Although corporate interest in the lithium Industry has seen exponential growth over the last few years, experts say at least another US$12 billion needs to be invested in order to ramp up supply to meet the growing demand.
Speaking at the Down Under mining conference in Perth, Western Australia – US lithium expert Joe Lowry told investors and companies alike that the Big Four’ global lithium producers – SQM, Albemarle, Jiangxi Ganfeng Lithium and Tianqi – would not be able to meet the global supply for lithium by 2025 without further significant investment.
“Overall, the industry faces a lack of financing and needs to inject more than US$12 billion within five years to have a chance of meeting demand,” Mr Lowry said.
“This requirement is exacerbated further by known and emerging failures in lithium start-ups which have demonstrated a lack of necessary skill-sets – high profile failures that have discouraged sector investment.
“There will not be any significant lithium chemical oversupply anytime soon. While there have been many optimistic supply forecasts, recent results speak for themselves.”
The demand for battery related lithium accounts for about 60% of the entire market, up from 25% in previous years.
With no other feasible alternative to feed our global reliance on smart devices, the only way forward is to increase investment in producing more of the battery grade mineral.
Mr Lowry said “this market is becoming a battery-related market. There’s really no question about that,”. Although according to Lowry, new lithium mines are difficult to bring online he believes the big 4 will likely only be able to maintain their current 68% market share.
“Almost every lithium project that has ever started with optimism has taken three or four years longer to reach full capacity and that’s what we’re seeing,”
“That means there’s a lot of juniors or smaller companies around the world that need to get financed and need to get moving.”