Prime lithium tales of 2021 and what to anticipate in 2022

#1 Jadar

Rio Tinto (ASX, LON, NYSE: RIO) greenlighted in July its $2.4 billion Jadar lithium challenge in Serbia. The world’s second-largest miner mentioned on the time that by 2030 EV makers will want about three million tonnes of lithium, in contrast with the roughly 350,000 tonnes they devour as we speak.

Current operations and tasks mixed, nevertheless, are slated to contribute a million tonnes of lithium.

Filling that provide hole, Rio Tinto mentioned, would require greater than 60 Jadar tasks. The proposed mine is slated to provide 58,000 tonnes of lithium carbonate, 160,000 tonnes of boric acid and 255,000 tonnes of sodium sulphate a 12 months at full tilt. 

However the firm is dealing with fierce opposition to the challenge. In early December, native opponents organized a motion that has rocked the federal government and introduced cities to a standstill as hundreds of protesters marched within the streets. Authorities subsequently suspended a land-use plan for the proposed mine, although they didn’t reject the challenge fully.

Rio mentioned on Dec. 23 it plans to pause its Jadar lithium challenge after a municipality within the nation scrapped a plan to allocate land for the mine, throughout which it would have interaction in a public dialogue in regards to the challenge.

#2 Chinese language offensive

Despite the fact that China’s lithium reserves rank because the world’s fourth-largest, the battery steel is especially discovered within the salt lakes round Tibet and Qinghai, a sparsely populated Chinese language province unfold throughout the high-altitude Tibetan plateau. That makes it troublesome to refine and transport, and partly explains why Beijing regarded elsewhere this 12 months.

Ganfeng Lithium, one of many world’s high producers, bid for a stake in Canada’s Millennial Lithium in July, whereas battery making large CATL, led by billionaire Zeng Yuqun, joined the race just a few months later, trumping Ganfeng. In the long run, it was a 3rd firm, Lithium Americas, that emerged victorious.

Ganfeng grabbed the Pastos Grandes challenge in Argentina with Millennial Lithium purchase. (Picture courtesy of Millennial Lithium. )

The corporate additionally acquired Mexico-focused explorer and developer Bacanora Lithium (LON: BCN) this 12 months, including the Sonora challenge to its rising portfolio.

Ganfeng didn’t cease there and acquired in September Worldwide Lithium, which was its accomplice within the Mariana challenge in Argentina, one of many greatest deposits globally.

Representatives of 5 Chinese language firms obtained particular visas and travelled to Afghanistan in early November to conduct on-site inspections of potential lithium tasks.

Zijin Mining additionally grabbed headlines, particularly with the acquisition of Canada’s Neo Lithium Corp in October.

#3 Aussie M&As

One of many greatest tales of the 12 months within the lithium market got here in April, with Australian lithium miners Galaxy Sources (ASX: GXY) and Orocobre (ASX: ORE) asserting their merger. The enterprise mixture created a $3.1 billion (A$4bn) firm, set to be the world’s fifth-largest producer of lithium chemical substances.

A three way partnership between Tianqi Lithium and IGO Ltd additionally grabbed headlines as they produced Australia’s first batch of lithium hydroxide, used to make cathodes for lithium-ion batteries that energy electrical autos. As soon as in full manufacturing, Kwinana would be the largest lithium hydroxide-producing operation and the most important spodumene converter on this planet.

Piedmont Lithium (ASX: PLL) and its 19%-owned Sayona Mining (ASX: SYA) accomplished the acquisition of Canada’s North American Lithium (NAL), as a part of their plan to create a potential lithium manufacturing hub within the Abitibi area of Quebec. 

The Sal de Vida challenge. (Picture courtesy of Galaxy Sources.)

Weeks later, they purchased one other Canadian challenge: Moblan challenge within the Eeyou-Istchee James Bay area of northern Quebec.

Liontown Sources (ASX: LTR) confirmed plans in November to deliver its Kathleen Valley exhausting rock challenge in Western Australia into manufacturing, a 12 months sooner than initially focused because it launched a definitive feasibility examine. 

Pilbara Minerals (ASX: PLS), one in all Australia’s high lithium miners, closed the 12 months by slashing its forecast for shipments as a result of a raft of points — from delays in commissioning and ramping up extra processing capability, to unplanned shutdowns and expert employee shortages.

#4 Chile combating again

Chile, which misplaced the crown because the world’s largest lithium producer to Australia in 2018, started staging a comeback. It opened in October a young for the exploration and manufacturing of 400,000 tonnes of lithium.

In solely a few weeks, 57 firms confirmed curiosity in new contracts, in keeping with official figures.

Albemarle (NYSE: ALB) and SQM (NYSE: SQM), the world’s no. 1 and a couple of lithium miners respectively, have already got operations in Chile’s north, which they plan to increase.

Chile is getting ready bidding guidelines out there to native and overseas companies for 5 quotas of 80,000 tonnes every. (Click on on graph for full size)

SQM targets to achieve a complete capability of 180,000 tonnes yearly subsequent 12 months, with whole manufacturing anticipated to attain 140,000 tonnes. These signify will increase of roughly 60,000 t/12 months and 40,000 t, respectively, from 2021.

Subsequent: 2018 déjà vu?

The rush to fulfill lithium demand may see a repeat of 2018 when a glut noticed the lithium worth crash, analysts predict.

Whereas miners are scurrying to increase capability, they’ll’t sustain with demand, so market tightness is prone to persist within the close to time period, they are saying.

Fitch Options goes even additional, predicting more and more massive deficits out to 2030 that might “deeply” alter the market’s dynamics.

“Lithium provide will face plenty of vulnerabilities, together with geographical focus at each the mining and refining degree, in addition to the restricted presence of established and huge mining gamers, which pose dangers to the challenge pipeline execution,” the consultancy mentioned in a December word. “Rising useful resource nationalism in key lithium markets may additionally hamper the event of recent tasks.”

Lithium demand is forecast to develop 25-35% a 12 months over the subsequent decade with a big provide demand deficit anticipated from the second half of this decade. (Click on on graph for full measurement)

Pilbara Minerals (ASX: PLS), one in all Australia’s high lithium miners, closed the 12 months slashing its forecast for shipments, which has additional exacerbated tight provide for the important thing battery steel. 

Some trade actors worry that climbing lithium costs may find yourself elevating prices for batteries and electrical autos, hampering the consumption of clean-energy sources at a time the world urgently wants them.

Consultants at UBS challenge that by 2030 the world might want to produce 2,700 GWh of lithium-ion batteries yearly to provide the EV trade. That’s 13 instances the quantity of battery energy used now, or “225 billion iPhone 11 batteries.” 

Most current suppliers are planning expansions. Albemarle’s MARBL three way partnership with Minerals Sources in Western Australia lately unveiled plans to restart one of many Wodgina mine’s three 250,000 mt/12 months processing traces in Q3 2022.

Livent (NYSE: LTHM) plans so as to add 5,000 mt of lithium hydroxide capability within the US by Q3 2022. It’s also including an preliminary 10,000 mt lithium carbonate in Argentina, though that is solely as a result of attain business manufacturing within the first quarter of 2023, with one other 10,000 mt to be added within the second part by the top of 2023.

New tasks also needs to begin up in 2022, together with Lithium Americas’ 40,000 tonnes/12 months carbonate Caucharí-Olaroz challenge in Argentina and Sigma Lithium’s 330,000 t/12 months spodumene challenge in Brazil.

Lithium Americas can be growing the Thacker Move lithium mine in Nevada, although that challenge has confronted authorized setbacks. The corporate is predicted to publish a definitive feasibility examine on Thacker Move subsequent 12 months.

New techs, zero-carbon and nationwide safety

The ongoing improvement of recent lithium extraction strategies may enhance main provide of lithium. The upcoming improvement of lithium recycling and uncertainties round its timeline may additionally shock the upside provide expectations, consultants agree.

We are able to additionally anticipate new actors to strengthen their place available in the market, significantly European ones.

The European Fee added lithium to its listing of vital uncooked supplies for the primary time in 2020, signifying its shift to the forefront of consideration.

Portugal is at the moment the continent’s largest lithium producer, accounting for 1.6% of worldwide manufacturing in 2019, nevertheless the nation’s lithium just isn’t marketed to the auto sector, however to ceramics and glassware makers.

Savannah Sources (AIM: SAV) is forging forward with its Mina do Barroso proposed lithium mine in Portugal and it plans to quickly publish a definitive feasibility examine for the challenge. 

The Mina do Barroso challenge is ready to be Europe’s first important producer of spodumene, a hard-rock type of lithium. (Picture courtesy of ASMAA | YouTube.)

Erris Sources (LON: ERIS) is engaged on the Zinnwald challenge, in Germany, positioned within the coronary heart of Europe’s chemical and automobile industries.

Vulcan Vitality Sources (ASX: VUL), backed partially by Australian investor Gina Rinehart’s Hancock Prospecting, is aiming to provide the world’s first “zero-carbon lithium” from what it considers to be Europe’s largest lithium useful resource within the Higher Rhine Valley of Germany.

The corporate has in latest weeks signed lithium provide agreements with a number of European automakers, together with Volkswagen, Stellantis and Renault. It goals to begin commercially producing lithium by 2024.

An Worldwide Vitality Company (IEA) report revealed in Might beneficial governments to begin stockpiling battery metals, noting that lithium demand may enhance 40-fold within the subsequent 20 years. IEA government director Fatih Birol mentioned this may develop into an “vitality safety” difficulty.  

(With recordsdata from Reuters and Bloomberg)

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Written by colin


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