Lithium is a specialty industrial product bought and sold under contract, and the chemistry is specifically tailored to the customers needs. Supply contracts are useful towards predicting cash flow and securing project finance.
Although lithium is used in over 70 types of products, the growth in battery usage has driven lithium demand skyward. Electric vehicles and grid storage, such as Tesla’s Powerwall and Powerpack residential and commercial battery systems, are very high growth areas.
Demand is predicted to be as high as 125% of supply by 2020 driven by electric vehicles and grid storage.
The price of lithium has increased by 300% since 2003.
The development timelines of Pure Energy’s Clayton Valley Brine Project are aligned with the anticipated high-growth demand in lithium.
Lithium Supply & Demand
Driven by power storage demand (everything from power tools and handheld devices to electric vehicles), the global lithium industry should, we believe, enjoy a CAGR of roughly 12% through the end of the decade (starting in the mid/high single digits and accelerating afterwards as the EV market enjoys further penetration)”
“We estimate lithium consumption in 2013 was of the order of ~160k tonnes of LCE”
“Supply will be short: There have been investor concerns about the supply side of the equation given a number of announced projects in the lithium industry. Upon a detailed review of the projects, we believe the risk is that demand will actually outstrip supply as we approach the later part of the decade, with demand potentially as high as 125% of total capacity”
*Source: Credit Suisse Equity Research. American Region Specialty Chemicals 27 May, 2014
The most important use of lithium is in rechargeable batteries for electric vehicles, energy grid storage, mobile phones, laptops, digital cameras and other small electronic devices. Lithium is also used in some non-rechargeable batteries.
Lithium metal is combined with aluminum and magnesium to form strong and lightweight alloys for armour plating, aircraft, trains and bicycles.
Optics, Glassware and Ceramics
Lithium is used to produce optics, glassware, and ceramics.
Lithium chloride is one of the most hygroscopic materials known, and is used in air conditioning and industrial drying systems.
Lithium stearate is used as an all-purpose and high-temperature lubricant.
Lithium carbonate is used in medications to effectively treat manic depression.
Lithium hydroxide and lithium carbonate are both consumed in battery cathodes. The high energy content and light molecular weight of lithium makes it an ideal energy source for transportation.
Lithium Market – Source
Economically accessible sources of lithium are relatively rare, and commercial production comes from brine and rock.
Lithium-enriched brine is the most cost-effective form of lithium production and is responsible for most of the global production. Under specific climatic and geologic conditions lithium can be concentrated naturally in very salty water referred to as brine. This process is relatively rare, and the predominant theory suggests that volcanic lithium-rich ash is deposited, entrained into water by solution, and forms a lake in low-elevation desert depressions where evaporation exceeds precipitation. Over time, water is evaporated and the salts, including lithium, are concentrated and eventually infiltrate into the ground. Brines can be twice as salty as seawater, and under certain geologic conditions, can be contained underground by impermeable rock effectively forming a bathtub-like feature. These features can be a prolific source of accessible and concentrated lithium, and are known to be found in Nevada, Atacama (Chile, Bolivia and Argentina), and Tibet.
Before 1997 lithium production was predominantly hardrock-sourced from the USA, Russia, Chile, Australia, China, Zimbabwe and Canada. However during 1997 Sociedad Quimica y Minera de Chile (“SQM”) began processing lithium product from continental brines in the Salara de Atacama region. The lower cost and larger volume of production of this brine-sourced lithium changed the shape of the industry, thus forcing the closure of many high-cost rock operations. The Greenbushes mine in Austrailia is the only significant lithium hard rock mine in the world, unique due to the highly enriched lithium mineralization.