Industrial Minerals recorded this interest in the importance
given to the new Battery Price report, which launched in
October 2016, and in the record number of delegates who
attended the 2017 9th Industrial Minerals Lithium Supply &
Markets conference, held in Montreal, Canada.
The demand driver in lithium is reported to be the
automotive sector. This year alone, several car manufacturers
have either released a new electric vehicle model or announced
their intention to do so.
In some quarters, lithium carbonate – the material
used to make lithium-ion batteries and derived from either hard
rock (spodumene) or brines – is referred to as white
It is not surprising, then, that the current tally of junior
producers hoping to bring a lithium project online stands at
Indeed, supply is still one of the most hotly debated topics
in the industry. No one now doubts that new supply will be
needed – the nay-sayers have long been silenced on
that topic. But there is some dispute about where the new
supply will come from.
Through 2017, the imbalance between supply and demand was as
prevalent as it had been over the previous two years. Prices
remained strong, much to the investors’ relief
– a softening of the current market prices remains one
of the investors’ and juniors’
greatest fears, as it could threaten the development of
Although the number of developing projects is large, the
know-how of the lithium industry remains underdeveloped.
Producing lithium carbonate or hydroxide requires technical
knowledge, an understanding of the challenges facing the market
Traditional producers such as SQM, Albemarle, FMC, Ganfeng and
Tianqi, among others, have sought to increase their total
output and production capacity to fulfil current market demand
To secure raw materials supplies, several of the traditional
producers have engaged in offtake agreements with junior
lithium producers and have started to participate in their
projects to speed up their development processes.
Fanning the flames
Concerns regarding the safety of lithium-ion batteries have
continued. At the start of the year, the United States consumer
safety watchdog called for heightened safety regulations on
lithium-ion batteries after details were released by Samsung
Electronics Co Ltd, outlining what had caused a number of its
Galaxy Note 7 smartphone devices to overheat and catch fire in
2016, prompting two recalls and a cessation of
In April, a train carrying electric vehicle lithium-ion
batteries exploded near the US city of Houston on its way to
Los Angeles, where the batteries were being shipped for
Chile’s state-owned Corporación Nacional
del Cobre de Chile (Codelco) opened a bidding process for the
development of lithium projects at its two salt flats,
Pedernarles and Maricunga, in northern Chile. By the end of the
year, it had still not announced the winner.
GFL International Co Ltd (Ganfeng) agreed to invest $174
million in the Lithium Americas Corp (LAC) Cauchari Olaroz
project in Argentina to secure an offtake agreement and to
ensure the project’s development.
The deal sees Ganfeng, the largest integrated lithium producer
in China, picking up 75 million common LAC shares for a total
of $49 million, as well as the right to purchase as much as 70%
of LAC’s share of Cauchari’s Stage 1
lithium carbonate production at market prices.
Albemarle Corp, the world’s largest producer of
lithium, revealed that it will pay royalties of as much as 40%
to Chilean state economic body Corporación de Fomento de
la Producción (CORFO) under its agreement to expand
lithium production in the country.
The joint venture between Albermarle and Tianqi Lithium Corp,
Talison Lithium, has approved the expansion of lithium
concentrate production at its Greenbushes spodumene mine in
The expansion is intended to more than double lithium carbonate
equivalent (LCE) capacity at Greenbushes from 80,000 tonnes per
year to more than 160,000 tpy. Commissioning of the expansion
is expected to begin in the second quarter of 2019.
Chinese lithium producer Tianqi Lithium Corp said that it will
not proceed with the exercising of an option that would have
seen it acquire a 20% stake in Rockwood Lithium GmbH, a
subsidiary of US counterpart Albemarle.
Albemarle and Tianqi entered into a deed of termination in
relation to the planned share purchase in February.
Electric vehicle (EV) producer Tesla Motors Inc commenced
lithium-ion (Li-ion) battery cell production at its gigafactory
in Reno, Nevada, US, in January.
Tesla said that, by 2018, it intends to produce 35 GWh per year
of lithium-ion battery cells, nearly as much as the rest of the
world’s battery production combined.
It then revealed that it would be building three further
battery gigafactories, but did not say where.
Japanese car manufacturer Toyota announced that it has
completed the sale of its stake in Tesla Motors following the
termination of the contract at the end of 2016, ending the
previous partnership between the companies.
In 2010, Toyota and Tesla agreed to work jointly on the
manufacturing of electric vehicles, with the Japanese company
acquiring 3.15% of Tesla’s outstanding shares,
valued at $40.5 million (¥4.50 billion).
Nemaska Lithium received a lump-sum payment of $10 million from
FMC Corp as part of a previously-agreed supply deal for lithium
Under the amended agreement, Nemaska Lithium will start to
supply FMC no later than April 1, 2019, and had to supply
lithium carbonate samples to FMC for qualification in
Breaking with the delivery obligations agreed in the supply
agreement will force Nemaska Lithium to return the full $10
million payment plus an agreed penalty.