Lithium still has a lot of life left, despite the latest drop in lithium prices, Tim Johnston, CEO of Canadian company Desert Lion Energy, tells Leon Louw, editor of African Mining, during an exclusive interview.
The recent contraction in pricing associated with the lithium spot market in China appears to have only moderately affected long term contract pricing as demand for lithium chemical remains strong and growing. This is according to Tim Johnston, CEO of Canadian company Desert Lion Energy.
Desert Lion Energy recently exported the first ever lithium shipment from Namibia, but its project is currently on the ice because the of the market conditions. African Mining visited the site last month as part of a road trip to Namibia.
“It is important to note that less than 10% of the worlds production is traded through the spot market. We remain confident that pricing conditions will improve in the second half of 2018 and early 2019, driven by strong underlying demand for battery chemicals,” says Johnston.
Johnston adds that demand for lithium chemicals has increased steadily in recent years, driven by growth in portable electronics, electric vehicles (EVs) and energy storage markets, with the battery sector accounting for about 46% of global lithium demand.
About 220 000t of lithium carbonate equivalent (LCE) was produced in 2017, of which 40% was sourced from hard rock, located mainly in China and Western Australia, with the remaining 60% sourced from brines located in South America.
“Lithium from hard rock and brine is expected to remain the dominant feedstock for downstream battery manufacturers. The battery industry will drive lithium demand in the next decade with market consensus compound annual growth rate (CAGR) of 12% to 14% per annum. Demand for lithium in other sectors, such as ceramics and pharmaceuticals, is expected to grow in line with global GDP at 3% a year (Albemarle Corp, 2018),” says Johnston.