Lithium a ‘critical’ metal?

Much has been said about the impending shortage of lithium to satisfy the future demand for the metal, and how new supply can only came from ‘us’ (‘us’ being whoever is making the sales pitch). We also read about current producers facing supply challenges, like for example Rockwood’s 20,000 tpa expansion “will take +2 years from approval to produce concentrated brine,” and that “demand expected to outstrip supply from 2017” (guess were I’m quoting from...)

Unfortunately, reality has the nasty habit of blowing bulldust away:

Just a few hours ago, Verónica Michelle Bachelet Jeria, the President of Chile, announced a new policy to stimulate Li production in Chile, the result of two years of evaluations and consultations on Li.

At the same time, Codelco and Corfo announced they have agreed to call an international tender for the development of the Salares of Maricunga and Pedernales - owned by Codelco.

And to cap it all, the Chilean government’s environmental authority issued a permit to Rockwood (Abermale) to expand production from 80 to 150 million cubic meters of brine per year which means Rockwood will increase production in Atacama from 24,000 to 44,000 tpa. The expansion is costed at US$ 750 million and the construction expected to last 24 months divided in two stages of 10 and 14 months each, with commissioning in 2018.

Lets’ not forget that (1) Rockwood has been in the Li business since 1933 and in Li brines since 1998 when they acquired Cyprus Foote, the company that first extracted Li from brines in Clayton Lake back in the 1960’s, so they know what they are doing, and (2) Codelco has the financial capacity for the relatively modest inversions (modest by Codelco’s standards) required for Li.

The Chinese curse interesting times. They are right. Another bubble bursted?

Enjoy Australia's Day

Cassandra, qui non crediderunt