METALS 02 Feb 2021 | 18:33 UTC Pittsburgh Expect lithium supply...

• METALS
  
• 02 Feb 2021 | 18:33 UTC
  
• Pittsburgh

Expect lithium supply crunch by 2025 as EV market booms: Piedmont CEO

• 
  

• AuthorNick Lazzaro
• EditorRichard Rubin
• CommodityMetals
• TopicBattery Metals, Energy Transition

HIGHLIGHTS
Battery metal supply will fall behind 'vertical' EV demand
Car companies, government must promote lithium development
Preferences shifting to lithium hydroxide from domestic spodumene

Pittsburgh — Lithium supply will struggle to keep up with booming electric vehicle demand in the US and abroad over the next few years, and steps will need to be taken to incentivize additional production and exploration of the battery metal, according to Piedmont Lithium CEO Keith Phillips.​

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"When people talk about 20% EV penetration by 2025, there might be a zero chance that could happen because there is no way the raw material supply will be ready," Phillips said in an interview with S&P Global Platts.​

Phillips said he sees EV demand going "vertical" by 2025 as consumer sentiment drastically shifts away from traditional cars with internal combustion engines.​

"Everybody who wants to buy a car is going to want an electric car," he said. "Internal combustion cars will be inferior from a performance perspective, cost perspective and environmental perspective... it will be irrational for anyone to want to buy an internal combustion car."​

Car manufacturers will not be able to produce EVs at a rate that satisfies demand, and chemical companies will not be able to provide adequate amounts of lithium for batteries, according to Phillips.​

"Between the car companies and the government, there is going to have to be action taken to incentivize the production of these critical materials and the development of the assets -- not only those like ours that are already identified and quite advanced, but also the exploration to go find more," Phillips said. "There is probably enough lithium in the world in terms of quality projects that are being pursued to get us to about 10% or 15% EV penetration, but the resources haven't even been discovered yet to pass that."​

With its lone project -- vertically integrated spodumene-to-lithium hydroxide operation -- in North Carolina, Australia-based Piedmont is relocating its corporate headquarters to that US state. The company's spodumene concentrate mine operation and lithium hydroxide plant are expected to potentially come online within the next two to three years.​

Piedmont plans to produce 160,000 mt/year of spodumene concentrate and 22,700 mt/year of lithium hydroxide once operations begin.​

Spodumene-to-hydroxide supply brings advantage

Phillips said many battery and automotive customers are increasingly requesting lithium hydroxide over lithium carbonate as the chemistry of choice for EV applications. Furthermore, some vehicle manufacturers prefer spodumene as a raw material supply feed for lithium extraction as opposed to other sources, he added.​

"There is still very much a market for carbonate and that market will grow, but it won't grow as fast as hydroxide," he said. "Many customers have also expressed very clearly to us their preference for spodumene as a feedstock for hydroxide relative to other materials like brine or clay or anything else. BMW and Volkswagen have quite publicly stated that from a sustainability perspective."​

Piedmont entered a deal in September 2020 to supply Tesla with spodumene concentrate for an initial five-year period starting between July 2022 and July 2023. The deal covers about one-third of Piedmont's planned 160,000 mt/year spodumene output.​

Phillips said spodumene-based lithium operations have greater potential for commercial scalability, and many current projects are located in geopolitically stable regions with suitable infrastructure.​

Conversely, some other global operations obtain lithium from brine or have recently discussed extracting lithium from clay deposits. Phillips added that brine sources tend to be in difficult locations that lack adequate infrastructure, and production of lithium from clay deposits has not yet been commercially proven.​