[SMM Flash News] DRC Lithium Hydroxide Leads Mineral Gains, Up 3.89% to Over $20,000/mt as Other Lithium Products Slide

SMM August 17: Battery metals demand faces a more gradual growth path as automakers and suppliers signal that hybrids and range extenders will retain a significant role well beyond earlier full-BEV transition timelines, carrying direct implications for the pace at which spodumene concentrate must convert into lithium carbonate (LC) and lithium hydroxide (LH) downstream. Industry executives argue that decarbonization progress should be measured by total emissions reduction rather than BEV penetration alone, with one powertrain executive projecting that half of passenger vehicles could still carry some form of combustion or hybrid system by 2040. For the lithium supply chain, pack size is the key variable rather than unit count. Hybrids and range extenders still require lithium-ion battery packs, but at a fraction of the capacity used in full BEVs, meaning each hybrid sold absorbs meaningfully less LC or LH per vehicle than a comparable BEV. Lithium remains structurally supported across almost every electrification pathway, unlike nickel, cobalt, and manganese, which carry closer ties to high-nickel chemistries used in longer-range BEVs. A longer hybrid phase would slow the rate at which large-format BEV packs absorb lithium units, easing the pace at which LC/LH conversion capacity needs to be brought online even as upstream spodumene mining and beneficiation projects continue ramping toward planned output targets. The demand path carries logistics implications as well. A more gradual absorption curve for battery-grade lithium salts gives converters and refiners processing spodumene feedstock from Africa, Australia, and South America greater runway to bring hydroxide and carbonate capacity online without facing the acute bottleneck pressure a steep BEV-only ramp would create, allowing producers and converters to better sequence CIF delivery schedules against a less compressed conversion timeline. Policy remains a swing factor: the EU's current framework targets a 100% cut in new car and van tailpipe emissions from 2035, effectively phasing out combustion sales absent new exemptions, though suppliers are pushing for a more technology-neutral approach that credits hybrids and range extenders. Greater EU flexibility would further extend the timeline over which spodumene supply needs to convert into battery-grade LC/LH. SMM View: A longer mixed-powertrain era points to a more forgiving supply-demand balance across the spodumene-to-lithium-salt chain in the near term, giving upstream concentrate producers and downstream LC/LH converters additional room to align capacity growth with actual offtake absorption rather than racing an aggressive BEV-only demand curve. This may moderate the urgency behind some conversion capacity expansions currently underway across major producing and processing regions, while the structural case for spodumene supply growth remains intact given lithium's exposure across virtually every electrification pathway. SMM will continue tracking how powertrain mix assumptions filter through into spodumene pricing, conversion economics, and logistics planning across key export corridors.

SMM August 17: Sigma Lithium Corporation, the largest producer of lithium oxide concentrates in the Americas, reported record second-quarter results with an EBITDA margin of 47%, up 39% quarter-on-quarter and the highest in company history. The producer, which operates the Grota do Cirilo project in Brazil, sold 24,400 tonnes of lithium oxide concentrate in the quarter for net revenues of $55 million, realizing an average price of $2,089/t, up 17% year-on-year. Gross and operating margins stood at 60% and 32% respectively, supported by a sharp reduction in costs: plant gate cost fell 36% QoQ to $401/t, CIF cost declined 33% QoQ to $452/t, and all-in sustaining cost eased 6% QoQ to $668/t, driven by upgraded mine operations and a 50% increase in production volumes. Total debt has been reduced 25% since Q2 last year. The margin improvement comes as Sigma moves deeper into an aggressive expansion phase. The company is targeting production of 330,000 t/y in FY2027, up from a current run-rate of 240,000 t/y, with two new plants under construction set to lift installed capacity to 580,000 t/y by end-2027 and 830,000 t/y by end-2028 more than a threefold increase from current levels. That scale of expansion means Sigma's low-cost tonnes will be entering the global concentrate market at precisely the moment African producers are ramping their own beneficiation capacity, placing the two supply regions on a more direct collision course than in previous years. Zimbabwe's Chinese-backed sulphate plants and Mali's Goulamina project are among the African assets scaling toward full production over the same 2026-2028 window, and both regions will increasingly be competing for share of a concentrate market that is set to absorb significantly more volume from multiple continents at once. SMM View: Sigma's cost trajectory illustrates how far unit economics can improve once a hard-rock operation reaches steady-state scale, and it sets a demanding benchmark against which African concentrate producers will be measured as they work through their own ramp-up curves. With low-cost Americas supply expanding rapidly, African projects still climbing toward full capacity face growing pressure to lock in cost competitiveness and secure offtake commitments before benchmark concentrate pricing comes under strain from the added global volume. SMM will continue monitoring how this expanding multi-region supplies base shapes price dynamics across the spodumene-to-hydroxide value chain.

[Focus on Supply Chain Collaboration: CATL Unveils Its 2035 Full Value Chain Carbon Neutrality Action Plan] On August 17, at the 2026 CATL Core Operations Carbon Neutrality Release Conference, Huang Bin, Director of CATL’s Procurement Center and Director of the Planning and Materials Control Department, stated that more than 80% of carbon emissions across the full life cycle of lithium batteries come from various stages of the supply chain. In the next phase, CATL’s goal is to achieve full value chain carbon neutrality—from mineral resources to finished batteries—by 2035. To achieve this goal, the key lies in coordinated efforts across the supply chain. From accurately accounting for carbon footprints through the entire process of targeted emissions reduction, CATL broke down the objectives in detail and formulated specific action plans.