AVZ (ASX) Understanding lithium demand

Originally posted by Scarpa: ↑

Some updates - thought I would update this thread since I last posted here back in Feb (see post above).

Have posted in other threads elsewhere so thought may as well bring some of those posts where talk supply/demand back to this thread I started eons ago. I prefer to keep this thread as a general understanding demand and supply thread meaning leave the other discussions in other threads. Essentially this post is just a duplication of posts I have done elsewhere.

1. Understanding grade - why choose DMS only, DMS/Floatation or just WOF:

CXO is a DMS only operation and its issue is the recovery rate by and large which is less than 50%. The problem with CXO is that it has mis-forecast the mix of fines verses coarse spodumene and it is coarse spodumene that is a key to a DMS process and recovery rates.From CXO's latest quarterly, and obviously we know what happened after that which I feel for investors there:

A solution of specific gravity at 2 .9 works best, from those companies who have documented fully their METs works, to sink the spodumene and float the rest. A number of the deleterious elements have specific gravity less than 2.8 so need too ensure the solution has SG above that, but not significantly above that that does not sink spodumene (which has a specific gravity of above 3).

In the DMS process you crush and grind the specimens to the appropriate particle sizes you are seeking to the separate in the HLS solution. If you can’t liberate the spodumene appropriately then you are left with needing a floatation option to meet specs. And if can't liberate then the sink/float of HLS doesn't work appropriately.

For those interested a while ago I posted around the reasons why companies may chose various processes for producing spodumene concentrate (WOF/DMS/DMS-floatation). From this post I go through the choice process -Post #:54283727 Essentially, the choice between Whole of Floatation and DMS/floatation becomes one of i.) cost and/or product quality especially if wanting a higher grade product and/or ii.) what markets you are intending to target (Chemical Grade or Technical Grade or both CG and TG like Greenbushes does) and/or iii.) whether spodumene can easily be liberated from the lattice at the DMS stage.

But if you are seeking to produce product above say 6.5% Li20 you certainly are only going to be relying on WOF btw. Greenbushes itself has installed floatation units and produces some product types well above 6.5% Li20. But again grade is also king in been able to do this IMO.

Coarseness of spodumene, crystal size and how easily spodumene is removed from the lattice, is the key to DMS and if impurities are there and cannot be separated, because they cannot be separated in the DMS stage if the impurities are in the lattice of the spodumene itself btw, well floatation then becomes the only option btw, not grade been the decider as many are assuming btw.It has nothing to do with ore grade - it is about liberation.Difference is one is coarse product (DMS) and the other is fine spodumene concentrate (WOF). It makes no difference to the initial 1080 degrees roasting aspect of the subsequent process in producing LCE btw in your downstream converters."

What also helps recovery rates is grade of resource and low deleterious elements. The higher the grade the less tonnes required to get to 6% grade spodumene, and the lower deleterious elements in the resource the less cost to remove them to achieve spodumene concentrate specifications - referPost #:67888140

Example 1:
Li20 ore grade 1% - you will need to treat at 7.5 tonnes of ore, assuming an 80% recovery rate , to potentially get to 6% concentrate. But if say you have 1% Fe203 in the ore treated, which is a deleterious element, you also need to deal with the cumulative total of 7.5% F203 to get to a 0.8% F203 spec allowed in the spodumene chemical grade concentrate sold which comes at a cost and can impact your recovery rates.

Example 2:
Li20 ore grade 1.5% - you will need 5 tonnes of ore at a 80% recovery rate to produce 6% grade spodumene concentrate. Now if say you have 0.5% Fe203 in the ore, ou also need to deal with the cumulative total of 2.5% Fe203 to get to the allowable 0.8% F203 spec in chemical grade applications.

Clearly one is better off under example 2 than example 1 in terms of the ore they would like to have in their deposit. Moreso, the lower grade ore you have and higher deleterious elements means you might maximise your 'assumed profit' at possibly producing less than 6% grade spodumene concentrate as that is also where you can meet deleterious elements specs and have your best 'recovery' scenario.

2. Battery types and hydroxide:

The growing EV market requires a combination of all battery types, but range and energy density and km to recharge the key there is for NCM and NCA batteries and solid state batteries. If you are going to drive a car in the city for short trips then a car with a LFP battery will probably work best for you, longer range and need for higher speed well it will be another battery type. The graph below from benchmark shows what most are forecasting as battery types, but ultimately that can change as new technology emerges.
What Batteries Are Tesla Using In Its Electric Cars? (insideevs.com)

At the end of the day what makes hard rock competitive is battery type and the need for low impurities. Clearly hydroxide is the domain of hardrock, but even batteries that require carbonate can also be the domain of hard rock where those battery types will need low impurities. In terms of LFP they may remain to be the domain of brines, if that carbonate comes from Atacama IMO in particular - see below - IMO given those batteries are unlikely to need the level of 'good' lithium inputs - i.e. impurities don't have to be as strict as other battery types.

3. Direct Lithium Extraction (DLE) technology

On DLE, it is largely unproven technology IMO and is probably costlier than typical brine processes - with the difficulty in process is the fact that the 'input' is in varied concentrations, ranging from lithium to deleterious elements as it enters DLE and that is a problem in itself, although if they can ever get it to workat scaleit would be a good thing (assuming they can further improve on the ESG aspects of the production technique in terms of returning water to the water table). Background is here -Post #:49764761

The embedded post has this image, i.e. at a time comparisons were between Atacama and hard rock, and whilst the numbers may be outdated the relativities remain:

Treating brines is a two step process to hydroxide, whilst hard rock it is a one step process. Point of the above is that I suspect, even if DLE is proven at scale which will take time btw, it will produce carbonate and hydroxide at a greater cost, where comparison is to brines using evaporation techniques of extraction, and hard rock

A good article on pro and cons of DLE is this one:
Lithium Extraction Startup Landscape, role of direct lithium extraction (DLE) in energy transition. | by Anil Achyuta | TDK Ventures | Medium

4. Can hard rock also serve the carbonate market:

Hard rock is preferred for hydroxide, but with the issues around Atacama and water, I would also say that hard rock can also compete with brines in the carbonate market as well.

What keeps brine costs down in the Atacama is the potash credits, and yes Atacama can produce carbonate at a slightly lower cost than hard rock. I also feel that other brine deposits will be more costlier to produce given their magnesium levels, noting Atacama has its issues with water, but impurities are lower than most other brines (particularly magnesium). Posted on issues around potash credits/ magnesium a while back in this post, ad why a lot of brine deposits outside Atacama are not great. -Post #:44584547
So brines outside Atacama, i.e. those with high magnesium levels and deleterious elements, hard rock probably can certainly more than compete with them in the lithium carbonate space.

5. Why sulphate

Companies are now starting to look at sulphate as an intermediary option. This picture provides an understanding where Lithium Sulphate is produced -
referhttps://www.nemaskalithium.com/en/whabouchi/proprietary-processes/:

The lithium sulphate 'solution' step is at the beginning of the process flowsheet. Here is info on this issue and how it relates to the above pic in converting the lithium sulphate solution to hydroxide- defined in this patenthttps://patents.google.com/patent/CN1486931A/en:
"In the production process of lithium hydroxide monohydrate, lithium sulfate solution and caustic soda are made to produce metathetic reaction to form mixture solution of sodium sulfate and lithium hydroxide, and sodium sulfate and lithium hydroxide monohydrate are then separated by means of the obvious difference in low temperature solubility. The production process includes the following steps: adding sodium hydroxide into lithium sulfate solution obtained through serial production steps to obtain mixture solution of sodium sulfate and lithium hydroxide; cooling to minus 10 deg.c to 5 deg.c for the crystallization and separation of sodium sulfate; heating to concentrate the separated clear liquid; crystallization and separation to obtain coarse lithium hydroxide monohydrate product; water dissolving coarse lithium hydroxide monohydrate, adding barium hydroxide to form insoluble barium sulfate, filtering, concentrating filtrate, crystallizing to separate wet lithium hydroxide monohydrate; and drying."

Here is another pic:

This patents below also explain how lithium sulphate is converted to hydroxide.
https://patents.google.com/patent/WO2013159194A1

I note that power requirements are a key in producing hydroxide and I presume sulphate requires a slightly lower, but probably only marginally lower power requirement than hydroxide given it is produced after the 'energy intensive' calcination process, albeit hydroxide prices are higher than sulphate prices because hydroxide is still a more intense process. Some reasons why a company may agree to produce lithium sulphate:

1. Producing lithium sulphate broadens the end markets that the product can be sold into, but to this end all I will say is that the specifications for both lithium carbonate and the more important lithium hydroxide are very tight as it relates to battery grade chemistries:
https://www.albemarle.com/storage/components/T401260.PDF
https://livent.com/wp-content/uploads/2018/09/QS-PDS-1021-r3.pdf

2. Opex cost/water savings (refer back to flowsheets above) between the two. Wouldn't think this would be a key reason though.

3. Lithium hydroxide itself has a short shelf life if not used and/or stored correctly because of the oxidisation impact on hydroxide. If the hydroxide is not appropriately sealed it will be impacted by oxidisation, and I note a number of the hydroxide plants are located near your gigafactories, meaning it converts effectively back to a form of lithium carbonate in theory. But don't think this is a reason as transport systems in WA are very good.
https://science.howstuffworks.com/carbon-dioxide-eliminated-aboard-spacecraft.htm

4. Capex savings - obviously a sulphate plant costs less than a hydroxide plant. I suspect you can probably retrofit a hydroxide solution to the plant in time to accord with the above mentioned process flowsheets for moving to say hydroxide later on.

5. Have avenues to better target a downstream converter (and potential EV producer) who intends having hydroxide facilities close to their gigafactories and wants to ensure that the hydroxide is on spec.

In other words, whilst lithium hydroxide monohydrate provides the returns, sulphate provides the options but lower returns, but your lithium sulphate would sell at least 50% of the hydroxide monohydrate price - infact in the DFS I read a while back (both in LTR and AVZ) they were pricing sulphate around that level anyway - 50%.

6. Breaking China's dominance

This picture says it all - the need to break China's dominance in the market is a key. Clearly the FIRB decision IMO around Alita has that in mind IMO. I'll let others decide whether a move on AVZ is around China seeking to maintain its dominance in the market or whether Manono is another Simandou where politics takes over economic development. Please all, this is not a discussion in this thread as AVZ is littered with this type of commentary in all the other threads - I like to keep this as a research thread. Breaking China's dominance in the market will be a good thing for all.

7. Some conversions:1. Lithium sulphate monohydrate has a Li content of 10.85% - or roughly requires around 4.3 tonnes of 6% grade spodumene at a 90% recovery rate -https://www.convertunits.com/molarmass/Li2SO4.H2O. Or in other words around 3.4 tonnes of spodumene feedstock if producing lithium sulphate monohydrate 80%.

2. Lithium sulphate per se has a Li content of 12.626%. (Or about 5 tonnes of 6% grade spodumene concentrate at a 90% recovery) -https://www.convertunits.com/molarmass/Li2SO4.

3. Lithium hydroxide monohydrate (LioH.H20) has a Li content of 16.5%, so need about 6.5 tonnes of 6% grade spodumene at a 90% recovery rate. This is generally the 'hydroxide' price quoted at 56.5%.

All IMO

Expand

Some updates - thought I would update this thread since I last posted here back in very early Sept (see post above).

Have posted in other threads elsewhere so thought may as well bring some of those posts where talk supply/demand back to this thread I started eons ago. I prefer to keep this thread as a general understanding demand and supply thread meaning leave the other discussions in other threads. Essentially this post is just a duplication of posts I have done elsewhere.

McDermitt Calera
Some might remember a few weeks ago this deposit was state to be the largest in the world and will allow the USA to be self sufficient in meeting its lithium needs.
World's Largest Lithium Deposit Found in Nevada: Where Is It? (popularmechanics.com)Decided to look at this deposit at the time and below are some thoughts I posted in another thread. Lots of newspaper headlines at the time.

Here is a table on something already reported on the McDermitt Calera lithium -Extracting Lithium (911metallurgist.com)

The known here is that it is a clay deposit, possible some form of lacustrine sediment formation that needs further work to establish. The Li20 grade is ok - at about 0.36% - 0.64% Li (or about 0.78% Li20 - 1.37Li20), which is actually very good for a clay deposit, but iit s not a brine also, and the key is whether it can be treated viably to produce positive NPV/IRR. Noting the table istwo samples onlyand not indication of overall grade throughout the deposit.

The key around viability for clays is around the following:
1. Deleterious amounts in the clays and ease of extraction/separation.
2. Recovery rates.
3. Costs of extraction and amount of reagents to be used.
4. Grain size a key and variability of grain sizes in the resource which impacts recovery and capex costs in particular.

The above are specimens, and I note the UGPS states grade is more around the 0.3 Li mark for the depsoit itself, still very good for a clay deposit -Lithium in the McDermitt caldera, Nevada and Oregon (usgs.gov)

Ultimately clay is a new area of development and I'll just leave this paper up for others to form own views - the key to 2 and 3 above is actually 1 and 4, as clay deposits by the very nature they are formed vary between deposits andwithinthe same deposit - a good article IMO on McDermitt itself and some past tests:
Extracting Lithium (911metallurgist.com)

Now deleterious elements - well Mg, F and Fe are key deleterious elements here and they are very high. A case in point, Bolivia has the largest brine deposit but it is utterly useless given the Mg content in it - refer point 4Post #:69711272.

Whilst conceptual, attrition scrubbing could be a solution but the effectiveness of attrition scrubbing is also based on the shape of the grain size itself, as per below, so it is not as easy as one may think it is and application of this technology for clays still needs a lot of work. And grain sizes in clays differ which equates to cost. Or in other words recovery rates, given particle variability, are likely to be low without a significant improvement in technology.
Attrition Scrubbers (911metallurgist.com)

Implication is the sediment and makeup of clay grains, and they are not homogenous, which is pretty obvious given how the deposits form, so it will be interesting how resource variability issues and how that feeds into costs alone come through should anyone ever get access to those lands, let alone accessing it given its location and dealing with the 'spiritual' issues of such access, and how that impacts costs, especially removing deleterious elements, recovery and viability. This clay deposit is also a smevitie-illite clay, and that means variability in deleterious elements as well as grain sizes.

All IMO and probably looking at 10 years plus before this clay deposit comes on stream,if it comes on stream at all. A lot has to happen in the interim.

Energy storage
A lot of forecasts are given around EVs but not much is said around energy storage. Whilst for large scale batteries, these are probably the domain of vanadium, lithium will play IMO a key role in smaller scale battery storage systems and the household market. Having said that the Tesla battery in South Australia is quite large itself so it is clear lithium could operate on large scale battery storage projects (that many might presume like me may be the domain of vanadium). Further info on this view in Post #:51923932

The opening post in this thread provides details, as does a previous post of mine on this thread back in Feb 2023, around how much lithium is in a battery.

Assuming battery packs are in effect similar for energy storage systems - noting how the SA tesla battery works is in effect just more individual battery packs to form large scale storage system -All The Details On Tesla’s Giant Australian Battery (gizmodo.com.au)- then possibly use this as a guide below. If others have calcs for energy storage be interested myself as haven't looked at large scale energy storage itself which is going to be an important market as well etc. The Tesla battery is 100MW

a.) 100 MW installed capacity * 0.9 tonnes LCE per MW = 90 tonnes LCE = 675 tonnes of 6% grade spodumene.
b.) The lithium content in 100 MW assuming I have done this correctly = about 2,000 EVs assuming a battery size of 50kWh (you need 45kg of LCE for a 50kWh battery).

Sodium batteries
In other posts on this thread have yabbered other battery types. One I haven't posted on in this thread relates to sodium.

Akey to speed of an EV car is the weight of what you are pulling. Lithium is the 3rd element in the periodic table - only helium and hydrogen are lighter elements. So in totality if you are going to produce a battery it needs to be light - meaning higherenergy density per kg of battery material- whilst having good voltage and watt release to pull the vehicle weight. There is a reason lithium is used in batteries, in combination with other minerals, and weight is one, and the important other is potential for energy density per kg of battery material (as that contributes to a less weighter battery) in achieving speed etc.

Against this, the drawbacks of sodium batteries are several. In particular, they degrade quicker than lithium batteries. Sodium ions are also larger than lithium ions, and that cause a key issue around movement of sodium ions through the seperator in batteries ( larger size in the electrolyte essentially is an issue). It is why your sodium batteries are heavy, compared to lithium ion batteries.. Molecular weights in links below:

Refer:Molecular weight of Li (convertunits.com)andMolecular weight of Na (convertunits.com)
Sodium is 230% more heavier than Lithium and weight is an important issue when it comes to speed, noting lithium batteries have a higher energy density per kg of battery material currently to sodium batteries (and noting sodium batteries are also heavier than lithium batteries right now)

But here also the other crunch - the voltage of sodium batteries is around 2.7 volts, compared to about 3.7 for lithium ion batteries, meaning sodium has a slower recharge/discharge rates than lithium batteries, ultimately meaning they are not suitable for applications where a lot of power is required immediately for use - like EVs. Still conceptual and a lot of work still required.

Yes sodium is abundant, but a lot more research needs to go into sodium to make those batteries effective to lithium batteries, particularly dealing with energy density per kg of battery material and voltage which needs to really improve a lot to counterbalance the periodic table element weight issues as well, given sodium is a heavier element to lithium. Weight is a key to the efficiency of EV in maintaining speed comparable to ICE vehicles as well is my point. As well as needing to address degrade issues as well. Still very conceptual is my point.

Yes I know this update is probably a little more boring than previous updates on this thread, but I like to keep developments in one place when I yabber on other threads.

All IMO