Rising Chinese demand for lithium-ion batteries needed for electric vehicles and
energy storage is driving significant price gains and an asset boom in
Australia, already the world’s largest
lithium producer. The fast-developing hub is drawing investment and deals from global producers as well as
chemical-to-battery manufacturers in
China, the top consumer.
“There are serious companies investing and people are starting to lock up the biggest, long-life
resources. The question is -- who’s next?”
Simon Moores, managing director of
Benchmark Mineral said by phone from
London. Though on a smaller scale, “it’s a land grab like in the
petroleum industry when
BP,
Shell and others rounded on the
Middle East in the 1960s and 1970s,” he said.
Jiangxi
Ganfeng Lithium, which has interests in
projects in countries including
Ireland and
Argentina, holds about 43% of
Australia’s
Mt. Marion operation and in May agreed a supply and investment pact with Pilbara Minerals for a
mine development.
Battery maker Shaanxi J&R Optimum
Energyin July struck an agreement for future output from Altura
Mining’s
project.
“It’s the most significant expansion in lithium supply ever, and we are still undershooting demand,” said
Chris Reed, CEO of Neometals, a partner with
Ganfeng and Mineral
Resources in the
Mt. Marion operation. Reed is scheduled to speak Wednesday at the close of the three-day Diggers and Dealers
mining forum in
Kalgoorlie,
Western Australia.
Prices of lithium carbonate, the primary
base-chemicalproduced by the industry, more than doubled in the 5 years to 2016, according to UBS Group. The material advanced 9% to average $13 625 a metric ton in June from the previous month, on continued tight supply, even as Australian exports rise, according to
Benchmark Mineral.
“We don’t see any price fall in the next three years,” Benchmark’s Moores said. “When you look at all the battery plants being built and the plans for EVs, even if only about 25% of those are realized, we’re still going to be short of lithium. It’s a unique once-in-a-generation situation.”
WHAT A TIME TO BE ALIVE!!
(20min delay)