Yes, the demand is going to be incredibly high. There are too many areas for lithium battery applications. They are all being researched and developed atm. We haven't even look at the truck and bus (heavy vehicles) market yet. It's going to be huge as well. LGES is making a lot of work in that area as well.
My main idea is that Chinese is doing a big mistake by pushing the lithium price down to very low levels. That causes no new investment in the lithium sources, even the planned brownfield investments to be canceled.
The Chinese lithium resources are nothing in comparison to the very big demand coming very soon. The Chinese is being very greedy on this matter but will have to pay the price. They have a short term strategy in lithium sector.
If they let the lithium price to float around the incentive price level which is around US$1500/t, than the new projects will be online between 2025 and 2030. That'd be the best solution for Chinse. Then the lithium price would not go very high (over US$4000/t) again as there will be a lot of producer around.
They make money today, yes, by subsidising the 20% of supply (from their own resource) for buying the 80% (from overseas) very cheap. But they will have to pay at least 4 times higher price for the lithium for coming years, because the demand is going over the roof. That's stupid IMO.
This is a very comprehensive report. A true masterpiece research with very good comments. IEA is the only unbiased and most credible institution for me. I always read their report.
I recommend everyone to download and read it. It's 282 pages. Every page has very important facts. I'm again working on it to find the good point for posting here.
Now look at these graphics below (from IEA report). This is very much related why China is playing with the fire.
Mining concentration geographically concentrated out of China. China has a little ownership over the assets as well.
As I said before China can't even own assets in the countries which major lithium resources located like Australia, Canada, the US and Mexico now.
In all of the other countries around the world (excluding Argentina and Brasil for now) the governments take a big share of the projects including, all African countries, Chile, Bolivia, etc)
African countries; DRC, Mali, Nigeria and Zimbabwe; the governments all take 35% to 39% of all projects as well.
Chile and Bolivia are both take the 51% of the share and control in the new projects.
This is important now; In Chile, SQM's licence agreement for Atacama (the largest and lowest cost brine project in the world, production is around 170kt-200kt pa) was set to end on Dec.31,2030 however SQM and Gov. company Codelco have entered into a public-private partnership agreement that extends SQM’s operational rights in Atacama until 2060, with operations starting in 2025. Under this partnership, Codelco will hold a majority stake of 50% plus one share in the joint venture from its inception in 2025. This effectively grants Codelco majority control (51%) of the lithium project rights starting in 2025, not as a result of the lease expiration in 2030, but through the agreed-upon joint venture structure. The partnership has two phases: from 2025 to 2030, SQM will manage operations, and from 2031 to 2060, Codelco will oversee general management. (I think this is pending now for regulatory approvals and indigenous consultations).
That is important because SQM is the company which pushes the lithium prices down if you have already saw what Ken Hoffman said on the Rock Stock Channel YouTube video. It's not unexpected because Chinese Tianqi holds 23.77% of SQM. However when Codelco takes the 51% control, then it will not let the lithium carbonate sold at so cheap prices because the government will expect to receive money from this giant lithium project.
(Albemarle's licence agreement with the gov is much longer, it's valid until 2043. However it's production capacity is much smaller than SQM, around 70kt-80kt).
All of the governments, including Africans, will expect to receive money from all lithium projects. They will not accept small revenues due to cheap lithium prices.
Yes all governments which have share in the lithium project will expect to receive money from those lithium projects. And they will not accept small revenues due to cheap lithium prices. That is a fact. and it will show its effects soon. You will see the many of the African governments will start pushing Chinse for more (money) revenues.
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