Lithium Australia managing director Adrian Griffin has downplayed expert opinion that China is facing an oversupply of spodumene concentrates, claiming that it “may actually be short-lived.”
Experts debate that China’s receipt of electric vehicle (EV) subsidies and spodumene converters’ “struggle to cope” with planned expansion has caused an oversupply of spodumene concentrates.
But Griffin believes the short-term deviations will be resolved. Chinese legislative changes will also prevent the banning of internal combustion engines.
“Taking a longer-term view, some 3.5 million tonnes of lithium carbonate equivalent will be required annually just to power the EVs needed to meet the legislative requirements for 2030 or thereabouts,” Griffin said.
“Add to that demand for lithium for energy storage and electronic goods, and it’s hard to envisage current or planned lithium operations meeting demand.”
Lithium can be sourced from the infinite seawater, geothermal and oil field brines, recycling of spent lithium-ion batteries and lithium clays.
In the meantime, the softening prices of lithium and its by-products will subsequently put a downward pressure on lithium-ion batteries, which are showing considerable demand, according to Griffin.
Reaching economies of scale in lithium-ion batteries production will also decrease the overall cost of EVs, which are expected to surpass traditional vehicles in market share by 2038.
“Lithium ‘glut’ or not, significant pricing pressure on lithium chemicals will lead to competition among battery manufacturers in the first instance, with EV producers to follow, and have a major influence on cost outcomes right across the board,” Griffin concluded.