This was so evident 2-3 years ago it’s ridiculous.
I worked on a bunch of projects in 16/17 and what I told all my clients is get to production and lock down offtake agreements ASAP as the amount of projects coming online was huge for the short term (with regards to hard rock lithium) and even worse long term (salars etc).
Even the most optimistic of ev adoption rates showed oversupply by 2023.
Some other facts I remember just as points of interest:
* lithium market is opaque. No open market and all contract based so very difficult to price.
* one major unknown that will further add to supply is recycling, with some tech I remember showing cost effective recycling of up to 80% of lithium.
* major bottleneck in short to medium term are the converters ability to refine. Premium will be placed on higher % Li product to increase recovery rates.
So yeah no surprising at all.
(Am a mining/mechanical engineer)
If you had to guess what will be the price of lithium once those big mines come online? 5000/ton Li2CO3 (at 99%) or even lower? And do you think there will ever be an open market with future contracts?
On the first question it’s been a while so haven’t really followed too closely, but once the salars come online depending on the agreements they have in place they really will have the ability to set the price to whatever they want (as they have been doing for past 3-4 decades). These hard rock mines are making serious money on the fact that the big 3/4 missed the boat (somehow) on the lithium/ev boom. I reckon they will be they will set production/prices to a point just below the number where hard rock equivalents are commercial.
With regard to opening the market I personally don’t think so. If the market didn’t have big players in it then yes it probably would have by now. That being said there were/are a lot of mid stage converters coming online that are disrupting the old guard and taking whatever is out there and not being secretive on pricing so maybe?
I remember looking at that project back in the day and couldn’t make the numbers work. Not sure if much has changed.
Firstly it’s an underground mine which is inherently much higher risk/cost compared to open cut.
Second logistically it’s a world away from customers (Asia etc)
Again if they had kicked it off back when, and were in production now they could have locked in some good terms from the starved customers and maybe set themselves up as a player, unfortunately I think they have missed the boat.
I'd that they don't have any measured resources on their list, it's half inferred and half indicated. So moderate uncertainty about everything down there.
Most markets are open, it’s the more exotic/specialist metals that are closed. With lithium it’s just the way it’s always been. Historically the market for lithium was industrial uses (lubrication etc) and there were only 3-4 big players that produced it (and often as byproduct of other processes). The big 3/4 companies would produce and often even refine it internally so no need to publish prices. The ev boom is obviously changing that, and they missed it somehow, hence the hard rock miners filling in the demand gap these next few years
I worked on a bunch of projects in 16/17 and what I told all my clients is get to production and lock down offtake agreements ASAP as the amount of projects coming online was huge for the short term (with regards to hard rock lithium) and even worse long term (salars etc).
Even the most optimistic of ev adoption rates showed oversupply by 2023.
Some other facts I remember just as points of interest:
* lithium market is opaque. No open market and all contract based so very difficult to price.
* one major unknown that will further add to supply is recycling, with some tech I remember showing cost effective recycling of up to 80% of lithium.
* major bottleneck in short to medium term are the converters ability to refine. Premium will be placed on higher % Li product to increase recovery rates.
So yeah no surprising at all. (Am a mining/mechanical engineer)