Ok, given a lot of this discussion has eventuated from an earlier post than mine,it is probably best to start from the beginning of my thoughts - for those who want to get straight to my thoughts as it relate sto AJM go to section 3 below
1. Battery specs and is it hydroxide or carbonate input:
Here are the specs for battery grade lithium carbonate and Fe is in PPM terms at 10 or essentially 0.001%,with LiCO3 been 99.5%:
http://palith.com/english/product/index.php?act=&sid=23
For hydroxide battery grade impurities need to be less:
https://livent.com/wp-content/uploads/2018/09/QS-PDS-1021-r3.pdf
The specs for hydroxide are tougher than carbonate is the point so when it comes to cost estimates between brines and hard rock plays well it does boil down to meeting the specs of hydroxide as not all hard rock or brines can get there at a reasonable cost. For hard rock the ones that are likely to get there are the deposits that are high grade and have low impurities in a vertically intergrated concept. The continued move to NCM (and NCA) IMO is going to clearly accelerate the process of hydroxide been required in battery chemistries, because it is these battery types that are the basis of increased hydroxide needs. This article sums that up well and I'll just take this quote from it -
https://www.argusmedia.com/en/news/1836977-lithium-hydroxide-demand-to-overtake-carbonate-aabc:
"
But the higher nickel content in NCM cathodes can present challenges in terms of chemical stability. If the metals are used in a ratio of six parts nickel to two parts cobalt and two parts manganese (6-2-2), or 8-1-1, rather than 1-1-1 or 5-3-2 as in the past, the chemistry requires lithium hydroxide rather than lithium carbonate. Cathodes using an 8-1-1 ratio are some way from commercial viability, owing to safety problems with the chemistry, delegates heard.....As nickel content approaches 60pc, the higher temperature required to synthesise cathode material with lithium carbonate damages the crystal structure of the cathode and changes the oxidation state of the nickel metal. But lithium hydroxide allows rapid and complete synthesis at lower temperatures, increasing the performance and lifespan of the battery, said Marina Yakovleva, global commercial manager for new product and technology development at lithium producer Livent."
Without hydroxide all hard rock plays will be
possibly done and dusted (but see SSB comments below) is my point, because if the battery type doesn't require hydroxide (but carbonate) well that is certainly the domain of brines.
Solid State Batteries - impact on forecasts and hard rock supply
Solid State Batteries will, from my understanding, require a lithium carbonate input, but not the type of lithium carbonate people may think. The key is not about comparing carbonate or hydroxide here in the now IMO, because IMO SSBs are going to be about controlling the impurities, because conceptually SSBs are going to need very very low impurities (probably of the scale and better of those of technical grade applications in the higher end markets you see for lithium per se). If others have comments please share as a debate worth having at some point.
The idea behind solid state batteries is to increase energy density in a battery, meaning you have smaller batteries but having a higher range. To increase energy density IMO means the battery has to be more pure, meaning the impurities in the battery would need to be less than those associated even with hydroxide or else the charge in the battery and release of energy is adversely impacted. Hence some of the comments you read that SSBs can be potentially unstable IMO. With solid state batteries you are also relying on a solid, possibly polymer, metal electrolyte instead of a liquid electrolyte and replacing graphite in the anode as well.
That is, higher density and efficiency means lower impurities and differing cost structures because the smaller a battery gets but gives you the same bang, the more unstable the battery can become if its pureness is not increased IMO etc etc. In other words, I suspect SSBs (and the carbonate input) are going to need impurity levels within the scope of higher end technical grade carbonate (TG) applications (which is what you use in say glass and high end use where impurities are low) - hence my comment around cost and that these batteries will probably be used in the higher performance end markets, whilst NCA and NCM batteries will remain the predominant battery types for ordinary consumers of EVs. Chemical grade (CG) lithium carbonate is what you currently use in batteries, albeit in effect converted to hydroxide for NCA and NCM battery types, but the difference between TG and CG is essentially simply impurity levels.
2. Spodumene versus brine in hydroxide production
If you go back to my post above in this thread, I don't really comment on cost competitiveness between brine and hard rock. Lets get the sentence up in that post:
"
Without going over to much old ground,for hard rock you can go from ore to hydroxide in a single process, whilst for brines you need to produce carbonate then hydroxide. This is where hard rock competes well with brines, so pricing for hard rock needs to follow the hydroxide price IMO."
A couple of aspects:
1. If it is solely based on cost competition, yes hydroxide from hard rock is cheaper than hydroxide from brines when you are vertically intergrated- i.e. what Greenbushes is proposing to do and the former KDR in selling (some or all only) hydroxide ultimately from spodumene inputs.
The cost of producing lithium hydroxide monohydrate is less for hardrock than for brine if you are vertically intergrated especially, simply because for hard rock the process is 'one stop' shop process whereas for brine you need two separate processes, hence the higher costs (the first process for brine is producing lithium carbonate and then inputting lithium carbonate into your hydroxide process to produce your lithium hydroxide monohydrate). In terms of the chart above, be mindful the costs are the processing costs and to get to total costs you need the actual costs of the feedstock (for hard rock in producing lithium hydroxide monohydrate process, been the price of spodumene needs to be added to the numbers to get to total costs).
2. If you are not vertically intergrated, whether a not-vertically intergrated hydroxide producer is cheaper than a vertically intergrated brine producer is dependent on the price of spodumene feedstock purchased plus the cost of energy for that hydroxide producer. There are 6.5 tonnes of 6% grade spodumene required to produce 1 tonne of lithium hydroxide monohydrate. You need 7.5 tonnes of spodumene concentrate equivalent process (i.e. need to convert brines to spodumene equivalent to get full flavour of comment here but this difference can be dealt with anyway at the brine level IMO) to produce 1 tonne lithium carbonate btw (hence also stressing why the one shop process can, note it doesn't mean it is if you are not vertically intergrated, be cheaper as well). Note - if you are not a vertically intergrated 'brine' hydroxide producer the same applies, because you are selling carbonate to the converters, which a lot of brine plays also do.
A lot of energy is required to produce one tonne of hydroxide, and personally its a disgrace that we export LNG in Australia to China at a lower price than the raw gas (since you don't have to freeze it) is priced into the Western Australian (and Australian market). This comment os more for the HC Politics Thread btw. WA is addressing this with its domestic gas reservation policy and overtime I expect more hydroxide facilities been built in WA. You'd be surprised how much energy is needed to produce one tonne of hydroxide - Post #:
40107095 Each tonne of hydroxide is equivalent to my household electricity use per year is my point.
3. At the end of the day there are other factors - speed of production and speed of ramp up. Obviously brines take longer to produce hence why hard rock is better placed than brines in a growing market (which isn't a cost competition criteria at all but a timing one).
4. Quality specifications - all deposits need to be assessed on their own merits but ultimately it seems currently spodumene is easier to work with to get to the quality specifications of lithium hydroxide IMO. That doesn't mean brines cannot be used to go to hydroxide, but ultimately it is about deleterious elements and whether you can produce the feedstock in the right specifications for the downstream hydroxide market. Not all brines and spodumene resources can be converted to hydroxide at reasonable cost to market prices, or because of deleterious elements to do so would lose so much of the feedstock that producing carbonate is a better course of action (meaning also that carbonate is not used in the hydroxide market is my point and obviously attains a lower price)
3. China
My view is we need more hydroxide chemical conversion process done outside China, and obviously need such converters been established in Europe, and also production of EVs outside of China as well. That provides the contestability in the market to keep China honest. My personal view is whilst China continues to be vertically intergrated in the production of lithium chemicals and then in the production of EVs, it can screw over (brines and hard rock) suppliers. For commodities where China is the main customer it can control prices is my point through government/collusion aspects. Vanadium is another classic example of this IMO - Post #:
45496906
Turning to AJM, IMO, as I posted here, the floor price is no longer received. The question is is AJM EBIT/DA positive to finance the interest repayments. That is a question for the quarterly, but all I will say, is I doubt China will let AJM die because ultimately low prices of spodumene mean mines are not been developed given capex costs and the type ofinput spodumene price needed to justify a NPV/IRR that allows projects to proceed (i.e if you look at recent feasibility studies of some of the prospective greenfields projects they are using prices of US$600 per tonne to US$700 per tonne in those feasibility studies - using a price of say less than US$500 per tonne would make those projects marginal or unfeasible, but some will still begoers, but obviously lower prices mean the market for EVs is not growing by as much as people think either is my point, and that is not in anyone's interests, meaning any prospective greenfields projects will have timelines for market entry shifted to the right).
Ultimately with Europe targeting EVs as well in recent government stimulus announcements, and I suspect also targeting the lithium chemicals market, the situation will reverse. It is just a question of whether AJM is on the other side, and time will tell.
That is the risk here - definately a long term future, just a question of whether we continue to be SHs of AJM. Early morning spiel, so apologies
Time will tell
All IMO IMO IMO
(20min delay)