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Lithium

Lithium miners’ dispute reveals water worries in Chile’s Atacama desert – by Dave Sherwood (Reuters U.S. – October 18, 2018)

https://graphics.reuters.com/

Earlier this year, the world’s two biggest lithium producers publicly celebrated new deals with Chile’s government that will allow them to vastly increase output of the ultralight battery metal from the Atacama, the world’s driest desert.

U.S.-based Albemarle Corp and Chile’s SQM operate just 3 miles (5 km) apart in the remote Salar, a basin in the Atacama that is home to one of the world’s richest deposits of high-grade lithium. Lithium-ion batteries are key components for most consumer electronics, from cellphones and laptops to electric cars.

In celebrating the new contracts, the two companies said they were confident they could significantly boost output without drawing more than their current quotas of lithium-rich brine, or saltwater, that has for millennia accumulated in pools beneath the Atacama. The rivals said each had all the brine they needed for current and future production.

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Battery metals appear to be losing their spark as prices start to fall – by Courtney Goldsmith (World Finance – October 16, 2018)

https://www.worldfinance.com/

Cobalt and lithium prices have surged as a rise in renewable energy has increased the need for battery storage solutions. However, the bubble may be about to burst for these metals

The automotive industry is on the verge of an electric revolution. The International Energy Agency has predicted the number of electric vehicles on the world’s roads will triple to hit 13 million by the end of the decade – and by 2030 that number could soar to 125 million.

Meanwhile, the rise of renewable energy generation has boosted demand for battery storage, which can balance intermittent power from green energy sources. The global energy storage market is expected to grow to more than 300GWh between 2016 and 2030, according to Bloomberg New Energy Finance (BNEF).

These new industries are powering demand for batteries, which has thrust a number of little-known metals into the spotlight. This has led to the price of lithium – a key component in lithium-ion batteries – doubling between 2016 and 2018. Meanwhile, the price of cobalt – a by-product of copper or nickel mining that is used in battery cathodes – has more than tripled since January 2016 (see Fig 1).

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Livent Corp. boss warns of lithium shortage within a decade – by Susanne Barton, Laura Millan Lombrana and David Stringer (Toronto Star/Bloomberg – October 13, 2018)

https://www.thestar.com/

NEW YORK—The market for lithium will remain tight through 2025 as producers struggle to lift output fast enough to meet demand for the material that’s essential in making batteries for electric vehicles, according to the sector’s newest public company, Livent Corp.

“We think demand is going to grow almost five times larger in 2025 than it was in 2017,” chief executive officer Paul Graves said in an interview Thursday in New York, as the supplier made its trading debut. “Our biggest challenge is producing enough to meet the demand — there’s a much greater risk that this market is consistently in a deficit in the near future.”

The longer-term demand outlook from Livent, a spin off from chemical maker FMC Corp., echoes the view from Chinese competitor, Jiangxi Ganfeng Lithium Co., which this week sold shares in Hong Kong for the first time.

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Chilean court freezes sale of stake in lithium giant SQM to Tianqi – by Fabian Cambero (Reuters U.S. – October 11, 2018)

https://www.reuters.com/

SANTIAGO (Reuters) – A Chilean court on Thursday suspended the sale of a coveted stake in lithium producer SQM SQM_pb.SN to China’s Tianqi Lithium Corp, saying it will consider a lawsuit filed by the Chilean company’s controlling shareholders, who oppose the deal.

The lawsuit, filed on Wednesday, alleges a previous anti-trust court decision did not give shareholders adequate time to review the agreement between Tianqi and regulators, allowing the Chinese miner to purchase a 24 percent stake in the world’s No. 2 producer of lithium, a metal used to make batteries for electric vehicles.

The agreement is intended to limit the exchange of commercially sensitive information between Tianqi and SQM, though detractors say it does not go far enough. It would give Tianqi the right to have at least three of the company’s eight board seats, fueling concerns that Tianqi would have access to internal SQM documents that it would then use to its own advantage.

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Chile: Questions about Water Availability could Threaten the Mining Industry – by Mervyn Piesse (Future Directions.org – October 10, 2018)

http://www.futuredirections.org.au/

South America holds two-thirds of the world’s lithium reserves and Chile alone possesses almost half of the world total. Copper is also important to the Chilean economy and accounts for almost half of its export earnings. Many large Chilean copper mines are ageing, however, and the supply of high-grade ore has diminished.

To maintain production, copper producers are increasingly forced to exploit copper sulphide deposits, using a process that is more water-intensive. The Chilean Government is also simultaneously moving to exploit the country’s vast lithium resources, which could further strain water supplies in the resource-rich, but water-poor, Salar de Atacama.

As most of Chile’s lithium is dissolved in briny water drawn from Andean salt flats, it can only be extracted through a lengthy evaporation process. Conversely, Australian lithium reserves are predominantly found in hard rocks. Australia is currently the largest world supplier, despite holding less than ten per cent of the world’s identified lithium resources.

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The Lithium Cartel Is Self-Destructing – by David Fickling (Bloomberg News – October 10, 2018)

https://www.bloomberg.com/

China’s incentive to keep the electric-battery metal cheap has soured investors on Ganfeng’s Hong Kong IPO.

If that wasn’t bad enough, look at what just happened to Ganfeng Lithium Co., the world’s second-biggest producer. Its Hong Kong initial public offering has been priced at HK$16.50 a share, the company announced Wednesday, at the bottom of a target range that went as high as HK$26.50.

Even at those prices investors weren’t biting, with the slice available to Hong Kong investors about 40 percent undersubscribed. That’s arguably not surprising, given the run of IPO flops over the past year, including online car-sales platform Yixin Group Ltd. and smartphone maker Xiaomi Corp.

Still, it left a hefty share of the issue in the hands of LG Chem Ltd., Samsung SDI Co. and four Chinese state-linked companies who were acting as cornerstone investors and had subscribed for a fixed dollar amount, plus an additional 2 million shares which were placed with a unit of state-owned Guotai Junan International Holdings Ltd.

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Albemarle shares drop after Chile rejects hike in lithium quota – by Dave Sherwood and Ernest Scheyder (Reuters U.S. – October 8, 2018)

https://www.reuters.com/

SANTIAGO/HOUSTON (Reuters) – Shares of Albemarle Corp (ALB.N) fell as much as 2.3 percent on Monday following news that Chile’s nuclear regulator refused to increase the company’s quota to sell lithium produced from its Salar de Atacama operation.

The Chilean Nuclear Energy Commission (CCHEN) rejected Albemarle’s March request to increase its quota to sell lithium products by 258,446 tonnes, according to a Sept. 13 agency resolution obtained by Reuters via a Chilean freedom of information request.

Albemarle spokeswoman Andrea Cole said CCHEN’s concerns are of a “technical nature” and that the company would re-submit its request “in the coming weeks,” hoping to resolve the issue.

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Australia resources exports heading for record; country takes lithium crown – by Esmarie Swanepoel (MiningWeekly.com – October 2, 2018)

http://www.miningweekly.com/

ERTH (miningweekly.com) – Australia’s resources and energy exports are forecast to hit a record high of A$252-billion in 2018/19, helped along by a decline in the Australian dollar over the past quarter.

In its newest Resources and Energy Quarterly, the Office of the Chief Economist notes that the new outlook has been revised by about A$13.7-billion from the June quarter report, reflecting the weaker Australian/US dollar exchange rate, which is expected to add A$10.6-billion in export values, while higher-than-expected thermal coal and liquefied natural gas (LNG) prices account for the rest of the forecast gain.

Federal Resources Minister Matt Canavan on Tuesday said that Australia was now the world’s number-one exporter of lithium, while coal was expected to be the nation’s number-one export earner in 2018/19 at more than A$61-billion, narrowly ahead of iron-ore at A$60-billion.

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Albemarle eyes future as pure-play lithium market leader – by Ernest Scheyder (Reuters U.S. – September 27, 2018)

https://www.reuters.com/

Sept 27 (Reuters) – Albemarle Corp, the world’s largest lithium producer, aims to eventually end its dependence on two smaller units to fund growth as global appetite surges for electric-powered vehicles and consumer goods, its chief executive said in an interview.

Tesla Inc and other automakers have helped make lithium one of the most-in demand metals, part of an electrification trend sweeping through a global economy increasingly eager to shed fossil fuels.

Albemarle’s lithium earnings have jumped nearly six-fold since 2014 to more than $500 million annually and should significantly exceed 50 percent of corporate earnings by 2021, Chief Executive Luke Kissam said in an interview.

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SoftBank moves to lock up lithium, the lifeblood of electric cars – by Minoru Satake (Nikkei Asian Review – September 24, 2018)

https://asia.nikkei.com/

TOKYO — SoftBank Group is on the hunt for natural resources, particularly the lithium needed for electric car and smartphone batteries.

Demand is expected to surge as more electric vehicles hit roads worldwide. Competition for battery materials is stiff, with Apple rushing to secure supplies of cobalt. And SoftBank considers lithium a priority, as it looks to build a stronger foundation for its other investments, like ride-hailing companies.

In June, SoftBank enlisted the chairman of trading house Mitsui & Co., Masami Iijima, to serve on its board as an outside director. A SoftBank executive said the move was made to “facilitate our future efforts to secure resources.”

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Solid demand to underpin lithium as price slides in 2018 – by Zandi Shabalala (Reuters U.S. – September 17, 2018)

https://www.reuters.com/

LONDON (Reuters) – An oversupply of lithium this year has nearly halved prices this year in China, halting an unprecedented run for the key component for batteries used in electric vehicles.

But analysts say solid long-term demand should shore up the market after a slight surplus in demand this year. A boom in electric vehicles has boosted prices for components of lithium-ion batteries including lithium and cobalt, as consumers such as car companies to scramble to secure supplies.

But lithium prices have come under pressure in 2018 because miners have ramped up production, consumers destocked supplies and a subsidies in China’s new energy vehicles (NEV’s) market have been pulled back.

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Chile lawmakers mull additional mining tax for copper, lithium – by Cecilia Jamasmie (Mining.com – September 14, 2018)

http://www.mining.com/

The Lower Chamber of Chile’s Parliament has begun studying a project that would set a 3% mining royalty for all companies operating in the country, which is the world’s top copper producer and the one with the largest known reserves of lithium.

The proposed tax, to be applied on the nominal value of extracted metals, would affect copper miners that produce more than 12,000 tonnes of the metal annually and those extracting 50,000 tonnes a year of lithium, used in batteries that power electric cars.

The idea is to have miners contributing part of their profits to the regions where they operate, Radio Universidad de Chile reported (in Spanish).

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Tesla Lithium Dash Could Slow as Mine Project Faces Hurdle – by Laura Millan Lombrana (Bloomberg News – September 13, 2018)

https://www.bloomberg.com/

An Australian mining lithium project that has an agreement to supply Tesla Inc. faces a legal hurdle that may delay plans to start production, potentially spurring shortages of the mineral used in batteries for electric cars.

A court in Perth recommended Western Australia’s mining ministry shouldn’t approve an exemption from past minimum exploration-expenditure obligations at the Mt. Holland hard-rock project, lithium giant SQM said in a statement on Wednesday.

Development of Mt. Holland, owned by SQM and Kidman Resources Ltd., could be slowed if the ministry doesn’t award the exemption, SQM said.

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Electric Cars Give New Life to Mine Excavated for Nuclear Power – by Jonathan Tirone (Bloomberg News – September 10, 2018)

https://www.bloomberg.com/

Demand for a new generation of electric vehicles is breathing life into an Alpine mine that was originally excavated to feed an Austrian nuclear industry that never materialized.

The developer of the site in Wolfsberg, European Lithium Ltd., is planning to move its primary stock listing to Austria from Australia in anticipation transforming the site into the continent’s biggest producer of the light metal that powers plug-in vehicles, according to a company executive.

“The potential off-take clients are European automakers,” Stefan Mueller, a non-executive director at European Lithium, said in a telephone interview. “They know that they have to secure lithium.”

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Lithium: Best of Times/Worst of Times? – by Joe Lowry (LinkedIn.com – September 8, 2018)

Joe Lowry: One of the World’s Leading Lithium Market Experts.

This has been a strange year in the lithium world. There has been a constant stream of good news about long term demand growth from the electric transportation and ESS markets. Yet, lithium stock prices have dropped precipitously largely due the constant din from the “oversupply camp” that a “tsunami of supply” from Australia was about to enter the market via China converters and crash lithium chemical prices.

In 2018 there is some level of “logic” to support either the short term “oversupply” or “tight market” view. Those who believe lithium start-ups are easy have no support from history but that belief is the cornerstone of “oversupply” thinking

However, in my opinion, the vast majority of data still supports relatively tight supply and strong lithium prices for the next few years. Strong price does not mean the highest China pricing from 2016. As long as the market is tight the price will not be cost curve driven but a result of market forces: meaning above and in certain cases, such as today, well above the cash cost of the high cost producer.

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