LITHIUM FACTS $MMTE
Since the mid-1970s, lithium prices have seen steady growth as demand from technology and manufacturing industries also grew. Lithium has been in common use since the late 1940s, but has recently experienced a surge in price for its use in lithium-ion batteries, fuel efficient vehicles, heat transfer contacts in electronics (cell phones, computers, etc.), glass and ceramics production, aluminum hardening in aviation industries and many other industrial applications.
Fuelling this demand is the growth of the battery market segment. Roskill, the author of "Economics of Lithium", Eleventh Edition, 2009 believes that the major lithium growth sector will be in the battery market, and annual growth forecasts are approximately 14.4 percent between 2008 and 2013. Currently, portable consumer goods, such as cell phones and laptop computers, lead growth in the battery sector, but electric vehicle growth is expected to significantly increase in the future. Dr. Martin Hoelz, global automotive industry group leader and partner with Deloitte Germany estimates that by 2020, electrical vehicles and other green cars will represent up to a third of total global car sales in developed markets and up to 20 percent in urban areas of emerging markets. Annual electric vehicle sales in the United States have already increased from approximately 20,000 in 2000 to almost 350,000 in 2007, according to Roskill.
Electric vehicle market share in 2030
Notes: Assumes 55 million automobiles produced annually in 2030; *JP Morgan's estimate is by 2018; **TRU Group's estimate is by 2020
Source: Keith Evans Presentation at the 2010 Second Annual Lithium Supply & Markets Conference
Lithium Extraction Methods:
Lithium is not necessarily scarce as it is an abundant mineral in the Earth's crust and is considered to be the 33rd most frequently occurring mineral. Historically, the main method by which producers recovered lithium carbonate was from mining mineral deposits of spodumene in hardrock mining techniques. The increased global demand for lithium has begun to stress the traditional hard-rock mining of pegmatites containing the lithium bearing silicate spudomene. This traditional mining is time, energy and cost intensive.
Other types of deposits, such as brines, are quickly being developed to keep up with the demand. Lithium brine resources like Pastos Grandes acquired by New World Resource Corp., are now the preferred method of lithium recovery because of its efficiency and cost effectiveness. Litihum brines such as Pastos Grandes and the neighbouring salars in the lithium rich district of Sud Lipez, are quickly gaining attention as extremely cost effective and profitable ventures because of their simplicity and ease of recovery. Brines are waters containing a high concentration of dissolved salts and occur below the surface of dry lake beds, called salars, which have closed or restricted drainage basins where the evaporation rate is higher than the precipitation rate. These lithium rich brine deposits occur in closed basins in high evaporation environments where lithium will generally occur as a chloride or carbonate along with potassium and boron. Brines are pumped from a subsurface aquifer and through a series of evaporation ponds where the lithium chloride solution is allowed to concentrate. Soda ash is then added to precipitate a lithium carbonate free of any impurities before dried and shipped.
The richest lithium source currently being harvested is the Salar de Atacama basin located in the Atacama Desert in Chile. Chemetall and Chemical & Mining Company of Chile (NYSE: SQM) both obtain lithium product from its brine. The Bolivian Altiplano is host to many alkaline and saline lakes and salars including the Salar de Uyuni which hosts the world's largest known lithium reserve. Both the Salar de Rincon and Salar de Hombre Muerto are located in Argentina.
Though traded internationally, lithium it is not traded on the public market and is sold directly to end use markets for a negotiated price per tonne or pound of (Li, K)Cl or carbonate compounds. This makes price data difficult to confirm but some recent deals have reached $6,500USD/tonne for lithium carbonate, driven by high demand from end use buyers and relatively low global production
