Political and technological developments are expected to shape
the evolution of the global
lithium industry until the end of the decade, delegates at
IM’s 7th Lithium
Supply and Markets Conference heard in Shanghai, China, this
Daniela Desormeaux, general manager
of Chile-based market intelligence firm, SignumBox, told
delegates that Chile is eager to retain its position as the
world’s leading lithium supplier with the help of
The country supplies 60-65% of the
global lithium carbonate market and its lithium resources have
been officially protected for 40 years, after the Chilean
government declared it a strategic mineral in 1975.
This was followed by a raft of
policies designed to foster the sector’s
maturation, including auctionsfor contracts to exploit lithium
brines in the country’s salars and the
establishment of the National Lithium Commission in
The implementation of progressive
policies has not always been plain sailing, however, with the
September 2012 lithium tender becoming mired in controversy
after the winner, Sociedad Quimica y Minera (SQM), was stripped of the contract less
than a month after the auction, owing to outstanding legal issues between the company and the Chilean
In January this year, a number of
fresh measures were proposed to the Chilean president, Michelle
Bachelet, and Desormeaux said that a new lithium policy is
likely to be announced in the near future.
David Merriman, senior analyst at
UK-based Roskill Information Service, discussed how thanks to
government backing and the richness of Chile’s
lithium resources, the global lithium industry is presently
dominated by Chile-operating heavyweights, but said that
challengers to the established market players are looking to
shake up the lithium supply chain.
These include Canada-based Nemaska Lithium Inc., whose CEO, Guy Bourassa, explained
how the company’s phase one lithium hydroxide (LiOH) plant is being built at
Salaberry-de-Valleyfield in Quebec to provide a North American
source of lithium products from Nemaska’s hard
rock Whabouchi property.
Mine permitting is scheduled to
finish in the third quarter of 2015, Bourassa said, while
commercial samples of the company’s production
will be available in Q3 2016.
Other challengers include
Australia-based Neometals, which is developing the Mt Marion
spodumene project is south Western Australia along with a
patented electrolysis process to produce LiOH, and fellow
ASX-listed Orocobre Ltd, which is working to bring its
Salar de Olaroz lithium brine extraction facility in Argentina
up to 17,500 tpa capacity by the end of this year.
James Calaway, agreed that government policy was a key
determinant of the lithium industry’s ability to
progress, but stressed that other factors – namely,
environmental conscientiousness, growing unbanisation and
technology developments – were the main market
Calaway also noted that many junior
lithium projects have faced delays, meaning that supply is not
expanding at the same rate as demand.
According Qiang Chen, general
manager of China Energy Lithium Co., growth in demand for
lithium is likely to come from the energy storage sector, as
there is currently insufficient capacity to retain generated
energy for use on tap.
Chen said that the next generation
of energy storage batteries could be made of lithium metal or
lithium-sulphur, which could lead to a doubling of lithium
demand. According to his calculations, 3,000 tonnes of lithium
metal produced last year required 20,000 tonnes of lithium
China Energy Lithium is working with
institutes both within and outside of China to develop new
types of energy storage batteries. Chen pointed out that lead
batteries have been used for 150 years and while 95% of the
volume of these batteries can be recycled, lithium-based
materials cannot currently be reused.
As the technology develops, lithium
battery recycling may be realised in the future, he
|Batteries are not the only important end
market for lithium (source: Roskill).
Aside from energy storage, which has
gained increasing prominence in the new lithium technology
sphere over the last year, the topic of growth potential in the
lithium-ion (Li-ion) battery market for electric vehicles (EVs)
remains central to industry discussions.
Juan Carlos Zuleta, a lithium
economics analyst and member of the National Technical
Commission of Lithium in Chile, listed some key factors to
watch for in future lithium supply and demand
By the end of this year,
global plug-in sales will surpass the 1m mark for the first
time, Zuleta said. This indicates that growth of Li-ion
batteries for automotive applications will keep rising, he
said, but noted that demand for lithium batteries for other
uses may lag behind.
Tesla may have to compete with other
OEMs for its lithium supply (source: LMV
For Tesla Motors Inc., which
has become the poster child of the budding EV revolution,
Zuleta suggested that the momentum generated by the company as
it ramps up its Nevada, US-based Gigafactory to produce half a
million batteries by 2020, may encourage other original
equipment manufacturers (OEMs) to join the march towards
electrification in the global automotive industry.
This trend could be further
enhanced by a possible stabilisation in oil prices sometime in
2016, with forecasts placing the market at $60-65/barrel (bbl)
next year, up from $58-59/bbl today, which will make electric
cars competitive against petrol and diesel-fuelled
In terms of growth in lithium
demand, Zuleta said that this will be intimately related to the
EV market, and that Tesla may find itself forced to compete
with other automakers for lithium supply.
He suggested that the
all-electric bus segment, where the introduction of wireless
hypercharging is likely to foster a growth spurt in the next
two-to-three years, and the aerospace industry, where
electrification is expected to start within the next five
years, will all be vying for lithium raw materials.
Zuleta said that Tesla may
also have to bet on other non-lithium based technologies such
as magnesium or sodium-based batteries, although he stressed
that the hype over new lithium-sluphur batteries was premature,
since there are still a number of kinks in the
technology’s performance that still need to be