Spodumene in 10% price rise

By IM Staff
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 $400-450/s.ton.

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 spodumene/lithium
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

Price rollercoaster?
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.