Lithium market requires $17bn investment to meet growing demand

Lithium expert Joe Lowry has estimated the global market for the commodity needs investment of at least $US12 billion ($17.32 billion) in the next five years for supply to match its growing demand.

Lowry, speaking at the Paydirt 2019 Latin America Downunder mining conference in Perth, dismissed the “myth” there was an over-supply of lithium.

“The ‘myth’ is driven by reports from ‘big bank’ analysts and supported by statements by Chilean regulator, CORFO, after its revised agreements allowing Albemarle and SQM to produce more material from the Atacama brine resource,” Lowry, who is the president of Californian-based Global Lithium, said.

“The reality is increasing production quickly is not easy.”

Lowry also reiterated that the growing demand for lithium comes from the growing electric vehicle market.

“The future of lithium is all about E-mobility and energy storage. E-mobility is a much broader concept than just cars – it covers all forms of transportation from scooters to buses to ferries and, hopefully, even air transportation, in the coming years,” he said.

The global lithium executive also warned that the ‘big four’ global lithium producers – Ganfeng, Tianqi, SQM and Albemarle Corporation – could not alone meet the demand of lithium in 2025.

“Overall, the industry faces a lack of financing and needs to inject more than $US12 billion in the next five years,” he said.

“This requirement is exacerbated further by known and emerging failures in lithium start-ups which have demonstrated a lack of necessary skillsets – high profile failures that have discouraged sector investment.”

The source of lithium was also discussed by Lowry, who called for a more balanced debate regarding analysts’ predictions around the dominance of hard rock lithium.

“Neither lithium source – hard rock or brine – will dominate the future, all lithium supply is not created equal,” he said

“It will be cathode selection decisions that will drive product choice. Any price issue will be defined more by the actual production cost curve at the time – but expect prices to be much firmer going forward.”

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