Global lithium producers are set to continue increasing
output year on year to maintain pace with growing demand,
anticipating global lithium supply to reach 363,000 tpy of
LCE in 2019, according to Fastmarkets research team.
That said, supply figures may come in lower than this
because low prices could lead to market adjustment and
continued difficulties when expanding production, which
could mean missed output targets.
Between January 2018 and the start of 2019, the
battery-grade lithium carbonate price fell by 50.31% in
China. The rapid supply increase of lithium compounds,
competitive prices in the market by smaller size producers
as well as the 2018 new energy vehicles (NEVs) subsidy
policy in China were the main factors behind the price
decrease throughout the year
Fastmarkets assessed the Chinese domestic battery-grade
lithium carbonate (min 99.5% Li2CO3) spot price at
75,000-83,000 yuan ($11,157-12,347) per tonne on January 3,
2019, down from 158,000-160,000 yuan per tonne on January
4, 2018. The most recent assessment for this market was
70,000-78,000 yuan per tonne on April 4, moving down from
72,000-80,000 yuan per tonne on March 28.
While global lithium supply is set to increase to fulfil
the demand coming from the battery sector, Chinese
producers should play a major role in adding new
lithium-compound production in future.
Over 2018, China emerged as the world’s
leading lithium-processing hub due to the likes of Tianqi
Lithium, Ganfeng Lithium, Sichuan Yahua Lithium and
Shandong Ruifu rapidly adding new units of lithium
chemicals to the global market by converting lithium
concentrate from hard rock. Lithium concentrate produced
from hard rock - sourced mostly in Australia - became the
major source of raw materials used in the production of
lithium carbonate and lithium hydroxide in China in
In 2018, global production of lithium compounds from
hard rock increased to 173,000 tpy of LCE from 60,000 tpy
of LCE in 2016, while lithium compounds produced from brine
totalled 148,400 tpy of LCE in 2018 from 140,000 tpy of LCE
in 2017, according to Fastmarkets research team.
Although Chinese producers’ role as
suppliers of lithium compounds in 2019 is set to keep
increasing on support from the growing output of hard rock
mined from Australia, lithium producers in the rest of the
world continue to run into issues trying to raise output,
so are set to produce the same amount of material in 2019
as in 2018.
The exception is Sociedad de Quimica y Minera (SQM),
which is planning to raise output but also stockpile some
material, thereby supplying a similar amount to the market
this year as it did last year.
Lithium producers ex-China
The four major lithium producers in the world excluding
China - Albemarle Corporation, SQM, Livent and Orocobre -
stand out due to their size and role within the global
Albemarle Corporation has been the world’s
largest producer of lithium carbonate and lithium hydroxide
for many years, a role that could be consolidated through
the agreement reached with the Chilean Economic Development
Agency (Corfo) on March 9, 2018.
Through this agreement, Corfo authorized Albemarle to
increase its production quota for LCE up to 145,000 tpy
through to 2043, up from 33,000 tpy of LCE in
Yet the production issues encountered when expanding La
Negra operations in Chile - where the company produces an
important amount of its total lithium production - could
affect Albemarle’s ability to increase its
total lithium production within Chile in 2019.
Albemarle could reach a total production volume of
80,000 tpy of LCE in 2019, including tolling, from 64,000
tpy of LCE reached in 2018, if production issues fail to
The company has been diversifying its lithium operations
abroad and ramping up production at its subsidiary Jiangxi
New Material and lithium-spodumene production at the
Greenbushes mine in Western Australia, to keep expanding
output outside of Chile.
At the same time, Albemarle is building a lithium
hydroxide plant in two phases with a production capacity of
up to 100,000 tpy in Kemerton in Western Australia, which
should start commissioning by 2021. Albemarle has a joint
venture with Mineral Resources for a 50% interest in all
lithium mineral concentrate produced from the Wodgina mine
in Western Australia.
Both companies agreed to build a lithium-hydroxide plant
with an initial production capacity of 50,000 tpy that will
be operational by 2022 and will use lithium concentrate
produced from Wodgina.
Albemarle’s neighbor at the Salar de
Atacama in Chile, SQM, is the second largest lithium
producer in the world outside of China and so far in 2019,
appears to be the lithium producer that could expand its
current lithium output the most.
Although Corfo authorized the company to increase its
lithium production by almost five-fold to 216,000 tpy by
2025, SQM’s current plan is to increase its
lithium-carbonate production to 100,000 tpy by 2019 from
the current 48,000-tpy level.
With expectations that it will produce over 60,000 tpy
of LCE in 2019, SQM plans to stockpile 10,000 tonnes of
lithium carbonate over the course of 2019. This change in
market strategy demonstrates the company’s
interest in keeping its supply chain flexible, so as not to
flood the market while responding to the growing market
SQM has also sought to diversify its lithium production
overseas and has reached a joint venture with Kidman
Resources for the exploration of Mount Holland in Western
Australia. SQM plans to build a lithium hydroxide plant
with a production capacity of 45,500 tpy, which will start
commissioning by 2021.
After the top two producers outside of China comes
Livent, the largest Argentinian producer of lithium
compounds from brine, which operates at its Fenix site in
the Salar del Hombre Muerto and doubled its battery-grade
lithium-hydroxide capacity to 18,000 tpy in 2017.
The company expects a total lithium-hydroxide capacity
of 30,000 tpy by 2019 and will expand beyond this level
when customers require. Most recently, the company said it
was looking at new lithium operations to expand production
The last, and newest, producer making lithium from brine
outside of China is Orocobre, which operates its Olaroz
brine project in Northern Argentina under a JV between
Orocobre (66.5%), Toyota Tsusho Corp (25%) and Jujuy
Energia y Mineria Sociedad del Estado (8.5%).
Orocobre produced 12,470 tpy of lithium carbonate in
2018 and aims to produce 14,000 tpy of lithium carbonate in
2019. The company will start the second stage of the
expansion at Olaroz to produce 17,000 tpy of battery-grade
lithium carbonate and 15,500 tpy of technical and
industrial-grade lithium carbonate in the second half of
Orocobre and Toyota Tsusho hope to finalize the
development of a 10,000-tpy lithium-hydroxide plant in
Fukushima in Japan, which is scheduled to come online in
Chinese lithium producers
Not far behind Albemarle and SQM, and of equal importance,
are Chinese Tianqi Lithium and Ganfeng Lithium, which have
rapidly increased their size and influence in the global
Tianqi Lithium has grown rapidly in the past few years,
expanding its operations and influence across the lithium
supply chain. The recent 23.77% acquisition of
SQM’s shares demonstrates
Tianqi’s intentions to grow globally and
increase total lithium output to supply the developing
battery industry in China, Japan and Korea.
Tianqi Lithium is one of the largest lithium producers
in China, producing close to 50,000 tpy of LCE in 2018 and
aiming to boost total LCE production capacity up to 58,800
tpy by the end of 2019. Tianqi will source some of its raw
materials from the Greenbushes mine - through its 51%
ownership - and from the company’s brine
operations in Zhabuye in Tibet.
Tianqi is also developing the Kwinana lithium-hydroxide
plant in Western Australia to reach a total capacity of
48,000 tpy of battery-grade lithium hydroxide in two stages
of 24,000 tpy each. Stage 1 of Kwinana’s
production should start by the second half of 2019 with
stage 2 set to start in the second half of 2020.
Ganfeng Lithium has similarly increased its global
standing in recent years. In early April 2019, Ganfeng
increased its ownership of the Cauchari-Olaroz JV lithium
project in Northern Argentina with Lithium Americas to 50%.
This project will initially produce 25,000 tpy of lithium
carbonate after production starts in the second half of
Concurrently, Ganfeng has a 10-year supply agreement
with Australia Pilbara Minerals for 160,000 tpy of lithium
Ganfeng is looking to increase its total capacity of LCE
to 100,000 tpy by 2020 from 79,000 tpy of LCE currently to
fulfil the diverse supply agreements in place with, most
recently, the Volkswagen Group, Tesla and BMW.
China’s Sichuan Yahua Lithium and Shandong
Ruifu are important as well, they have been ramping up
total output in China in past years by using the Australian
hard-rock concentrate as a raw material source.
Sichuan Yahua Lithium is working to expand its
production to 22,000 tpy of LCE in 2019 from 12,000 tpy of
LCE in 2018. Shandong Ruifu plans to expand total LCE
output up to 25,000 tpy by the end of 2019.
Lithium hard rock miners
Used as the raw material in lithium chemicals such as
lithium carbonate and lithium hydroxide, the hard rock
extracted from mines in Australia has changed the lithium
industry from being brine dependent into using lithium hard
Lithium hard rock concentrate - less affected by
rainfall or snow and able to offer lithium carbonate and
hydroxide quality consistency – is also known as
spodumene concentrate and has become an important raw
material for most Chinese producers while showcasing that
lithium hard-rock mines have the capacity to increase
production faster than lithium brine operations.
Roughly, 7 to 8 tonnes of min 6% spodumene concentrate
equals 1 tonne of lithium carbonate or hydroxide, Australia
miners told Fastmarkets.
Currently, most of the hard-rock lithium mines in the
world are located in Western Australia, which is close to
China where most of the world’s conversion
capacity is installed.
The world’s largest lithium hard-rock mine
is Greenbushes in Western Australia operated by Talison
Lithium, which is jointly owned by Tianqi (51%) and
Albemarle (49%). The mine should produce the equivalent of
100,000 tpy of LCE in 2019 while it aims to further
The second largest lithium operating mine is Mount
Marion lithium mine, the 50-50% JV between Ganfeng and
Mineral Resources. The mine made its first shipment of
15,000 tonnes of spodumene concentrate in February 2017
before producing 418,711 tpy of spodumene concentrate in
Ganfeng and Mineral Resources have plans to build a
lithium-hydroxide plant with a nameplate capacity of
20,000-25,000 tpy in Kalgoorlie for the production of
battery-grade lithium hydroxide compounds using the Mount
Galaxy Resources produces spodumene at its Mount Cattlin
mine in Ravensthorpe in Western Australia. The company
produced 150,000 tpy of lithium spodumene concentrate in
2018 and aims to produce 180,000-210,000 tpy of lithium
spodumene concentrate in 2019.
In the Pilbara region in Western Australia, Pilbara
Minerals made its first shipment of lithium spodumene
concentrate from its Pilgangoora Lithium Tantalum project
on October 2, 2018, producing 47,859 tonnes of spodumene
concentrate in the final quarter of 2018.
Stage 1 of Pilgangoora aims to produce 330,000 tpy of
min 6% spodumene concentrate, running from June 2018 to
2020. Moreover, stage 2 will start commissioning and
expansion in the first quarter of 2020 to increase the
company’s total output to 850,000 tpy of 6%
Also located in the Pilbara region, Altura
Mining’ Pilgangoora Lithium stage 1 began at
the end of 2018 with a nameplate capacity of 220,000 tpy of
lithium spodumene concentrate, which could take up to three
years to fully ramp up.
Stage 2 of the project will determine optimal mine
output and aim to increase production to 450,000 tpy of
lithium spodumene concentrate.
Also in Western Australia, Alliance Mineral
Assets’ Bald Hill Mine operation started stage
1 lithium concentrate production in March 2018 with an aim
to produce at a full capacity of 180,000 tpy of spodumene
concentrate in 2019 and an increased output of 240,000 tpy
In Brazil, the AMG Lithium Mibra Mine started production
in 2018 with a planned production guidance of 90,000 tpy of
spodumene concentrate and an option to expand to 180,000
tpy by the end of 2020.
This article will also be published in the upcoming
issue of the Fastmarkets IM magazine.