World faces shortage of lithium for electric vehicle batteries

Source: Reuters

Lithium is in hot demand due to rapidly growing production of electric vehicles that use lithium-ion batteries, but there is a global supply shortage of the metal, with western countries racing to bring on new mines to compete with China.

The Serbian government on Thursday cancelled licenses for a major lithium project owned by Anglo-Australian miner Rio Tinto Plc, which industry experts said is likely to prolong the supply shortage to mid-decade.

Following are some key facts on major mines and lithium supply based on data from Australia's Department of Industry, the U.S. Geological Survey, company reports and a Credit Suisse report.

PRODUCTION

Lithium is currently produced from hard rock or brine mines. Australia is the world's biggest supplier, with production from hard rock mines. Argentina, Chile and China is mainly producing it from salt lakes.

Total global production, measured as lithium carbonate equivalent, was forecast in December at 485,000 tonnes in 2021, growing to 615,000 tonnes in 2022 and 821,000 tonnes in 2023, according to Australia's Department of Industry.

Credit Suisse analysts are more conservative, seeing 2022 output at 588,000 tonnes, and 2023 at 736,000 tonnes, and forecast demand outpacing supply growth, with demand at 689,000 tonnes in 2022 and 902,000 tonnes in 2023, with about two-thirds of that for electric vehicle batteries.

LITHIUM PRICES

Lithium carbonate prices have rocketed to record highs over the past year due to strong demand from Chinese battery makers.

Global top 10 producer Allkem said on Jan. 18 it expects pricing in the half-year to June to jump to around $20,000 a tonne at point of loading, up about 80% from the half-year to December 2021.

WORLD'S BIGGEST MINES

Greenbushes, Western Australia, Talison Lithium (a joint venture of Tianqi Lithium, IGO and Albemarle Corp. Current production capacity at 1.34 million tonnes a year of chemical-grade and technical-grade lithium concentrate.

Pilgangoora, Western Australia, owned by Pilbara Minerals, expects to produced 400,000-450,000 tonnes of spodumene concentrate in the year to June 2022.

Mt Cattlin, Western Australia, owned by Allkem, the company formed from the merger of Orocobre and Galaxy Resources, produced 230,065 tonnes of spodumene concentrate in 2021.

Mibra, Minas Gerais, Brazil, owned by Advanced Metallurgical Group, producing 90,000 tonnes a year of spodumene.

Mount Marion, Western Australia, owned by Mineral Resources Ltd, is on track to produce 450,000-475,000 tonnes of spodumene in the year to June 2022.

Salar de Atacama, Antofagasta, Chile, owned by Sociedad Quimica y Minera de Chile (SQM), producing 110,000 tons a year of lithium carbonate.

Chaerhan Lake Mine, in Qinghai, China, owned by Qinghai Salt Lake BYD Resources Development Co, 10,000 tonnes a year capacity of lithium carbonate

Yajiang Cuola Mine, Sichuan, China, owned by Tianqi Lithium, 10,000 tonnes a year capacity.