The growth in demand for electric vehicles and the development of batteries for the technology sector has caught the attention of Chile, Australia and Argentina, the world’s major lithium producers.
With skyrocketing growth since 2014, it is estimated that the global demand for lithium will increase six to eight percent in the next decade, though that rate could double if announcements are true about an imminent shift from petrol-fuelled buses to electric buses, particularly in China.
“In the next five years we are going to continue to see sustained growth in global lithium consumption”, said David Klenecky, head of US firm Albermarle, one of the biggest producers of lithium, who was speaking at the mining fair Expomin in Santiago, Chile.
For Daniela Desormeaux, from the consultancy firm SignumBox, the demand for lithium could reach one million tones of lithium carbonate (LCE) by 2030, compared to 201,000 tonnes in 2016.
Chile, Australia and Argentina will continue to be the biggest players in the market, while Bolivia, which is still to confirm its resources at the salt flat Uyuni, also has high hopes.
BATTLE FOR LEADERSHIP
With the world’s biggest reserves — equivalent to 52 percent — Chile is up against Australia for the leadership of the lithium market, with both accounting for 40 percent each of global production.
Argentina, which in 2016 increased its production 58 percent, covers 15 percent of the total global production of lithium.
Unlike Chile, which extracts all its lithium from salt flats, Australia runs projects that extract the mineral from rocks.
According to the National Mining Commission (COCHILCO), Chile should double its production to 147,000 tonnes by 2021, from 77,000 in 2017, given the expansion of production at the Atacama salt flats. Projects there are run by the US firm Albermarle and Chilean firm SQM, the two sole producers in Chile, where lithium was declared a “strategic” resource as far back as 1979.
At the time, the risk associated with lithium was that it could be used for nuclear activity, meaning that the Chilean State was responsible for extraction projects through private contractors.
“The challenge is to return Chile to the top of lithium production worldwide”, Mining under-secretary Pablo Terrazas said. This could happen in the short term, analyists predict.
“In the last few months, we have seen important changes that will improve the viability of production expansion in Chile’s lithium sector, allowing for the recovery of its share of the market and giving it the chance to restore its traditional position as the biggest producer in the world”, Juan Carlos Guajardo, head of the consultancy firm Plusmining, told AFP.
Recently, SQM ended a long legal battle against the Chilean State which will allow it to increase its lithium production. Its US rival, Albermarle, received the same authorisation from the government to increase its production at the Atacama salt flats, an area with big potential given its high concentration of lithium, low levels of impurities and the possibility to extract byproducts like potassium.
Argentina has 40 salt flats in its territory, Mining Secretary Daniel Meilán said.
Toward 2022, Argentina hopes to surprass Chile and produce close to 331,000 tonnes of LCE lithium, according to Meilán, who estimates that in the same period the total production of lithium could reach 1,152,000 tonnes of LCE, a 443-percent increase compared to 2016.
Lithium — which is not traded like other minerals, instead its price is negotiated directly between producers and customers — has been used in batteries since the early 90s.
Since then, the development of the smart phone, tablet and computer markets, along with electric cars, has pushed the price of lithium up, especially from 2015 onward.
In the early 90s, lithium for use in batteries represented six percent of the total demand for the mineral. Today it is close to 40 percent. By 2021, according to Chile’s COCHILCO, it is estimated that 59 percent will be used in car batteries and electric products.
Currently, a smart phone uses between two to three grams of lithium, while a Tesla electric car uses 45 kilograms and an electric bus 240 kilograms.
“Lithium is a key mineral for energy storage. I think the price will continue to be high but it will converge on a slightly lower price than today’s because of the growth in supply”, said Juan Carlos Guajardo.
The price of lithium jumped from US$ 5,851 per tonne in 2015 to an average US$ 13,719 per tonne between January and Novemebr, 2017, according to COCHILCO.
AFP-Paulina Ambramovich (translated by the TIMES)