Spodumene in 10% price rise
Published: Sunday, 22 November 2009
Talison ups glass grade spodumene in the wake of the suspension of its biggest competitor, TANCO.
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The lithium industry’s leading spodumene producer,
Talison Minerals Pty Ltd has reacted to the closure of its
biggest competitor, Tantalum Mining Corp. of Canada Ltd. by
increasing glass grade spodumene by 10%.
Prices for glass grade spodumene (5% Li2O CIF Asia), mined from
the Australian producer’s Greenbushes mine, rose
to $380-430/tonne from $360-380/tonne.
The same grade, FOT (free-on-truck) Amsterdam, increased to
$390-440/tonne from $370-420/tonne, while for FOB West
Virginia, prices moved up to $430-480/s.ton from
TANCO suspended its operations in September following
significant demand slump for spodumene concentrates in ceramics
and glass (see Price rollercoaster?).
Talison’s is the world’s leading
spodumene producer with a 70%
market share. It operates the world’s biggest
mine in Greenbushes, Australia. Courtesy Talison Minerals
Galaxy welcomes rises
Unsurprisingly, potential spodumene and lithium
carbonate producer, Perth based Galaxy Resources Ltd, very much
welcomed the prices rises into an industry which now only sees
significant spodumene production from China.
"We support Talison’s spodumene price increase as
signs of recovery in China are evident, "Galaxy’s
managing director, Iggy Tan, told IM.
"Our cost will be comparable to Talison when it commences its
mining and processing by Q3 2010 for its chemical grade
spodumene," he added.
Galaxy does not see its neighbour as being a direct competitor
as they will be serving different markets.
"Talison sells its concentrated spodumene ore to end users in
the glass and ceramic manufacturing sectors and to lithium
processors in China," Tan said. Galaxy will use its spodumene
concentrate as a feedstock for battery grade lithium carbonate
produced in Zhangjiagang, Jiangsu, province, China.
It has been a good month for Galaxy as it also received the
green light to start the construction of its spodumene mine in
Ravensthorpe, Australia and its 17,000 tpa lithium carbonate
(Li2CO3) plant in Jiangsu 80km north-west of Shanghai,
following the raising A$65m. ($59m.).
Lithium production from spodumene
*Pegmatite production not spodumene
Comparing this price development with last month’s
news story, Price cuts give lithium rude awakening (IM November
2009, p.14) shows how the same influencing factor can cause
prices of a similar mineral to go in very different directions.
Poor demand for lithium carbonate predominately from battery,
ceramics and glass producers forced bulk seller, SQM SA, into a
20% price cut. The same poor demand more specifically from the
ceramics and glass sector forced spodumene/lithium concentrate
producer, Talison, into a 10% price rise.
Whereas SQM’s influencing factor came from demand
side, Talison was actually influenced by supply
TANCO’s closure took on average 5% of lithium
produced from minerals out of the market.
As Talison accounts for nearly 70% of lithium mineral
production, TANCO’s customers will now naturally
gravitate towards Talison. Despite poor overall demand,
inadvertently demand for Talison increased as a result and
their subsequent position has strengthened logically price
increases follow, this is a business after all.
On the face of it lithium would seem like a price
rollercoaster, in reality it is simple supply/demand economics.
In essence lithium carbonate producers from brine and spodumene
concentrate producers for ceramics and glass could well be seen
as different industries.