She lithium It becomes the basic raw material for the transformation of society towards the use of cleaner energy. It is used in electric vehicle batteries and also in stationary batteries that serve as backups in homes or to store surpluses in wind and/or solar parks. australian is the largest source of lithium in the world Today: it is the country that takes the most lithium and is the main exporter worldwide. Lithium is an extremely valuable resource and is on its way to becoming the new gold for Australia.
Although most of the obtained lithium ends up being refined in China, which is also where most of the batteries are made, Australia is the country that produces the largest amount of this raw material whose price seems to have no ceiling. The increase in prices makes batteries more expensive (this year they broke a historical downward trend) and, therefore, electric cars for the final consumer. However, this is a sweet opportunity from the seller’s point of view.
In an extensive report on the balance of trade in raw materials and natural resources published by the Department of Industry, Science and Resources, the Australian government details the current situation and prospects for the lithium market (among other raw materials). In this report they pointed out that the income from Lithium exports exceed $16 billion in the fiscal year 2022/23, more than triple exports from last year when they reached 5,000 million, and multiplied the number in the year 2020/21 almost fifteen times (1,100 million dollars).
Lithium became the sixth most important raw material in terms of exports in the country, surpassing crude oil and placing itself behind gold – whose exports reach 26.7 billion dollars. Australia is the country with the largest gold reserves in the world and the second largest producer (just behind China), and forecasts in the coming years show that lithium exports will exceed the value of gold. . In the current financial year, lithium will account for 3.5% of Australia’s raw materials exports.
The raw materials with the highest turnover of Australian exports are iron (113,424 million dollars), liquefied natural gas (90,286 million), thermal coal (75,622 million), metallurgical coal or coking coal (57,131 million), gold (26,657 million) and lithium (16,100 million).
While gold exports are forecast to drop next year, returning to numbers similar to 2021, lithium exports will continue to grow (albeit at a slower pace than this year) due to growing demand for batteries. Australia estimates that global demand for lithium will increase from 592,000 tonnes of lithium carbonate equivalent (LCE) in 2021 to 745,000 tonnes in 2022. In the next two years, demand is expected to increase by more than 40%, reaching 1,091,000 tons in 2024.
Despite growing battery production capacity in Europe and the United States, Asia remains the main source of lithium demand, with China leading the way. 96% of the lithium extracted in Australia is exported to China. They are followed by Belgium (2.3%), South Korea (0.9%) and the United States (0.7%). Unsurprisingly, China now produces 75% of all lithium-ion batteries in the world.
While much of the growth in export volume (in economic terms) was driven by rising prices, it was also due to increased Australian production capacity. It is estimated that the country’s lithium production will grow at a rate of 18% annually in the coming years. The increase in spodumene production is expected to be faster, from 2.3 million tons in the 2021/22 financial year to 3.2 million tons in 2023/24.
Global lithium production “will grow, but the supply gap will take time to close,” the report said. Although new procurement projects are being developed rapidly, brine mining and drying are currently insufficient to meet demand. The global production of LCE was 551,000 tons in 2021 and is estimated to reach 691,000 tons in 2022 and 1,087,000 tons in 2024. Chile and China, along with Australia, are the countries with the highest production.
Price, supply and demand
This gap between production and demand is the reason, according to the forecasts of the Australian government, that spot prices of lithium continue to set an all-time high in 2023, before they start to moderate from 2024. Despite new projects that increase production, there are still shortages of spodumene, lithium hydroxide and lithium carbonate. The report said potential delays at large farms meant there was a “risk of continued supply shortages” in the coming years.
Spot spodumene concentrate averaged about $6,100 per ton in November 2022, up 6.4% from October, and more than tripled the average price of $1,900 per ton in November 2021. Like lithium hydroxide, it sold for $78,950 per ton , compared to $28,560/ton. tons in November last year.
According to the report’s forecasts, spodumene prices will continue to rise next year, reaching an average annual price of $4,010 per ton in 2023, before starting to moderate in 2024 and hovering at an average price of $3,130 / ton. For its part, the average annual price of lithium hydroxide will rise to $39,850/ton in 2022 (more than double the previous year) and is expected to reach its peak in 2023, moderating in 2024 with average annual price of $48,000. dollars, according to the report’s forecasts (data expressed in US dollars).
The big price increase has another reason: refineries and battery manufacturers together stock lithium due to concerns about global supply chains. There is another reason and that is that, in a hot market, commodity traders are also looking to make their own fortune. However, there is a lot of opacity about this and no data on how many reserves there are currently stock.
Australian lithium and spodumene
While Chile and Argentina, two of the world’s leading lithium producers, obtain lithium from brines, Australia’s lithium is mainly obtained through traditional mining. More than half of Australia’s lithium extracted from spodumena, a mineral from the silicate group. According to Mining every weekcurrent extraction methods only recover between 50% and 70% of the lithium present in spodumene, but a new process has been able to extract 95%.
Electric vehicle batteries can use lithium carbonate (Li2CO3) or lithium hydroxide (LiOH). Nickel-rich ternary batteries (NCA and NCM811) must use lithium hydroxide, while cells with NCM622 or NCM523 chemistry can use lithium hydroxide or lithium carbonate. Lithium hydroxide is also used for lithium ferrophosphate (LFP) batteries.
Although Chile has more reserves, Australia is currently the largest producer of lithium, with 52% of global production in 2021. Chile comes in second, with a 24.5% market share, followed by China with 13, 2%. Between the three countries they produce 90% of the world’s lithium production.