Lithium Processing Cost, Quality and Current Price: As with most...

Lithium Processing Cost, Quality and Current Price:

As with most commodities, Australia is likely to supply lithium to global markets. This is likely to come from the mining and processing of spodumene, a hard rock lithium-bearing mineral found in Western Australia and elsewhere.
spodumene mining was typically a more expensive but faster approach compared with the traditional sourcing of lithium, which is by extracting lithium-rich brine concentrate from beneath salt lakes.

By 2019, Australia is likely to produce close to 50% of the world’s lithium supply. Post 2019, the Talison JV will be set to soak up much of the additional requirement for the following few years, assuming a smooth ramp up in production from the plant.

In other words, the supply response, which has already started, will likely be enough to meet the demand in the medium term. Until 2019, lithium (spodumene) concentrate pricing is likely to remain relatively robust and existing producers and new entrants through 2017/2018 are best placed to take advantage of the current pricing to quickly reduce project debt.

Thereafter, the picture becomes less clear as further new spodumene entrants, brine project expansions and the potential for the new hydro-metallurgical processing techniques (L-Max®, Si-leach®, and others) that have the potential to produce battery grade chemical product at a fraction of the price of the established processing route, start to take effect. Prices for spodumene concentrate are predicted to fall from the current price of c. $950 per tonne to as low as $450 per tonne by 2019.