Lithium has become a household name among investors as the commodity price has gained significant strength in the last few years. Driven by an increase in energy storage requirements that are fueled by the electric vehicle and consumer electronics market, many investors are flocking to the mineral in hopes of enjoying a healthy profit as the world moves further into the clean energy age.
Lithium has multiple forms, however the most important forms for manufacturing electric vehicle batteries are Lithium carbonate Li2CO3 and Lithium hydroxide LiOH-H2O.
Battery grade Lithium carbonate is used to make cathode material for lithium batteries, however requires a substantial amount of processing to remove impurities before it meets the required specification. Lithium hydroxide is also used for cathode material, however the hydroxide form can produce the cathode material more efficiently than the carbonate form. Lithium hydroxide decomposes at a lower temperature, reducing production time and energy costs for Chinese cathode producers.
Chinese domestic spot battery-grade lithium carbonate price (min 99.5% Li2CO3) sells for around $20 000 USD per tonne, whereas battery-grade lithium hydroxide monohydrate (min 56.5% LiOH.H2O) spot prices currently fetches around $21 000 USD per tonne. The premium paid for Lithium hydroxide is expected to continue as operators look to reduce costs whilst maximise profitability. However, despite the increase in popularity for Lithium hydroxide, the demand for Lithium carbonate demand is expected to continually rise steadily into 2020.
Lithium in both the carbonate and hydroxide form will continue to play a major role in the Western Australian economy, with significant deposits and projects across the state including Talison’s Greenbushes mine and expansions, Pilbara Mineral’s Pilgangoora and Tianqi’s Lithium Hydroxide plant in Kwinana already well on their way to production.
Critical Investor EU