When profit margins are robust, humans have an uncanny way of doing whatever it takes to capture them. Think offshore oil, or the oil production boom of the 1920s, which took English and American entrepreneurs to the far reaches of the world.
Necessity is always the mother of invention. So, as we enter an era where lithium is the new oil, humans are at it again. And, due to sky-high lithium prices, new recovery technologies and discoveries, the world could be flooded with the commodity in a few years. Lithium production could very well double by 2025. While most worry about supply, I’m wondering if there will be enough demand.
Storm of Support Fuels Lithium Production Boom
Miners work harder than most but can be hampered by red tape and environmental protests. However, when it comes to lithium, governments and most Tesla-driving consumers are in their corner… not an adjustment — we’ve witnessed a seachange in attitude.
With governments from Quebec to Nevada, Sweden, and Argentina pushing mining companies to produce lithium and critical minerals for the green revolution en masse, a tidal wave of supply is coming.
Let’s first look at Australia, the world’s largest producer of lithium:
In a recent research report, highlighted by Kitco’s Vladimir Basov, the Australian Government’s Department of Industry, Science, Energy and Resources (DISER) predicts that,
“…lithium production in Australia, the world’s largest lithium producing nation, is forecast to grow from 247,000 tonnes of LCE in 2021 to 335,000 tonnes in 2022, 387,000 tonnes in 2023 and 469,000 tonnes in 2024.”
Looking to the Northern Hemisphere, Canada has three new lithium projects in Quebec set to begin production in 2023, with a combined output of over 50,000 tonnes of LCE. By 2025, the Quebec-based Whabouchi mine is forecast to add output of 52,500 tonnes a year. So, within three years, Canada may quickly produce over 100,000 tons of LCE. The significance of this is hard to overstate, given Canada produced no lithium in 2022, and 100,000 tons is equal to about 20% of global Production in 2022.
The landscape is changing rapidly, and lithium output is about to drop into overdrive. We spoke about Canada’s rise to lithium power in a recent podcast:
Australia and Canada are two examples, but nations from the U.S. to Chile and Argentina are preparing to ramp-up lithium production like never before.
11 Big Lithium Projects Set to Begin or Increase Production
Below is a list of some of the largest lithium projects in different stages of development expected to come into Production in the near future.
- Thacker Pass Lithium Project in Nevada, USA
- Greenbushes Lithium Project Expansion in Western Australia
- Maricunga Lithium Project in Chile
- Sonora Lithium Project in Mexico
- Sal de Vida Lithium Project in Argentina
- Pilbara Minerals Lithium-Tantalum Project in Western Australia
- Clayton Valley Lithium Project in Nevada, USA
- Fenix Lithium Project in Nevada, USA
- Wodgina Lithium Project in Western Australia
- Centenario Lithium Project in Argentina
- Nemaska’s Whabouchi Mine, Quebec, Canada
Greenbushes and Thacker Pass to Lead Lithium Production Increases
The lithium carbonate-equivalent (LCE) of their increased or expected production is below:
According to Lithium Americas, Thacker Pass is expected to increase production to 80,000 metric tons per year following its Phase 2 expansion.
Greenbushes Lithium Mine is increasing Production from 80,000 metric tons annually to 160,000 Mtpa.
Maricunga Lithium Project in Chile is estimated to produce about 15,000 tonnes per annum (tpa) of lithium carbonate equivalent (LCE) in phase 1, before ramping up.
Sonora Lithium Project in Mexico boasts an incredible 8.8 Mt of LCE resource. The company targets an open-pit mining with an approximate 250-year resource life. And the company is targeting an initial 35,000 Mtpa of lithium production.
Sal de Vida Lithium Project in Argentina is expected to produce ~15ktpa of Lithium Carbonate Equivalent (LCE) over its 40-year mine life.
The Pilgangoora ore body in Australia is one of the largest hard rock lithium deposits in the world, and according to the company’s website,
“The resultant Ore Reserves as at 30 June 2021, was 157.5 Mt at 1.19% Li2O, 120ppm Ta2O5 and 1.03% Fe2O3.”
In September of 2021, the company increased its mineral reserves to 308.9 million tonnes grading 1.14% lithium oxide “…and 105 ppm tantalum pentoxide, containing 3.5 million tonnes of lithium and 71.7 million pounds of tantalum, respectively.”
“The proposed Stage 2 expansion would increase processing capacity to 5Mtpa to produce 800-850,000tpa ~6% spodumene concentrate, and 800,000lbspa of tantalite concentrate through three stages.”
While 5Mtpa is nothing compared to some of the behemoths coming online, Pilgangoora has a proven mineral resource of hundreds of millions of tons grading above 1% lithium oxide that it will be mining for decades.
The Centenario-Ratones Salar lithium project is 3,800 metres above sea level in Argentina. Run by Eramet, the 140-year-old Paris-based mining conglomerate with operations across Europe, Asia, North America, Latin America, and Africa, the company is focusing on its lithium division with renewed vigor.
The salar hosts an estimated 10 million tonnes of lithium carbonate equivalent (LCE). And has an estimated production of 24,000 tonnes LCE/year.
The Wodgina Lithium Project is one of the world’s largest known hard rock lithium deposits.
“During 2019, the three-train Spodumene Concentrate Plant, capable of producing 833,000 wet tonnes (750,000 dry tonnes) of 6% spodumene concentrate per annum, was completed.”
Nemaska Lithium’s Whabouchi mine in Quebec is expected to enter production in 2025 and add another 52,500 tonnes of annual output.
According to NS Energy, the Shawinigan plant will employ a unique membrane electrolysis process to produce 33,000tpa of lithium carbonate-equivalent (LCE) in the form of lithium hydroxide monohydrate crystals and lithium carbonate powder.
Fenix Lithium Project in Nevada, USA, is expected to produce 27,400 tonnes per annum (tpa) of LCE over the mine life. According to MiningTechnology.com,
“The project is estimated to host probable mineral reserves of 213 million tonnes (Mt) containing 1.28Mt of lithium carbonate equivalent (LCE) graded at 1,129ppm of lithium (Li). “
The Clayton Valley Lithium Project, located in Nevada, is expected to produce 10,000 tonnes (t) of lithium carbonate equivalent (LCE) a year.
Discoveries Are Happening All the Time
Investors should consider the above list is not exhaustive. Unlike critical minerals such as cobalt, lithium exists in abundance globally. Yes, brine operations take up huge swaths of land, but hard rock discoveries are always happening. Look at Patriot Battery Metals, whose market cap has swelled to over $1.5 billion! The company is putting out some of the highest grades in the industry as the market hails a world-class discovery. Other exceptional projects in Ontario are working their way through to a production decision. So, many lithium producers are set to come online in the next 2-4 years. Canada, for example, is set to leapfrog ahead of the United States in total lithium production by the end of this decade.
“Critical Elements Lithium’s (TSXV: CRE) Rose project, Sayona Mining’s (ASX: SYA) Authier project, and Sayona and Piedmont Lithium’s (Nasdaq: PLL; ASX: PLL) jointly owned La Corne mine — all in Quebec — are expected to begin production in 2023. The three projects are expected to add over 50,000 tonnes of lithium carbonate equivalent (LCE) production.”
Add in Nemaska’s Whabouchi Mine, mentioned above, and very quickly, Canada is producing more than 100,000 tons of LCE annually. Many countries, from China to Mexico, are joining the party and hoping to bring on significant new lithium production in the coming years.
Albemarle Still Forecasting Supply Deficit by 2030
Despite all of this production coming online, according to Albemarle Corp’s 2023 strategic update (soon to be the world’s largest producer of lithium), by 2030 global lithium demand (LCE, lithium carbonate equivalent) will expand to 3.7MMt. Furthermore, the mined supply of lithium will come in at 2.9 MMt LCE by 2030, resulting in an 800,000-tonne supply deficit, net of recycling.
In CBC’s More than 300 new mines are needed to meet electric vehicle demand, with files from Jonathan Pinto,
“Benchmark Mineral Intelligence estimates at least 384 new mines for graphite, lithium, nickel, and cobalt will be required to meet electric vehicle demand by 2035. If battery materials can be recycled in large enough quantities, the firm says about 336 new mines would be needed.”
While I don’t know the metrics used to make such a projection, higher-grade lithium projects may reduce the number of mines necessary. Furthermore, when one considers the billions flowing into exploration and project development, the market may be surprised to see how much lithium miners can produce. If EV adoption fails to happen as quickly as many forecasts expect, and the recycling of lithium and other critical minerals expands, less supply will be necessary. Until then, the race is on to get lithium carbonate to market.