come as smoothly as many expect, while demand will remain strong and is anticipated to increase further," he added.

Lithium brine mining projects can take up to 10 years, if not longer, to come on line, while lithium hard rock mines can take more than six years to be developed. Even then, at least a year could pass before the new lithium carbonate and lithium hydroxide production reaches the minimum levels to be accepted and be qualified by a battery maker as battery-grade material, Wrathall said.

Both speakers agreed that government policies, including subsidies and CO2-emissions reduction targets were the two main drivers of lithium production and NEV adoption, and these two factors will keep the lithium supply chain under pressure due to the need for additional lithium compounds.
Dai added that lower battery production costs were essential for the development of the NEV industry, along with improved driving ranges, an increase in vehicle charging infrastructure.

not all can read this article online as you need to register
but it can be found here
http://www.indmin.com/Article/37999...-Geological-Society-conference-in-London.html