I believe that in 2015 we will have electric cars using lithium ion batteries. You can check (Shai Agassi,Yi Cui,Martin Eberhard, Jan-Olaf Willums ).It means that the demand for lithium ion batteries and lithium will be much,much higher.
The lithium market can be divided between lithium chemicals (sourced from brines or minerals), which account for some 80% of total consumption, and lithium minerals consumed directly. These market shares have almost reversed since SQM entered the lithium carbonate market in 1996.
Reflecting growth in demand, world lithium production is estimated to have increased by some 4%py between 2002 and 2005. The industry is characterised by a high degree of concentration of production, with two countries a' Chile and Australia a' together accounting for nearly two-thirds of world output and for most of the growth in production in the mid-2000s.
Sons of Gwalia in Australia produces some 60% of world output of lithium minerals (as spodumene) from Greenbushes hard rock deposit, with output estimated at 120,000t (gross weight) in 2005. SQM of Chile, with shipments of 27,800t lithium carbonate in 2005, accounted for 36% of world production. This share will increase in 2008, following the company's planned expansion in production capacity to 40,000tpy.
An interesting feature of world lithium production is the potential emergence of China as a leading supplier. The development of technology to extract lithium from high-magnesium brines has led to the start of lithium carbonate production from salt lakes in Qinghai and Tibet provinces. In late 2005, CITIC Guorun began construction of a 35,000tpy lithium carbonate plant to exploit lithium reserves in Xitai Ginar salt lake in Qinghai province. Production was scheduled to start in 2006.
Portable electronic consumer products will remain the main area of growth for secondary batteries through 2010, with shipments to the Asian cellular phone market alone estimated to rise by 50%py and growth rates in Russia and Poland reaching 70%py. Longer-term growth will depend on the market penetration achieved by hybrid electric vehicles and on the commercialisation of safe and cost-effective lithium batteries to power them.
Demand for lithium has shown strong growth in the mid-2000s, with world consumption estimated to have increased by 4-5%py since 2002 to reach a record level close to 80,000t lithium carbonate equivalent (LCE) in 2005. This increase has been led by higher demand for lithium carbonate in secondary batteries. In 2005, batteries accounted for 20% of total lithium consumption, more than double the 9% share held in 2000. Growth in the use of lithium secondary batteries has been driven by the rapid expansion in the portable consumer electronics sector. By 2005, nearly all mobile phones and over 90% of laptop computers incorporated lithium-based secondary batteries due to their higher energy density and lighter weight than nickel-cadmium and nickel-metal hydride products. Driven by demand from the battery market and higher production costs, lithium carbonate prices began to recover in 2003, and the upturn gained pace through 2006. Tight supply was reflected in a 20% rise in Chilean lithium carbonate prices in 2005, while SQM reported that in the first quarter of 2006, prices were 40% higher than in the same period of 2005.
How much do we have in the ground?
The main players are:
NYSE:SQM; NYSE:FMC (FMC Lithium); Chemetall GmbH is part of Rockwood Holdings, Inc. (NYSE:ROC) ASX:ADY Admiralty Resources NL
China:CITIC Guoan hold a large stake in MGL, the largest Chinese manufacturer of LiCoOx cathodes for LiIon batteries.
Sons of Gwalia Ltd has been in administration since September 2004.
ADY Price at posting:
0.0¢ Sentiment: Buy Disclosure: Held
