The increase in lithium demand saw four new spodumene operations enter the market in 2018, which has impacted the hard rock ore’s trading price and reduced realized profits for West Australian producers. The Mt Marion lithium mine in WA has described a price fall of almost 15% over the last 3 months, with spodumene lithium oxide prices falling from $930/dmt last quarter to $791/dmt in the first quarter of 2019.
The Mt Marion operation is currently owned by Gangfeng and Mineral Resources after Neometals recently agreed to sell its 13.8% stake in the venture to Mineral Resources for $104 million.
While the cost of spodumene concentrate is higher than that of the typical South American brine operation, spodumene concentrate is typically the preferred form as its conversion to battery grade lithium hydroxide still trades at around US$20 000 per ton.
Industry tracker Benchmark Minerals said that spodumene producers “experienced more pressure as 2018 contracts expired, ushering in a difficult period of negotiation for suppliers, as Chinese converters sought to receive significant discounts due to increased supply”
Despite this recent fall in prices, experts believe that demand for battery-grade lithium hydroxide will continue to exceed supply in the medium to long term, driving prices up and encouraging further investment into the market.
