Rio Tinto (ASX, LON, NYSE: RIO) greenlighted in July its $2.4 billion Jadar lithium project in Serbia. The world’s second-largest miner stated on the time that by 2030 EV makers will want about three million tonnes of lithium, in contrast with the roughly 350,000 tonnes they eat at present.
Present operations and initiatives mixed, nonetheless, are slated to contribute a million tonnes of lithium.
Filling that provide hole, Rio Tinto said, would require greater than 60 Jadar initiatives. The proposed mine is slated to supply 58,000 tonnes of lithium carbonate, 160,000 tonnes of boric acid and 255,000 tonnes of sodium sulphate a 12 months at full tilt.
However the firm is dealing with fierce opposition to the challenge. In early December, native opponents organized a motion that has rocked the federal government and introduced cities to a standstill as thousands of protesters marched in the streets. Authorities subsequently suspended a land-use plan for the proposed mine, although they didn’t reject the challenge utterly.
Rio stated on Dec. 23 it plans to pause its Jadar lithium project after a municipality within the nation scrapped a plan to allocate land for the mine, throughout which it should interact in a public dialogue in regards to the challenge.
#2 Chinese language offensive
Regardless that China’s lithium reserves rank because the world’s fourth-largest, the battery steel is principally discovered within the salt lakes round Tibet and Qinghai, a sparsely populated Chinese language province unfold throughout the high-altitude Tibetan plateau. That makes it tough to refine and transport, and partly explains why Beijing regarded elsewhere this 12 months.
Ganfeng Lithium, one of many world’s prime producers, bid for a stake in Canada’s Millennial Lithium in July, whereas battery making big CATL, led by billionaire Zeng Yuqun, joined the race a few months later, trumping Ganfeng. Ultimately, it was a 3rd firm, Lithium Americas, that emerged victorious.
The corporate additionally acquired Mexico-focused explorer and developer Bacanora Lithium (LON: BCN) this 12 months, including the Sonora challenge to its rising portfolio.
Ganfeng didn’t cease there and purchased in September Worldwide Lithium, which was its partner in the Mariana project in Argentina, one of many greatest deposits globally.
Representatives of 5 Chinese language firms obtained particular visas and travelled to Afghanistan in early November to conduct on-site inspections of potential lithium initiatives.
Zijin Mining additionally grabbed headlines, particularly with the acquisition of Canada’s Neo Lithium Corp in October.
#3 Aussie M&As
One of many greatest tales of the 12 months within the lithium market got here in April, with Australian lithium miners Galaxy Sources (ASX: GXY) and Orocobre (ASX: ORE) asserting their merger. The enterprise mixture created a $3.1 billion (A$4bn) firm, set to be the world’s fifth-largest producer of lithium chemical substances.
A three way partnership between Tianqi Lithium and IGO Ltd additionally grabbed headlines as they produced Australia’s first batch of lithium hydroxide, used to make cathodes for lithium-ion batteries that energy electrical automobiles. As soon as in full manufacturing, Kwinana would be the largest lithium hydroxide-producing operation and the most important spodumene converter on the planet.
Piedmont Lithium (ASX: PLL) and its 19%-owned Sayona Mining (ASX: SYA) completed the acquisition of Canada’s North American Lithium (NAL), as a part of their plan to create a potential lithium manufacturing hub within the Abitibi area of Quebec.
Weeks later, they bought another Canadian project: Moblan challenge within the Eeyou-Istchee James Bay area of northern Quebec.
Liontown Sources (ASX: LTR) confirmed plans in November to convey its Kathleen Valley exhausting rock challenge in Western Australia into manufacturing, a 12 months sooner than initially focused because it launched a definitive feasibility examine.
Pilbara Minerals (ASX: PLS), considered one of Australia’s prime lithium miners, closed the 12 months by slashing its forecast for shipments attributable to a raft of points — from delays in commissioning and ramping up extra processing capability, to unplanned shutdowns and expert employee shortages.
#4 Chile combating again
Chile, which misplaced the crown because the world’s largest lithium producer to Australia in 2018, started staging a comeback. It opened in October a tender for the exploration and manufacturing of 400,000 tonnes of lithium.
In solely a few weeks, 57 companies confirmed curiosity in new contracts, in accordance with official figures.
Albemarle (NYSE: ALB) and SQM (NYSE: SQM), the world’s no. 1 and a pair of lithium miners respectively, have already got operations in Chile’s north, which they plan to expand.
SQM targets to achieve a complete capability of 180,000 tonnes yearly subsequent 12 months, with complete manufacturing anticipated to attain 140,000 tonnes. These characterize will increase of roughly 60,000 t/12 months and 40,000 t, respectively, from 2021.
Subsequent: 2018 déjà vu?
The rush to fulfill lithium demand might see a repeat of 2018 when a glut noticed the lithium value crash, analysts predict.
Whereas miners are scurrying to broaden capability, they will’t sustain with demand, so market tightness is more likely to persist within the close to time period, they are saying.
Fitch Options goes even additional, predicting more and more giant deficits out to 2030 that would “deeply” alter the market’s dynamics.
“Lithium provide will face various vulnerabilities, together with geographical focus at each the mining and refining degree, in addition to the restricted presence of established and huge mining gamers, which pose dangers to the challenge pipeline execution,” the consultancy stated in a December word. “Rising useful resource nationalism in key lithium markets might additionally hamper the event of latest initiatives.”
Pilbara Minerals (ASX: PLS), considered one of Australia’s prime lithium miners, closed the 12 months slashing its forecast for shipments, which has additional exacerbated tight provide for the important thing battery steel.
Some trade actors concern that climbing lithium costs might find yourself elevating prices for batteries and electrical automobiles, hampering the consumption of clean-energy sources at a time the world urgently wants them.
Consultants at UBS challenge that by 2030 the world might want to produce 2,700 GWh of lithium-ion batteries yearly to produce the EV trade. That’s 13 occasions the quantity of battery energy used now, or “225 billion iPhone 11 batteries.”
Most present suppliers are planning expansions. Albemarle’s MARBL three way partnership with Minerals Sources in Western Australia just lately unveiled plans to restart one of many Wodgina mine’s three 250,000 mt/12 months processing traces in Q3 2022.
Livent (NYSE: LTHM) plans so as to add 5,000 mt of lithium hydroxide capability within the US by Q3 2022. It’s also including an preliminary 10,000 mt lithium carbonate in Argentina, though that is solely attributable to attain business manufacturing within the first quarter of 2023, with one other 10,000 mt to be added within the second part by the top of 2023.
New initiatives must also begin up in 2022, together with Lithium Americas’ 40,000 tonnes/year carbonate Caucharí-Olaroz challenge in Argentina and Sigma Lithium’s 330,000 t/12 months spodumene project in Brazil.
Lithium Americas can also be creating the Thacker Pass lithium mine in Nevada, although that challenge has confronted authorized setbacks. The corporate is anticipated to publish a definitive feasibility examine on Thacker Cross subsequent 12 months.
New techs, zero-carbon and nationwide safety
The ongoing growth of latest lithium extraction methods might enhance main provide of lithium. The upcoming growth of lithium recycling and uncertainties round its timeline might additionally shock the upside provide expectations, specialists agree.
We are able to additionally count on new actors to strengthen their place available in the market, notably European ones.
The European Fee added lithium to its list of critical raw materials for the primary time in 2020, signifying its shift to the forefront of consideration.
Portugal is at the moment the continent’s largest lithium producer, accounting for 1.6% of world manufacturing in 2019, nonetheless the nation’s lithium will not be marketed to the auto sector, however to ceramics and glassware makers.
Savannah Sources (AIM: SAV) is forging forward with its Mina do Barroso proposed lithium mine in Portugal and it plans to quickly publish a definitive feasibility examine for the challenge.
Erris Sources (LON: ERIS) is engaged on the Zinnwald project, in Germany, situated within the coronary heart of Europe’s chemical and automotive industries.
Vulcan Power Sources (ASX: VUL), backed partially by Australian investor Gina Rinehart’s Hancock Prospecting, is aiming to supply the world’s first “zero-carbon lithium” from what it considers to be Europe’s largest lithium useful resource within the Higher Rhine Valley of Germany.
The corporate has in current weeks signed lithium provide agreements with a number of European automakers, together with Volkswagen, Stellantis and Renault. It goals to start out commercially producing lithium by 2024.
An Worldwide Power Company (IEA) report published in May really helpful governments to begin stockpiling battery metals, noting that lithium demand might enhance 40-fold within the subsequent 20 years. IEA govt director Fatih Birol stated this may turn into an “power safety” situation.
(With recordsdata from Reuters and Bloomberg)