LITHIUM
The growth of lithium-ion battery power

Demand

The global demand for electric cars on the rise and the requirement for lithium in long-life batteries is accelerating. The lithium market is about to boom exponentially and the demand for lithium mining production is increasing significantly. Many automakers are forward thinking and going totally to manufacture electric vehicles as soon as 2019.

An electric car cannot be bought off the shelf as supply has not kept up with demand and there is as much as a 1 year waiting list for an electric car. Other than Elon Musk at Tesla (NY:TSLA), the rest of the industry did not see this demand coming or so much of it.

These are the reasons why demand for electric cars (EVs) is on the increase.

  • Conventional engine fossil fuel costs are high and electricity is by far a cheaper and a longer lasting alternative with all the advantages of a clean source of power.
  • Electric cars are mechanically much simpler with electric motors compared to combustion engines with added benefits of less noise and pollution, and more torque.
  • Technological advances in batteries is allowing them to hold power for a longer time period allowing cars to have an increasing range and the price of EVs has come down significantly.

The Big 3 and automakers around the world are ramping up EV production and the battery manufacturers are searching exhaustively for raw materials, particularly lithium.

The New Auto Industry Technology creating a huge demand for a handful of different metals, in particular for the lithium ion batteries. The Bloomberg chart below shows the projected demand and makes today's consumption of these metals minute.

demand surge for lithium

The Chart below forecasts the increase to Year 2022 of Battery costs

demand surge for lithium

This Electric dreams chart has no significance to Electric cars.

Read more about Lithium supply & demand. Lithium has been used in industry for quite some time and it is known as a key metal in its battery form.

The role lithium will play in the future.

Lithium isn't rare, rather the lithium market is under-developed in comparison to most other industrial commodities, leaving a value space for a select number of companies to find and develop economic lithium deposits. Lithium has many types of applications, from lubricating grease and glass fabrication, to glazes for ceramics, and most importantly, batteries. Lithium is predicted to continue to play an increasingly important role in the battery-powered clean air future for at least the next 20 years.

Lithium Geology - Hard-Rock to Brine Deposits

Lithium is present in a number of different minerals, but for those interested in commercial extraction, there are really only a few deposit types that are of interest.

Lithium Bearing Pegmatites

Pegmatites are commonly found throughout the world, but lithium-rich granite Lithium-Caesium-Tantalum (LCT) pegmatite intrusions are much less common, making up less than 1%. These type of ore bodies are the hard-rock source of lithium. The lithium minerals that occur in the LCT granite pegmatites are spodumene, apatite, lepidolite, tourmaline and amblygonite.

Spodumene is the most commonly occurring lithium hard-rock mineral and was once the main source of lithium metal globally. This has now been surpassed by lithium in brines which have become the largest contributor to lithium production.

Pegmatite Hard-Rock Processing

Lithium hard-rock recovery involves the following key steps: crushing of the ore, concentration by gravity and or froth flotation, to produce a lithium concentrate followed by hydrometallurgy and precipitation of a lithium chemical. This is typically lithium hydroxide or lithium carbonate, which can be sent to factories to be manufactured into its final form.

There are a few key points in evaluating a hard-rock lithium deposit:

  • Lithium Grade - Arguably the most important figure in any type of deposit. Typically, the higher the grade of lithium the more economical the deposit.
  • Lithium Mineralogy -typically spodumene is the highest-grade common lithium mineral and easiest to recover, other lithium minerals are likely to have problems
  • Lithium Metallurgy - how efficient is the metallurgical process to extract the lithium minerals, typically the coarser minerals the better.
  • By-Products - common value adding by-products include: tantalum, niobium, tin, beryllium and caesium are examples of profitable by-products of the refinement process.
  • Impurity Levels - High concentrations of impurities (non-profitable by-products) can lead to higher refinement costs and could limit their use in end use applications, such as glass and ceramics.
  • Location - Poor proximity to infrastructure can make a lithium project a lot less profitable.

Brines

Lithium brine deposits are accumulations of saline groundwater that are enriched in dissolved lithium. The brine is pumped up from the ground and placed into man-made ponds, where the lithium is concentrated via evaporation. Depending on the climate and weather in the region of the brine deposit, lithium concentration can take a few months to a year and typically, lithium concentrations range between 1 and 2%. Unlike their hard-rock cousins, these concentrations can be sent to processing plants for end-use production.

Lithium brine deposits have a number of characteristics:

  • Arid desert climates
  • Closed basin containing a playa or salar
  • Tectonically driven subsidence
  • Associated igneous or geothermal activity
  • Suitable lithium source-rocks
  • One or more aquifers
  • Sufficient time to concentrate a brine

There are number of things that are particularly important when evaluating a brine deposit:

  • Evaporation Rate - evaporation depends on the climate in which the deposit is located and occurs best in Chile, Argentina and China
  • Lithium Grade -the most important figure in any type of deposit.
  • By-Products - the primary by-product is potassium.
  • Location - poor proximity to infrastructure is important.
  • Impurity Levels - magnesium to lithium ratio and the sulphate to lithium ratio are very important as their separation is a major expense in refining. Ratios should be low

Lithium Supply

Lithium reserves are mainly concentrated in South America with approximately 66% of global reserves. 'The Lithium Triangle' refers to Chile, Argentina and Bolivia. Chile is the 2nd largest producer of lithium in the world and 1st in reserves. Reserves are held only in brine deposits in the deposits of The Salar de Atacama, which is located in the Antofagasta region. The Salar de Atacama is approximately 3,000 square kilometres and has an estimated 6.8 Mt of lithium reserves.

Argentina is the 3rd largest producer of lithium in the world and 3rd in reserves in brines. Bolivia currently makes up the smallest portion of The Lithium Triangle, and is thought to have the largest undeveloped lithium brine in the world, Salar de Uyuni.

China is the 4th largest producer of lithium in the world and 2nd in reserves. China's lithium deposits are found in hard-rock pegmatites and brines.

Australia is the largest producer of lithium in the world. Australia's lithium is held in hard-rock pegmatite deposits.

Lithium Demand

Lithium's demand is found in the following applications:

  • Batteries - the best-known lithium application and where the future lays for lithium demand.
  • Lubricant Grease - estimated 2.38-billion-pound market, with greases making up 75%. These have good stability, high temperature characteristics and water-resistance properties.
  • Glass - typically sourced from spodumene it reduces the viscosity and thermal expansion of glass providing substantial energy savings for glass manufacturers.
  • Ceramics –used in the ceramics industry to produce glazes. The glazes improve shock absorption and stain resistance of the ceramic piece, protecting it gainst damage.
  • Health Products - small amounts in various medicines

Batteries

Lithium provides the best combination of energy density (weight to power ratio) and price with current technology.

Currently, there are an estimated 80 different lithium-ion battery chemistries in production, with these varying chemistries all exhibiting different characteristics, such as capacity and voltage. Lithium is typically found in the cathode of the battery, commonly in the form of lithium cobalt oxide, while the electrolyte is commonly in the form of lithium salts. The anode material is commonly carbon-based, with graphite being the most popular.

Lithium ion battery's output is around 3.6 volts, which is more than twice as much as its alkaline cousin.

Source: Deutsche Bank Markets Research

Demand for 2025 is projected differently, not only in overall demand tonnage, but in the percentages each application encompasses. The future is expected to be bright for batteries in the non-traditional markets; electric cars, e-bikes, and energy storage.

Source: Deutsche Bank Markets Research