The push for electric vehicles (EVs) by governments around the world in order to meet low carbon emission targets has put lithium in the spotlight. Lithium is the main metal composing lithium-ion batteries, which power electric cars, among many other devices.
The global lithium-ion battery market has been valued at $ 24.5 billion and is projected to grow to $ 56 billion by 2024, driven mainly by increased demand for batteries for smart devices and electric cars. Bloomberg reports that there is a “wave of planned new lithium-ion factories” coming over the next five years, from factories in China, the U.S., Thailand — and other locations around the world.
Even though electric cars still represent a small portion of the total automotive market in the US, data from IHS Markit showed that there were 208,000 new registrations for electric vehicles in the U.S. last year: more than double the number filed in 2017. The numbers are set to keep growing as more EVs enter the market and EV owners stick with the technology.
In China, the market is also heating up: the number of EVs sold in China reached 254,000 in Q1 2019, a 118% year-over-year jump from Q1 2018. The spike in sales is a result of the Chinese government’s incentives towards electric cars.
In order to meet the demand, lithium-ion battery capacity must follow the needs of the market. Over the Q1 2019, the global capacity of lithium-ion battery factories has increased sharply. According to CleanTechnica, planned annual battery output by 2023 has crossed 1,000 GWh of capacity, with more than 70% of that capacity in China.
This means that there is enough global lithium-ion production capacity in the pipeline to supply over 21 million EVs each year (around 25% of the global vehicle market) by 2023.
Lithium prices in downslope — but that’s good news
The lithium price peaked in 2018, signalling the hype and over-expectation around EVs. Over the past months it has slowly decreased, although it still remains higher than in 2016 and 2017.
The decrease in price does not necessarily mean bad news, analysts believe. It can be positive because it means the metal is more accessible. “It’s a very versatile technology, so every time it gets cheaper, that opens up more demand segments for it,’’ said Logan Goldie-Scot, head of energy storage research at BloombergNEF. If the price drop continues, it will very likely open markets for new and improved use of lithium in batteries.
In a secondary benefit, the growth in lithium-ion battery production has spurred the market for other secondary minerals, such as graphite, as well as some precious metals like palladium.
Mining experts expect lithium producers to continue to boost output to meet growing demand. They anticipate global lithium supply to reach 363,000 tonnes per year of lithium-carbonate equivalent (LCE) in 2019. They also expect global lithium demand to grow to at least 1.1 million tonnes per year of LCE by 2025.
Christopher Perrella, an analyst at Bloomberg Intelligence, says that “lithium prices are stabilising now”, which opens up opportunities for new players: “A good chunk of the easily accessible, most economic lithium has already been extracted, so there’s going to be a need for small-scale greenfield projects going forward,” he added.
This week, on our TV Show Financial Fox @_FinancialFox , we will speak to one of the best-known international mining experts, Mickey Fulp, AKA The Mercenary Geologist @mercenarygeo and also discuss about latest technologies development for lithium mining project with Enrico Di Cesare, VP, Metallurgy & Director of St-Georges Eco Mining @StGeorgesPlat
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