Mitsubishi considers producing lithium in Chile

By Mark Watts, Jack Elliott
Published: Tuesday, 28 June 2011

Mitsubishi Corp. looking to develop a lithium project in Chile to power its new fleet of Mitsubishi innovative Electric Vehicles (i-MiEV) while Chile In talks to remove Li project ban

Mitsubishi Corp. is looking to develop a lithium project in Chile to power its new fleet of Mitsubishi innovative Electric Vehicles (i-MiEV), according to newspapers in the South American country.

El Mercurio reported that the Japanese group intends to manufacture 20,000 units of i-MIEV in 2011 and plans to further this to 50,000 units per year.

According to the Santiago Times, president of Mitsubishi Chile, Masaji Santo, said: “Lithium is the heart of the electric car and we want to develop our own source for the mineral”.

He reportedly said Mitsubishi would be entering discussions with the Chilean government on removing an existing ban on new lithium projects.

At present, Mitsubishi buys lithium from SQM, the world’s largest producer, which extracts lithium solutions from the Salar de Atacama in the north of Chile.

Commenting on the development, Daniela Desormeaux of Chile-based consultancy SignumBOX, told IM: “We estimate that the lithium-ion battery pack that powers the Mitsubishi i-MiEV requires 14kg of lithium carbonate equivalent (LCE), so 20,000 units would require 288 tonnes of LCE and 50,000 units would require 720 tonnes of LCE.”

Mitsubishi has also signed an off-take agreement with Lithium Americas, a Canadian junior that is developing a lithium project in the Salar de Cauchari in Argentina - a 40,000 tpa lithium carbonate production facility built in two phases.

The construction of the first 20,000 tpa phase is expected to start in 2012 and the second is expected to begin in 2016, with the capital costs for both phases estimated to total $399m.

Chile mining ban removal?

Desormeaux argued that given the huge global availability of lithium, Mitsubishi must be on the cusp of agreeing the removal of Chilean mining ban if it is considering developing a project there.

“Current regulation does not allow the exploitation of lithium, since lithium is considered as a ‘strategic mineral’ by Chilean law...The Chilean government has expressed interest in changing this regulation since it has realised that if they do nothing the country will lose its leadership in the industry,” Desormeaux said.

“If Mitsubishi is interested in getting involved in the lithium business in Chile it is probably because the company expects that this ban will be removed soon and also because it wants to secure its own supply of lithium, despite the existence of several players in the industry,” Desormeaux said.

Desormeaux emphasised that global lithium reserves are abundant, with over 80 projects announced in the past few years, and many current producers have the potential to increase capacity

Mitsubishi is not alone in eyeing Chile as a source of lithium. Korea Resources Corp. (Kores) and Samsung C&T Corp. have earmarked a joint investment of $190m. in the NX Uno project, in south-west the Salar de Atacama, to secure raw materials for future battery production in South Korea.

Canada Lithium on track

Canada Lithium expects to start construction at its project in Quebec in the third quarter of 2011 after completing an update to its disputed feasibility study.

The company commissioned AMC Mining Consultants to produce an independent study of the deposit after a disparity was found in its initial resource estimate.

The updated resource estimate shows a total measured and inferred resource of 29.3m. tonnes at 1.19% lithium oxide, compared with the 46.7m. tonnes at 1.19% figure released in 2010.

Canada Lithium said the resource downgrade would not impact the plan to develop a 20,000 tpa capacity lithium carbonate project, with a mine life of just under 15 years.

Design specifications were expected to be finalised by the end of June before the company places orders for long-lead equipment. Plant commissioning has been targeted for Q4 2012.

Lithium prices to rise

Chemetall plans to hike the prices of its lithium products by 20% to bring the market back to pre-recession levels, the lithium producer’s parent company Rockwood Holdings announced.

The company, which operates plants Chile and the USA, raised prices of lithium carbonate, lithium hydroxide, lithium chloride and battery-grade lithium metal from 1 July 2011.

Chemetall said the price increases would recover increased costs for energy, raw materials, solvents and transport.

“With this increase we will return prices of lithium carbonate and lithium hydroxide to the levels of 2008,” said Steffen Haber, president of Chemetall.

“In addition, higher prices will help to support our efforts to increase our global production capacities,” he added.

Prices for standard battery grade lithium carbonate have been assessed in a range of $4,500-5,000/tonne, FOB South America, for the first half of 2011.

At the same time, lithium hydroxide (56.5-57.5% LiOH, large contracts, packed in drums or bags, del Europe or USA) is trading at around $6-6.60/kg.

Chemetall has capacities of about 33,000 tpa lithium carbonate and 5,000 tpa lithium hydroxide, which it plans to expand to 50,000 tpa and 15,000 tpa respectively by 2020.

Headquartered in Germany, the group is the world’s second largest producer of lithium carbonate after Chile’s SQM.