Tianqi Lithium Energy Australia
(TLEA) has started production of battery grade lithium in Australia. The undersupplied lithium market should welcome this and meanwhile hope for further production starts. The Canadian hard rock deposits are also increasingly in the spotlight.
Tianqi announced the start of production at the Kwinana project in Western Australia a few days ago. Lithium hydroxide is produced in battery quality. This represents – at least on a commercial scale – a novelty for the Australian raw materials market.
Coveted lithium hydroxide
Tianqi – a joint venture between Tianqi Lithium Corporation (51%) and the Australian mining company IGO Limited (49%) – has thus taken an important step towards serving demand in a tense market situation. Lithium is in high demand, among others, by manufacturers of battery electric vehicles.
The demand exceeds the supply, the prices are extremely high. The London Metal Exchange (LME) currently quotes the price for lithium hydroxide, which is particularly popular in the automotive industry, at around USD 80,000 per ton.
Lithium hydroxide can be used in battery-grade quality just like lithium carbonate in batteries for electric vehicles. However, hydroxide enables higher battery capacities and thus longer ranges. Not least because of this, the prices for lithium hydroxide are significantly higher than those for lithium carbonate (currently around USD 60,000 per ton).
TLEA’s manufacturing facility is the first lithium hydroxide facility in Australia and the largest outside of China. From now on, 24,000 tons of lithium hydroxide in battery quality are to be produced per year.
The lithium used in batteries is not degraded in this form. Mining companies are looking for hard rock containing 5-6% lithium oxide. This is then further processed into battery-compatible lithium products. Much of this processing takes place in China. However, Western countries are in the process of building up their own production capacities – as has now happened in Australia.
Hope for hard rock in Canada
In addition to Australia, Canada is also increasingly coming into focus. There are large hard rock deposits here that appear to offer significant production potential. That’s about the Canadian company Foremost Lithium Resource & Technology (WKN:
A3DCC8, ISIN: CA3455101012, Ticker: FRRSF) with four hard rock lithium projects in Canada. Foremost intends to initially mine lithium oxide and then produce battery-grade lithium hydroxide.
The company’s current focus is on the Zoro project in the central Canadian province of Manitoba. The Jean Lake and Grass River projects are also located there. The fourth lithium project, Hidden Lake, is located in Canada’s Northwest Territories near Yellowknife.
Resource estimates are available for the Zorro project and further exploration and testing is ongoing. In 2020 it was determined for Zorro that the production of lithium oxide (6%) was possible here.
The company is not far from the projects Snow Lake Resources (WKN.
A3C8D9, ISIN: CA83336J2083, Ticker: LITM) represented with the Thomson Brothers lithium project. The company only went public in November 2021, raising $27.6 million in the process.
It is estimated that the project can produce 160kt spodumene (6%) annually over a period of 8-10 years. Snow Lake Resources intends to operate the mine entirely with renewable energy. If this succeeds, it would be the first all-electric lithium mine in the world.
US wants to reduce dependence on China
In view of the expansion of electromobility, the USA and other western countries want to reduce their dependence on China in this regard. With regard to lithium deposits, China is only the fifth largest location with 7% after Chile (42%), Bolivia (41%), Australia (26%) and Argentina (10%).
However, the further processing of the raw materials into battery-capable lithium products takes place primarily in China and other Asian countries. China’s market share in refining in 2019 was 80%. 73% of the lithium-ion battery cells came from the Middle Kingdom.
In the USA, therefore, more giga factories are to be built for battery production. The establishment of lithium production in Canada – where the raw material is not yet mined – also plays an important role in securing the supply chains.
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