How do you put a price on lithium?
That’s the question the London Metal Exchange has been grappling with lately in conjunction with partner Fastmarkets as it attempts to put together some sort of benchmark contract that will be both meaningful and useful.
Whether it will be successful or not remains to be seen, as the lithium market is a complex one in terms both of product and pricing.
Many battery types
There are several different battery types, including lithium cobalt oxide, lithium manganese oxide, lithium iron phosphate, lithium nickel manganese cobalt oxide, lithium nickel cobalt aluminium oxide, and lithium titanate. And within those battery types there can be subdivisions and new refinements.
Nickel Manganese (NMC) batteries are the ones favoured by the electric vehicle industry as they have very low self-heating levels.
To date the standard NMC battery has been the 111 battery, with the digits in that number referring to the ratio of each metal used in the battery.
But partly to minimise the use of cobalt, which has become more expensive of late due to supply chain problems, and partly because it can deliver even greater energy density, a new type of NMC battery is now entering into the picture, the 811.
Enter lithium hydroxide
Why?
Because the 811 batteries require lithium hydroxide as their main input rather than the more standard lithium carbonate used elsewhere.
Ioneerhas verified that battery-grade lithium hydroxide can be successfully produced from Rhyolite Ridge ore using standard commercial processes.
811 batteries require lithium hydroxide as their main input rather than the more standard lithium carbonate used elsewhere.Other global projects will be too small to justify the additional expense of hydroxide plants, and will most likely end up shipping concentrate to China.
But the ones with scale are likely to benefit from adding additional processing capability, as lithium hydroxide adds a considerable premium to the pricing.
Ioneer is covering all bases in my opinion and we may be negotiating with more than one Offtake partner, for different markets and supply chains.
$0.45 is completely realistic at this time considering that INRs price has the global lithium price slump somewhat illusory already factored into its price with a drop from fairly recent highs at around $0.50, and because China's spot price does not exclusively set the value of individual global Lithium plays due to the array of different Lithium demands spread across various industry.
Do your own fact checking and research.
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