Lithium battle heats up

September 07, 2018 // By Nick Flaherty
The battle to secure supplies of lithium for batteries for electric vehicles and energy storage is heating up.

In order to meet the demand predicted in 2025, producers need to build a supply of approximately 500,000 tonnes of lithium - three times more than today's production, says a new infographic from market researchers IHS Markit. With an average capex of 16,000US$ per ton, the industry requires an investment of $7bn to $8bn during the next 10 years.

The main cost component of an EV is its battery pack. Battery costs for EVs decreased from around $900 per kWh in 2010 to approximately $200 per kWh in 2017, a drop of 80% as volume increases. Grid-connected batteries for energy storage will grow 16-fold between 2017 and 2025.

As a result the lithium industry will require significant investment to allow a smooth transition to EV mobility says HIS Markit. As well as being the largest EV producer, China accounts for only 7% of lithium extraction, but controls 48% of lithium chemical production and 62% of lithium capacity. Other regions are looking to boost their lithium production. 

Chinese lithium, battery, and car producers have been negotiating foreign investment and offtake agreements to secure lithium supply, mainly with Australian projects. Approximately 70% of recent off take agreements were with Chinese lithium converters and battery manufacturers. In early 2018, only one site was sending product to its off-taker.

Developing lithium mining projects can take as long as 10 years. To overcome delays, a number of junior lithium producers are finding partners in the industry with available expertise and funding, both of which are crucial to developing a successful project.

Lithium & Battery Supply Chain infographic

www.ihs.com

Related stories:
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SION POWER TO RAMP PRODUCTION OF LITHIUM METAL BATTERY
COBALT SHORTAGES TO HIT BATTERY PRICES

 


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