The demand for lithium will increase 40-fold in the next 20 years. An inventory of Hot spots in the International Lithium Market in 2021

International lithium prices soared in 2021, the benchmark index doubled, and the prices of major lithium products in China set a record. The hot market is due to the metal's position in the green transformation of the global economy, and lithium is a key raw material for the production of rechargeable batteries for electric vehicles.

Lithium shortages not only drive up prices, but also prompt companies to increase supply, and lithium news has become a hot topic.

1. Jadar (Jadar)

In July 2021, Rio Tinto decided to invest $2.4 billion in the Jadar lithium mine in Serbia. The world's second-largest miner said at the time that electric carmakers would need 3 million tonnes of lithium a year by 2030, up from 350000 tonnes a year now.

However, at present, the total production capacity of projects in production and under construction is only 1 million tons.

Rio Tinto says the world needs more than 60 Jadar projects to fill the gap. After reaching full production, Jadar Lithium Mine can produce 58000 tons of lithium carbonate, 160000 tons of boric acid and 255000 tons of sodium sulfate.

However, the project met with strong opposition. In early December 2021, local opponents organized a large demonstration, thousands of protesters took to the streets, the government was shocked and the city was shut down. Although the project was not completely rejected, the government subsequently suspended the land use plan for the Jadar lithium mine.

On December 23, 2021, Rio Tinto announced that it intended to suspend the Jadar lithium mine project because the local government had cancelled plans to supply land for the mine, and the company would have a dialogue with the public on the project.

II. China factor

Although China has the fourth largest lithium reserves in the world, the battery metal is mostly found in salt lakes in Tibet and Qinghai, with sparsely populated areas and high elevations. This makes lithium difficult to extract and transport, which is part of the reason why China is seeking overseas lithium supplies.

Ganfeng Lithium, one of the world's largest lithium producers, offered to buy a stake in Canada's Millennium Lithium (Millennial Lithium) in July, and Ningde Times joined the bid a few months later. Finally, the third company, American Lithium (Lithium Americas), was successful.

In 2021, Ganfeng Lithium also bought Bakanola Lithium, a Mexican exploration and development company, to account for the Sonora (Sonora) Lithium Mine.

Ganfeng lithium did not stop there, buying international lithium company (International Lithium) in September 2021, which is the (Mariana) project and partner in Mariana, Argentina, one of the largest deposits in the world.

In early November 2021, representatives of five Chinese companies visited Afghanistan to conduct an on-site inspection of the potential of the country's lithium project.

Zijin Mining is also on the hot list, especially after the acquisition of New Lithium of Canada in October 2021.

III. Mergers and acquisitions of Australian Enterprises

One of the biggest news in the lithium market was in April 2021, when Australian lithium miner Galaxy Resources (Galaxy Resources) and gold and copper company (Orocobre) announced a merger. The new company has a market capitalization of US $3.1 billion, making it the fifth largest producer of lithium chemicals in the world.

Tianqi Lithium's joint venture with IGO has also made headlines because it produced Australia's first lithium hydroxide, a cathode material for power batteries for electric cars. After full production, Quinana (Kwinana) will become the world's largest lithium hydroxide production facility and the world's largest spodumene processing plant.

Piedmont Lithium (Piedmont Lithium) and its 19%-owned Sayena Mining (Sayona Mining) have completed the acquisition of Canadian North American Lithium (North American Lithium) as part of their plan to build a lithium production base in the Abhitibi region of Quebec.

A few weeks later, they acquired another Canadian project: the Moblan (Moblan) project in the (Eeyou Istchee) area of Eyuchester, James Bay, northern Quebec.

In November 2021, (Liontown Resources), a lion town resources company, confirmed its plan to put the hard rock lithium deposit in the Catherine Valley, Western Australia, into production, one year ahead of schedule, and the company announced the results of a final feasibility study.

Pilbara Minerals (Pilbara Minerals), one of Australia's largest lithium miners, cut its production forecast mainly because of a series of events, from processing capacity commissioning and production delays to accidental closures and a shortage of skilled workers.

IV. Chile chasing

Production stalled when Chile surrendered its position as the world's largest lithium producer to Australia in 2018. In October this year, the country held a tender for lithium exploration and development with a total amount of 400000 tons per year.

In just a few weeks, 57 companies have shown interest in the new contract, according to official figures.

Ranked first and second in the world, (Albemarle) and SQM, which already have mines in northern Chile, plan to expand production.

SQM plans to increase its production capacity to 180000 tons and 140000 tons next year. An increase of 60,000 tons / year and 40,000 tons / year respectively over 2021.

The next step: a repeat of 2018?

In 2018, the global lithium supply was in excess and the international lithium price collapsed. Analysts believe that the competition to expand the supply of lithium will lead to a repeat of this scene.

Although they are scrambling to expand supply, mining companies believe that they are still unable to meet demand, and the tight supply situation in the market will be difficult to ease in the short term. Fitch Plan (Fitch Solutions) expects the outlook to be more optimistic, believing that "profound" changes will take place in the lithium market by 2030.

"Lithium supply chains are fragile, including geographically concentrated mining and smelting capacity and not many mature large companies," the consulting firm said in a note in December. "the rising nationalism of major lithium market resources will affect the development of new lithium projects."

Pilbara Minerals, one of Australia's largest lithium miners, has further exacerbated the tight market by lowering its supply expectations.

Some in the industry worry that rising lithium prices will eventually lead to higher prices for batteries and electric vehicles, affecting clean energy consumption when the world is in urgent need.

UBS (UBS) experts predict that the world will need 2700GWh's annual lithium-ion battery capacity to supply the electric vehicle industry by 2030. This will be 13 times the current battery capacity, or "225 billion IPhone 11 batteries".

At present, most suppliers are planning to expand production. MARBL, a joint venture between Arbor and (Minerals Resources), a mineral resources company from Western Australia, recently planned to restart the Wogina (Wodgina) lithium mine with an annual capacity of 250000 tons in the third quarter of 2022.

Liventer (Livent) plans to add 5000 tons of lithium hydroxide capacity in the United States in the third quarter of 2022. The company also plans to initially add 10,000 tons of lithium carbonate capacity in Argentina, although this can only be commercialized in the first quarter of 2023, and another 10,000 tons will be added in the second phase by the end of 2023.

Other new projects will be launched in 2022, including the Cauchar í-Olaroz project of the American lithium industry in Argentina, which will produce 40, 000 tons of lithium carbonate per year, and the spodumene project of Sigma lithium company (Sigma Lithium) in Brazil, which can produce 330000 tons of spodumene a year.

Inter-American Lithium is also developing the Sarkpass (Thacker Pass) project in Nevada, although the project faces legal hurdles. The company hopes to announce the results of the final feasibility study next year.

VI. New technologies, zero carbon and national security

New mining technologies being developed are expected to increase the supply of lithium. Experts believe that lithium recycling technology and its timing uncertainty may also lead to unexpected supply growth.

We can also expect newcomers to consolidate their position in the market, particularly in Europe.

In 2020, the European Commission added lithium to the list of key raw materials for the first time, making it a hot spot of concern.

Portugal is currently the largest lithium producer in continental Europe, accounting for 1.6 per cent of global production in 2019, but its lithium products are not for cars but for ceramics and glass.

Savannah Resources company (Savannah Resources) is pressing ahead with its Barroso (Mina do Barroso) lithium mine in Portugal and plans to release the final feasibility study results of the project soon.

Iris Resources (Erris Resources) is pushing ahead with its Sinwald (Zinnwald) project in Germany, which is located in the heart of Europe's chemical and automotive industries.

Volcan Energy Company (Vulcan Energy Resources) plans to produce the world's first zero-carbon lithium product. Its project, located in the Upper Rhine Valley in Germany, is a geothermal lithium brine deposit and is considered to be the largest lithium resource in Europe.

The company recently signed lithium supply agreements with several European carmakers, including Volkswagen, Stellantes and Renault. The company hopes to start commercial production by 2024.

A report released in May by the International Energy Agency ((IEA)) predicted a 40-fold increase in lithium demand over the next 20 years and recommended that the government start stockpiling battery metals. Fatih Birol (Fatih Birol), director of the IEA, believes that this will become an "energy security" issue.