Lithium research relevant to KDR/SQM, page-266

Cheers @Sharpey for that - you certainly deserve a detailed response (some pre written -hope I stitched it together OK)

I'm a graduate Industrial Chemist, so have picked up a few things about Li - lol
I have noticed a few things about a lot of the information about the cost of converting lithium Carbonate (Li2CO3) to Lithium Hydroxide (LiOH or LiOH.H2O). Most of what I have seen is misleading as it assumes that the current processes are not reconfigured by the briners. So it is presented as if they have to produce Li2CO3 then go through an energy intensive process to produce LiOH from that substance. However that would be economic madness. If they reconfigure their process for LiOH without going via Li2CO3, then it could cost about the same to produce, maybe $200 more pt. The brine is already LiCl, which can react with NaOH (Sodium Hydroxide) to produce LiOH and NaCL (common table salt) then maybe separated by electrolysis using a separation membrane, and it should not be mistaken as being as expensive as producing Aluminum, as we are not producing a metal at 1000 c either, we are merely using the electricity to separate the two products. But I suspect there will be even cheaper ways to do this. Orocobre may not be willing to take the risk of trying something novel like this, but SQM will know how, as they have been dealing with LiCl for a long long time, and it is basic Chemistry - probably a 3 year project to develop and get right from scratch, which I would assume they will have already done 10 years ago. SQM have typically been making LiOH conc as a lubricant directly from LiCl. So the battery grade product they could make would (I assume) need to be purified more (as LiCl), and would also need to be dehydrated more.

So we are talking about an operating cost for SQM, of two or three thousand dollars per mt for LiOH.H20. I expect.

There is also a requirement for SQM to supply third parties with 25% of their Brine output in Chile. This is very cheap and much faster to produce for SQM than lithium Carbonate (which is an expensive wrong step anyway in this instance). So they could produce and concentrate (conc) this brine in tandem with Li2CO3 and LiOH and let other 3rd parties produce the battery grade LiOH, and even compete to have the best processes to do it. Tesla is arranging to deliver the brine conc to a battery factory in the US which Corfo has agreed to - I'm not sure of the timeline. I suspect the SQM will be raising their production of LiCl quickly as well, as they may be able to pump it directly out of their ponds into a tanker and send it on its way.

So the cost base for SQM and other briners will be far far lower than that of hard rock producers. The disadvantage of the brine is that they are hostage to weather events, and a storm (especially a "dirty one that drops lots of dust/dirt in the rain) can set production back a year or even 18 months I suspect.) These storms seem to happen every ten or twenty years. So hard rock Li is the perfect swing producer IMO, and that would be SQM's interest in Mt Holland which is a second tier deposit in hard rock terms (after the one and only Greenbushes).

The briner's supply can be massive and cheap - it just takes time to swing into action, and can be irregularly accident prone.

I suspect the demand for EV's is far lower than the market expects, as in the two instances where government subsidies dried up, sales of EV's died. They were in HK and Denmark - you can google these instances. If the demand is heavily dependent on government support, which I suspect it is, then we have massive assymetric downside here, as on balance consumers don't like them it seems, and for obvious reasons. The people who can afford them are mainly higher income earners, and it is not very politically palatable to subsidise cars for the rich. I suspect we are undergoing a temporary demand surge as car makers get their initial batch of cars made, and have spare material for the event they are successful. These companies are doing their best to take up options on future production, and obviously if they don't need to produce as many cars, then they can flip the Lithium if they are contracted for it.

I think we will not see things pan out as the market expects for the above reasons, and a few more I have become aware of as well, to do with Greeniness (like Truthiness), and the ongoing costs being high once you factor in battery replacements at TEsla etc mark-up prices.

Anyway - all IMO.