Lithium2 Apr 2018 17:10
We�re facing an imminent crisis in global lithium markets. Demand is growing exponentially, and lithium consumers are facing a 100,000-ton shortfall by 2025.
Traditional lithium brine projects take too long to put into production. At up to 48 months, they won�t be able to close the supply gap on their own.
The industry is turning to high grade, hard rock lithium pegmatite deposits.
We�re Nearing A Major Crisis Point In Lithium
Lithium is in the midst of an unprecedented boom. Since 2015, the price per ton has soared from $6,500 to over $20,000, and demand shows no signs of stopping.
In fact - with explosive demand growth for smartphones, EV�s and home storage batteries - we might soon hit the physical limits of our lithium supply chain.
According to reports - the crisis is about to get a lot worse.
Analysts at UBS Securities expect us to hit a critical milestone in 2018 - as electric cars finally hit cost parity with the internal combustion engine.
That event should trigger a wave of EV adoption across the globe.
Electric car batteries require a staggering amount of lithium to produce.
The Tesla (NASDAQ:TSLA) 70kWh Model S battery pack contains 63Kg of lithium, equivalent to the amount of lithium in 10,000 cellphones.
Oil major Total predicts we�ll see 20 million electric vehicle sales by 2030. That�s the lithium equivalent of building 200 billion iPhones.
That would require up to 1,200,000 tons of lithium, or 6x current global production.
Morningstar predicts a 100,000-ton annual shortfall in supply by 2025.
By 2030, today�s lithium prices might look incredibly cheap.
Global lithium supply is concentrated in relatively few locations. Lithium brine deposits in Argentina and Chile represent nearly 60 percent of global production.
These deposits are time consuming to put into production.
It can take 12-24 months to set up a facility. Then it takes another 12-24 months for the evaporative extraction process to produce usable lithium.
It may literally be impossible to scale up production in time.
Many Pegmatites are known to have much higher lithium concentrations than brines.
Unlike brine, high-grade lithium pegmatite can be processed into a higher quality battery-grade lithium hydroxide, where consumers like Tesla (NASDAQ:TSLA) are lining up to buy it. The low-grade lithium produced from brine operators produces a lower grade lithium carbonate which is far less valuable.
All of this makes the hard rock method much more attractive to battery manufacturers.
And, while hard rock lithium projects were once viewed as prohibitively expensive - they�ve become very lucrative at $20,000 per ton lithium sales prices.
Credit Suisse analyst John McNulty estimates �Lithium from minerals or ores costs about $4,200-4,500/tonne (�2,800-3,000/tonne) to produce.�
That could potentially deliver $15,800 per ton in gross pro
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