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Lithium market shifts focus to quality

Time:Wed, 20 Mar 2019 05:24:43 +0800

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The restructuring of the world's lithium industry is well underway, with the key dynamic now the quality of raw material that is made available for conversion into chemicals.
This is the view of Ken Brinsden, chief executive of Pilbara Minerals, one of the world's major hard rock lithium miners, which has four offtake agreements with Chinese and South Korean battery makers, automakers and conglomerates.
 
"The quality thresholds have got a lot higher and are going to get even higher over time. There has been a shift in the demand base — this is really not a commodity supply chain but a chemical supply chain," he told a battery metals conference in Perth, Western Australia (WA).
 
Drawing an analogy between the lithium industry and the iron ore industry — WA's biggest mining sector — he said the increase in lithium quality requirement is like telling an iron ore producer it has to suddenly start supplying 65pc grade iron ore when it is used to supplying 40-45pc grade product.
"This has caused a complete landscape change in the lithium supply industry and is redeploying capital to produce lithium hydroxide directly from hard rock lithium ore containing a minimum of 6pc lithium oxide," Brinsden said.
 
The first stage of Pilbara Minerals' Pilgangoora project is ramping up to output of 330,000 t/yr of lithium concentrate, rising to 800,000 t/yr and 1.2mn t/yr through the second and third stages. It will also produce 330,000-750,000 lbs/yr of tantalum.
Commenting on the hard rock lithium industry, he said supply is continuing to consolidate, especially in the Northern Pilbara region of WA which hosts three of the world's largest hard rock projects owned by Pilbara Minerals, Altura Mining and a joint venture between Mineral Resources and US-based Albermarle.
While lithium prices fell sharply in 2018, Brinsden believes prices have stabilised and could soon be bolstered by Chinese restocking of raw material.
"China is the dominant player in the market, but we see South Korea as becoming the major player in the non-Chinese battery supply chain, accounting for around 25pc of global capacity by 2028," he said.
 
"South Korea can provide the volumes, technology and quality to suit global original equipment manufacturers, so we believe it is the place for us to go."
Pilbara Minerals has an offtake agreement with South Korean conglomerate Posco and is considering becoming a joint-venture partner in a plant that will produce 40,000 t/yr of lithium carbonate equivalent for the battery market.
 
Australia has all the ingredients to become a significant force in the production of cathodes for electric vehicle and energy storage batteries but could not consider producing batteries as this will continue to be dominated by north Asian countries, Brinsden said.

Sources: Argus Media

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