by Rose Pengelly
But while the surge in lithium consumption by the batteries
sector has pushed up prices and made it economical for new
mines to open and existing producers to expand production, the
rush to supply the lucrative battery market could leave users
of industrial grade lithium, also referred to as technical
grade lithium, undersupplied, or facing unsustainably high
prices for what was until recently a fairly inexpensive raw
As battery demand for lithium continues to climb, incumbent
and prospective producers of the mineral are, seemingly without
exception, developing technologies capable of manufacturing
battery grade lithium from a variety of sources, including
brines, hard rock ores and clays.
According to IM’s
Global Lithium Market: Five Year Strategic Outlook
Study, batteries currently account for around 35%
of lithium consumption worldwide, with frits and ceramics the
second largest market at 31%.
Lithium carbonate is used in glazes and bodies of glass and
ceramics, to impart a range of physical and performance
benefits such as increased thermal stability, improved
mechanical and tensile strength, lower absorption, chip and
chemical attack resistance, reduced shrinkage and better energy
efficiency in the manufacturing process.
Glass and ceramic products exposed to high stresses and
temperatures, such as hobs for cookers and glass scintillators
used in spectroscopy and oil and gas exploration, are among the
applications where the addition of lithium carbonate is
Major global manufacturers including French glassmaker
Saint-Gobain and US kitchenware specialists World Kitchen
– owners of the brand CorningWare – and
German ceramics maker Schott AG all use lithium-based materials
in their products.
Ceramics and glassmakers have, to date, kept any concerns
they may have about future lithium sourcing and prices close to
their chests and none of those contacted responded to
IM requests for comment on this
But according to some industry observers with contacts in
these industries, these consumers are quietly anxious about
their supply chains.
"The people who are really worried [about the rising demand
for battery grade lithium] are the glass and ceramics makers,"
says Reiner Haus, managing director of German technology
specialists, Dorfner Anzaplan. "A lot of their raw material is
going into battery making and nobody is talking about investing
in technical grade lithium."
Last year, Schott published an article, acknowledging rising
lithium demand. The company uses lithium in its CERAN cooktop
panels, ROBAX viewing windows for fireplaces, its ZERODUR range
of glass-ceramics and for various security and fire protection
"Our glass-ceramics are based on a lithium aluminium
silicate system," explained Dr Martin Heming, director of
research and development at Schott. The glass-ceramic is
initially manufactured and melted like glass and then formed
into the desired shape. The material is then treated at a
temperature of 800-900°C to form nanocrystals, which shrink
when the glass-ceramic is heated, but leave the main body of
the material intact.
A crystal content of about 70% in lithium-ceramic glasses is
enough for crystal shrinkage to negate the expansion of the
glass altogether – an effect known as zero thermal
expansion. This property means glass-ceramics are resistant to
both high temperatures and heat shock, such that even a red-hot
glass-ceramic plate can be immersed in ice water without it
warping or shattering, according to Schott.
Haus explains that, in some applications it may be possible
to engineer alternative formulas that do not rely lithium to
impart certain desired properties, but this is not possible for
thermal and shock resistance.
"If you want heat resistant glass and ceramics, then you
have no choice but to use lithium," Haus says.
Schott’s article notes that there are limited
sources of lithium that can supply the grades it needs to make
its glass and ceramics products and also that rising demand
from the batteries industry is eating up much of the supply
currently available. It expects a lag in the arrival of new
lithium supply to lead to higher prices, but stops short of
stating that this poses any risk to its business.
Dr Heming does however admit that there is no alternative to
lithium for the products Schott makes. "We need a small, highly
polar ion which fits into the crystal just perfectly for our
glass-ceramics. And the periodic table of chemical elements
does not yet have a replacement to offer for the special
Preparing for shortages
According to Jon Hykawy, director of Toronto-based investor
research company Stormcrow Capital, the squeeze in supply of
ceramic and glass-grade lithium is already happening.
"Glass and ceramics is still a big area of use for lithium,"
Hykawy told IM. "Good quality spodumene
concentrate has low iron and if the grade is about 6% lithium
oxide (Li2O), then it can be used in glass to make
things like temperature-resistant cooktops. But everyone wants
[battery] chemicals, so [Australian spodumene producer Talison
Lithium Ltd], for example, has been making less and less high
grade spodumene concentrate."
"If no one can provide the glass makers with cheap and high
purity lithium units, they have a problem," Hykawy adds.
Industrial grade lithium customers are already facing
potential geographical shifts in their supply chains.
Australian lithium company, Orocobre Ltd, which is in the
early stages of supplying lithium on a commercial basis from
its Salar de Olaroz brine operation in Argentina’s
Puna region, currently has a small number customers for its
industrial grade lithium.
The company is currently building a battery chemical plant
in Japan to process lithium from Olaroz, through which all of
its Argentinean production is expected to pass before being
Speaking at an industry event in London in March, Andrew
Barber, Orocobre’s head of investor relations,
said that the company’s main focus is on supplying
the growing battery market. He assured delegates that the
company’s industrial customers "will not be left
high and dry" when the company moves its processing operations
and main supply base to Japan.
Barber did not respond to IM’s
requests to elaborate on this assertion, however. Industry
observers suggested anonymously to IM that
companies whose entire investment plan is centred on building a
battery lithium supply operation, will ultimately relinquish
the handful of industrial grade customers they currently
They argued that such supply relationships with junior
producers tend to be legacies of the companies’
earliest stages of production, when trial lithium batches had
an industrial sale value but were not pure enough for batteries
and were therefore offloaded at relatively low prices to
"Industrial users who have been supplied by these companies
will most likely be aware that the deals were only good for a
handful of shipments while [the supplier] was ironing out its
battery purification process," said one market
"Once this [lithium source] dries up, [the buyers] will go
to [Chilean producer Sociedad Quimica y Minera], who they were
probably buying from before anyway."
"SQM will maintain its industrial grade lithium output and
will I’m sure be only too happy to take any
customers cut adrift [by other suppliers’
decisions to focus on batteries]," they added.
Dorfner Anzaplan’s Haus believes that new
lithium suppliers need to be seen to be targeting batteries in
order to court and satisfy investors, who are not interested in
the relatively unspectacular opportunity to supply ceramics and
Hykawy thinks that as long as neither supply nor quality are
actually constrained, the relocation of lithium sources is
unlikely to worry industrial lithium consumers.
"As long as the customer is convinced that the material is
of good quality, shipping costs are the least of their worries
at high prices," he told IM.
He explains that processing circuits developed by companies
like Orocobre involve making technical grade lithium as part of
the standard, lowest cost method for producing battery grade
material, so in theory, there will be plenty of lithium
available for glass and ceramics producers as supply
"If someone wants to buy it, as long as there is overall
sufficient supply, and as long as someone is willing to pay
equal or slightly better margin to the producer, then they will
be able to buy their technical grade material. I’m
not worried about that, at all," he said.
At present, the majority of global lithium supply comes from
brines in South America, with the next largest source being
spodumene. Haus says that some glass and ceramics producers
could move to using lithium extracted from petalite –
a lower grade type of lithium ore that cannot currently be used
to yield lithium pure enough for batteries.
He warns, however, that these lithium sources are not being
developed fast enough or on a sufficiently large scale to meet
the looming supply gap. "There is not enough financing for
petalite projects. In fact, the whole sector is underfinanced,"
Some market observers believe that the possible shortage of
technical grade lithium is overstated, arguing that while new
and existing producers promote the battery demand growth story
as justification for their projects, many are also likely have
an eye on lithium’s traditional markets as a
reliable source of potential income.
This may be especially true for companies that experiencing
teething problems with their processing technology and end up
having to sell purify spodumene that they could not purify into
battery grade chemicals, although such situations are likely to
only yield technical grade supply in the short term.
The surge in lithium prices last year, which has been widely
credited to Chinese policies promoting domestic lithium-ion
battery and electric vehicle manufacturing, has given rise to
and revived enough lithium projects to, in theory, assuage
fears of a long-term supply shortage.
Christopher Ecclestone, principal mining strategist at
US-headquartered economic research firm Hallgarten and Co.,
notes that the global lithium mining sector is now on its
An initial battery-led boom in 2009-2010 saw the emergence
of up to 40 junior lithium companies, of which only Australian
producers Talison Lithium and Galaxy Lithium Ltd made it into
production, before a wider collapse in the global mining cycle
put the brakes on the industry.
The relatively recent history of the last global lithium
boom meant that the sector was quick to pick up where it left
off and according to Dorfner Anzaplan’s estimates,
there are at least 249 lithium projects currently underway
Ecclestone warns, however, that little of the fresh money
now circulating in the lithium business is going into
exploration, with many projects in the hands of "inveterate
promoters not intent on production".
"Even with the best will in the world and a financing
'perfect storm’, it could be years before any of
the latest crop bring a lithium product to market," he says,
noting that the most prospective projects, in his view are
developments based on Argentinian salars.
Another issue is the perceived processing bottleneck, with
not enough funding being allocated to building facilities for
purifying lithium concentrates, compared to the amount of raw
material production nominally under development.
This could see backlogs of material ultimately sold into
industrial uses just to keep cash flow going for suppliers,
which could push battery lithium prices up but ease pressure on
the cost of industrial grade material.
Many glass and ceramics producers claim that lithium
accounts for a small enough share of their overall production
costs not to be a concern, or that if lithium prices do rise to
the point where they have an impact on end product margins,
these costs can be passed on to producers.
Ultimately, the future of the lithium market remains
unclear. Few now seem to doubt the reality of the lithium
battery growth story and there is an increasing body of
research positing scenarios for this sector. But for glass and
ceramics, the long-established supply dynamics of this industry
could be in for a shock.