Lithium Industry Analysis 2016 - Golden Dragon Capital … · Lithium Industry Analysis 2016 How...
Transcript of Lithium Industry Analysis 2016 - Golden Dragon Capital … · Lithium Industry Analysis 2016 How...
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Lithium Industry Analysis 2016
How long will the Lithium Prices
continue to rise for?
Prepared by: Brendan Jephcott
July 2016
Figure 1: Spodumene concentrate (5.13% Li20) sourced from Australian lithium producer Galaxy
Resources Ltd (ASX: GXY) sold on Alibaba by vendor Suzhou Huizhi Lithium Energy Material Co., Ltd.
for 1800 renminbi per tonne (A$355 per tonne). The spodumene concentrate is a monoclinic-
crystalline which is forms as either a columnar, granular or plated shape. The colour can be pale,
grey, purple or yellow, etc.; the hardness is 6.5-7 and it has a density of 3.03-3.22/cm3.
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Executive Summary Lithium is a light soft silver-white metal commonly found in three types of mineral deposits: brines,
pegmatites (hard rock), and sediments. The contained lithium concentration is generally low and
therefore only a limited number of deposits can be economically extracted.
Lithium brine deposits are often situated in desert locations such as Argentina, Bolivia, Chile and
China. Most lithium hard rock deposits are commonly found in Australia and Canada.
There are three lithium minerals commercially mined today called spodumene, petalite and
lepidolite of which spodumene is the most important given its higher inherent lithia content.
Once extracted, the lithium mineral ore is crushed and subjected to a number of separation
processes to upgrade the lithium content by removing waste materials. Different separation
processes will produce concentrate with differing levels of lithium content.
According to the United States Geological Survey in 2015 the world reserves of lithium exceeded 14
million tonnes with Chile accounting for 53%, China (22%), Argentina (14%), and Australia (10%).
Most of the known brine deposits are located in Chile, China and Argentina, with Australia and
Canada known for hosting the hard rock deposits.
Lithium and its compounds have several industrial applications, including: heat-resistant glass and
ceramics (35%), lithium-ion batteries (32%), grease lubricants, flux additives for iron, steel and
aluminium production.
The global lithium market is growing rapidly due to developments in the technology and energy
sectors, especially in the use of lithium-ion batteries for automotive and domestic applications.
Presently two thirds of global consumption is used in ceramics, glass, polymers and alloys, however
growth in the technology and energy sectors will see consumption in Lithium-ion batteries overtake
ceramics and glass.
Continual advances in the rechargeable battery market will fuel demand for the Lithium as world
demand for hybrid and electric vehicles, energy storage systems, and portable electronics continues
to grow. Rising demand for Lithium-ion batteries will come from the increasing incomes in emerging
and developing countries as they shift to better performing batteries.
In 2015 the lithium market was predominantly served by four major suppliers. According to the
United States Geological Survey an estimated 32,000 tonnes was produced from Australia (41%),
Chile (36%), Argentina (12%) and China (7%) exploiting hard rock deposits and brines respectively.
For most of the 2000’s the lithium carbonate price steadily increased, however over the past 12
months the price has dramatically increased from US$7,000 to US$22,000 per tonne leading to a
new boom in project acquisitions across the world as companies scramble to secure tenure across
land prospective for pegmatites.
The 2015-2020 China's Lithium Mining Market Trends and Investment Prospects Assessment report
has forecasted that the price of spodumene concentrate will be approximately $335 per tonne over
the period of 2016-2020.
This rising demand is brought on by the fact new sources of lithium raw materials are needed and
as things stand, currently there is not be enough lithium to supply the battery megafactories coming
on-stream in the near future.
The short to medium term growth in the lithium market will be limited by supply constraints, with
few new operations being commissioned and four producers controlling much of the market. It is
clear that new sources are required to meet growing demand.
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Table of Contents
Executive Summary ...................................................................................................................................... 2
1.0 What is lithium and how is it formed? ........................................................................................... 4
1.1 Types of lithium deposits ............................................................................................................ 4
1.1.1 Lithium brine deposits ........................................................................................................ 4
1.1.2 Lithium hard rock deposits ................................................................................................. 5
1.2 Map of lithium deposits .............................................................................................................. 6
2.0 Mining lithium .................................................................................................................................. 7
2.1 Lithium-bearing minerals ............................................................................................................ 7
3.0 Processing lithium ........................................................................................................................... 7
3.1 Lithium-bearing ores ................................................................................................................... 7
4.0 Lithium reserves .............................................................................................................................. 8
4.1 Chile .............................................................................................................................................. 8
4.2 China ............................................................................................................................................. 8
4.3 Argentina ...................................................................................................................................... 8
4.4 Australia ........................................................................................................................................ 8
4.5 Portugal ........................................................................................................................................ 9
4.6 Brazil ............................................................................................................................................. 9
4.7 United States ................................................................................................................................ 9
4.8 Zimbabwe ..................................................................................................................................... 9
4.9 Canada .......................................................................................................................................... 9
5.0 Industrial applications ................................................................................................................... 10
6.0 Demand for lithium ....................................................................................................................... 10
6.1 Lithium-ion batteries ................................................................................................................. 11
6.1.1 Tesla’s Gigafactory 1 .......................................................................................................... 11
6.1.2 China demand ................................................................................................................... 12
6.1.3 Other sources of demand ................................................................................................. 12
7.0 Supply Market ................................................................................................................................ 13
7.1 Lithium supply in 2015 .............................................................................................................. 13
8.0 Price history .................................................................................................................................... 15
8.1 Price forecast ............................................................................................................................. 16
9.0 Lithium mining and exploration companies ................................................................................ 17
9.1 List of ASX lithium stocks .......................................................................................................... 17
9.2 List of TSX-V lithium stocks ....................................................................................................... 18
9.3 List of Chinese lithium companies ........................................................................................... 18
References .................................................................................................................................................. 19
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1.0 What is lithium and how is it formed? Lithium (Li) is a light soft silver-white metal commonly found in three types of mineral deposits:
brines, pegmatites (hard rock), and sediments. The contained lithium concentration is generally low
and therefore only a limited number of deposits can be economically extracted1.
Figure 2: Lithium Ore
1.1 Types of lithium deposits
1.1.1 Lithium brine deposits
Lithium brine deposits are accumulations of saline groundwater that are enriched in dissolved
lithium. The word brine refers to a solution of salt (sodium-chloride) in water.
Lithium brine deposits are volcanic in origin and are often found situated in desert locations such as
Argentina, Bolivia, Chile and China2.
All producing lithium brine deposits share a number of characteristics2:
Arid climate,
Closed basin containing a playa or salar,
Tectonically driven subsidence,
Associated igneous or geothermal activity,
Suitable lithium source-rocks,
One or more adequate aquifers, and
Sufficient time to concentrate a brine.
Economic brines have lithium concentrations in the range of 200 to 4,000 milligrams per litre (mg/l).
Other elements in solution, such as boron and potassium, may be recovered as by-products.
In addition brines can also contain undesirable elements that create problems in processing such as
magnesium or toxic elements that require care in waste disposal2.
Lithium metal produced from brines is mostly low grade but, while the capital input for brine
production is high, operating costs are low3.
The process of extracting the contained lithium metal consists of the brine being pumped up to the
surface and concentrated by evaporation in a succession of artificial ponds, each one in the chain
having a greater lithium concentration2.
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Schematic Deposit Model for Lithium Brines
Figure 3: Schematic deposit model for lithium brines showing part of a closed-basin system
consisting of interconnected sub-basins. The sub-basin containing the salar is the lowest.
1.1.2 Lithium hard rock deposits
Lithium hard rock deposits are commonly found in spodumene bearing pegmatite mineral deposits.
Pegmatite is a common plutonic rock of variable texture and coarseness that is composed of
interlocking crystals of widely different sizes. They are formed by fractional crystallisation of an
incompatible element enriched granitic melt4.
Figure 4: Pegmatite Lithium
Most bodies of pegmatite are tabular, podlike (cigar-shaped), or irregular in form and range in size
from single crystals of feldspar to dykes (tabular bodies injected in fissures) many tens of metres
thick and more than a kilometer long; many are intimately associated with masses of fine-grained
aplite. Some are segregations within much larger bodies of intrusive igneous rocks, others are
distributed in the rocks that surround such bodies, and still others are not recognizably associated
with igneous rocks4.
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s
Figure 5: Schematic deposit model for lithium rock hard deposit
Most pegmatites have a composition that is similar to granite with abundant quartz, feldspar and
mica. The composition range of pegmatites is similar to that of other intrusive igneous rocks and is
indicated by using a modifier, e.g., granite pegmatite or gabbro pegmatite. However, pegmatites
occur most commonly in granites and the term applied alone usually refers to a granitic
composition. The mineralogy of pegmatites can be simple or exotic. A simple granite pegmatite may
contain only quartz, feldspar, and mica. More complex pegmatites are often zoned and can contain
minerals like tourmaline, garnet, beryl, fluorite, lepidolite, spodumene, apatite, and topaz5.
1.2 Map of lithium deposits
Lithium brine deposits are often found situated in desert locations such as Argentina, Bolivia, Chile
and China. Most lithium hard rock deposits are commonly found in Australia and Canada6.
Figure 6: Map of major lithium pegmatite (square) and brine (cross) deposits. Shaded rectangles are
enlarged to show distribution of salars in the Puna Plateau (Chile–Argentina–Bolivia) and China,
respectively.
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2.0 Mining lithium
2.1 Lithium-bearing minerals There are three lithium minerals commercially mined today called spodumene, petalite and
lepidolite of which spodumene is the most important given its higher inherent lithia content7.
Typically, the mineralised rock contains approximately 12% to 20% spodumene, or approximately 1%
to 1.5% lithium oxide (“Li20”).
“Spodumene” is a lithium pyroxene found in certain rare-element pegmatites, with the formula
LiAlSi2O6. It occurs as colourless to yellowish, purplish, or lilac kunzite, yellowish-green or emerald-
green hiddenite, prismatic crystals, often of great size and is the principal lithium mineral sourced
from pegmatites and is the preferred source for high purity lithium products8.
“Li2O” means Lithia, or Lithium Oxide, and is the elemental metal quantity converted to its oxide (in
percent (%)), which is a form of reporting used for lithium in scientific literature8. The conversion
factor for Li to Li2O is 2.152.
3.0 Processing lithium
3.1 Lithium-bearing ores Once extracted, the lithium mineral ore is crushed and subjected to a number of separation
processes to upgrade the lithium content by removing waste materials. Different separation
processes will produce concentrate with differing levels of lithium content.
Chemical grade concentrate sold to chemical producers undergoes additional processing through
the sulphate route process to convert the chemical-grade lithium concentrate to a variety of
chemicals including lithium carbonate, chloride and hydroxide9.
Figure 7 shows how lithium brine and hard rock deposits are processed10
.
Natural Resources
GlassCeramics
Minerals(Spodumene, etc.)
Brines
Lithium Carbonate
Li2CO3
Lithium Hydroxide
LiOH
Lithium Chloride
Li2Cl
Li2Co3 Glass Ceramics, Aluminum C.C.
Powder, Batteries, Air-conditioning,
Chemical Adhesives
Gases SeparationDehumidificationFluxesundentes
Basics
SpecialtyInorganics
Greases
Metal Lithium
Pharmaceuticals
ButylLithium
SpecialtyInorganics
Bar/Sheet
Secondary BatteriesPharmaceuticals
Primary BatteriesAleacionesdealuminioSecondary Batteries
PolymersPharmaceutical
PolymersPharmaceutical
Figure 7: Lithium processing flowsheet
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4.0 Lithium reserves According to the United States Geological Survey in 2015 the world reserves of lithium exceeded 14
million tonnes with Chile accounting for 53%, China (22%), Argentina (14%), and Australia (10%).
Most of the known brine reserves are located in Chile, China and Argentina, with Australia and
Canada known for hosting the hard rock reserves11
.
Figure 8: World lithium reserves
4.1 Chile Chile is the world’s most endowed country of lithium reserves. It has a reported 7.5 million tonnes
in reserves, of which 6 million tonnes come from Salar de Atacama, a large salt flat located in
northern Chile. The Atacama salt flat contains the world’s richest lithium-brine deposit12
.
4.2 China China has identified 14 lithium-bearing metallogenic anomalies and recorded more than 150
occurrences of lithium. These occurrences have produced economic concentrations of lithium from
both hard rock and brine type deposits. To date most economic deposits have been discovered in
the provinces of Jiangxi, Sichuan, Tibet and Qinghai. The hard rock deposits mainly occur in granitic
pegmatite in the Altay region of Xinjiang and the Jiajika deposit in western Sichuan Province whereas
the brine type deposits have mainly been found in the provinces of Qinghai and Tibet13
.
4.3 Argentina Argentina is the world’s third most endowed country of lithium with reserves of more 2 million
tonnes. Most of Argentina’s reserves come from Salar de Olaroz, a large salt flat located in
southwest of the Province of Jujuy. Olaroz is one of the largest salt flats in the world, and contains
some of the world’s richest brine deposits14
.
4.4 Australia Australia has more than 1.5 million tonnes of lithium, making it the fourth most endowed country
behind Argentina, China and Chile. One of the most promising locations to host hard rock deposits
is Western Australia as it holds the highest economic concentrations of lithium via several hard rock
deposits, notably the world-class Greenbushes Mine15
. Other lithium deposits have been discovered
in the Pilgangoora region of the Pilbara. Most lithium exploration work has been centred
surrounding these economic deposits.
Other promising locations in Australia to lithium deposits include the Broken Hill region in New
South Wales, particularly the amblygonite-pegmatites near Byjerkerno, in the Euriowie tin field16
.
23,000
38,000
48,000
60,000
1,500,000
2,000,000
3,200,000
7,500,000
0 1,000,000 2,000,000 3,000,000 4,000,000 5,000,000 6,000,000 7,000,000 8,000,000
Zimbabwe
United States
Brazil
Portugal
Australia
Argentina
China
Chile
Reserves in metric tonnes
World Lithium Reserves
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In Queensland historical geological exploration by Orion Metals Ltd (ASX: ORM) and Artemis
Resources Ltd (ASX: ARV) intersected lepidolite, a pegmatite lithium-bearing rock at its Buchanan’s
Creek/Grant’s Gully deposit (10m @ 1.37% Li and 8m @ 1.39% Li)17
.
In the Northern Territory, the potential for hard rock lithium mineralisation associated with
pegmatites at Pine Creek Orogen in Bynoe, NT18
.
In South Australia, Adelaide Resources Limited (ASX: AND) has secured the opportunity to prospect
for lithium concentrations at Lake Gilles and Lake Acraman in South Australia. The two lakes are
situated in the Eyre Peninsula showed potential for lithium brines and for potash and boron
deposits cited by a recent published research paper17
.
4.5 Portugal
The majority of the Portugal’s known lithium resources are located in the Goncalo aplite-pegmatite
field. Other areas of the country may contain economical traces of lithium but further exploration is
required to determine whether these prospects could be developed19. While Portugal produced
significantly less lithium than Chile, Australia and Argentina, it remains a major player in the lithium
industry. Overall, the country produced 300 tonnes of lithium in 2015.
4.6 Brazil
Brazil has only a few areas of lithium potential, mainly in the northern areas of Minas Gerais and
Ceara. In the State of Minas Gerais near Aracuai, several pegmatites have been exploited on a
sporadic basis. Most of the lithium production in Brazil comes from Arqueana de Minerious e Metais
(Sao Paulo). The company mines spodumene, petalite, lepidolite, amblygonite, beryl, and cassiterite
from pegmatite bodies near Aracuai in Minas Gerais. The company also supplies spodumene
concentrates to Companhia Brasileira do litio (CBL), a producer of lithium carbonate and hydroxide20.
4.7 United States
The United States is home to a single lithium mine controlled by Rockwood Holdings, which was
acquired by Albemarle in 201517. The brine operation is located in Nevada, and accounts for all of
the country’s lithium output. The US Geological Survey does not release national production
numbers to protect the company’s trade secrets.
4.8 Zimbabwe
The Bikita hard rock lithium mine is one of the largest lithium deposits in Zimbabwe. The mine is
located in southern Zimbabwe in Masvingo Province and is owned by Bikita Minerals Ltd. The Bikita
lithium mine has mineral reserve estimate of approximately 10.8 million tonnes with an average
lithium grading of 1.4% li containing about 0.15 million tonnes of lithium21. The pegmatites are
thought to be derived from granite magma and are notable for their richness in exotic constituents
such as lithium, beryllium, tantalum and niobium22.
4.9 Canada
Canada is home mainly hard rock lithium deposits. Nemaska Lithium Inc (NMX.V) is developing its
world-class spodumene lithium hard rock Whabouchi deposit located in Quebec. The mine has a
mineral resource estimate of 27.99 million tonnes with an average lithium grade of 1.57%17.
Other deposits include the Bernic Lake mine which is located in Manitoba. The Bernic Lake
represents one of the largest tantalum reserves in Canada having estimated reserves of 2.1 million
tonnes of ore grading 0.22% tantalum and 7.3 million tonnes of ore grading 2.76% lithium23.
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5.0 Industrial applications According to the United States Geological Survey lithium and its compounds have several industrial
applications, including: heat-resistant glass and ceramics (35%), lithium-ion batteries (32%), grease
lubricants, flux additives for iron, steel and aluminium production (See Figure 9)24
.
Figure 9: Lithium end uses
6.0 Demand for lithium The global lithium market is growing rapidly due to developments in the technology and energy
sectors, especially in the use of lithium-ion batteries (Li-ion batteries) for automotive and domestic
applications. Presently two thirds of global consumption is used in ceramics, glass, polymers and
alloys, however growth in the technology (smart phones and computers) and energy sectors (lithium
batteries for automotive and home usage) will see consumption in Li-ion batteries overtake
ceramics and glass25
.
World Lithium Consumption from 2000 to 2017
Figure 10: World lithium consumption 2000 - 2017
35%
32%
9%
5%
5% 4%
10%
Lithium End Uses
Ceramics and glass
Batteries
Lubricant greases
Casting mold powders
Air treatment
Polymer production
Other uses
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6.1 Lithium-ion batteries A Li-ion battery is a rechargeable battery where lithium ions move from the negative electrode to
the positive electrode during discharge and back when charging. Li-ion batteries use an intercalated
lithia compound as one electrode material, compared to the metallic lithium used in a non-
rechargeable lithium battery. The electrolyte, which allows for ionic movement, and the two
electrodes are the constituent components of a Li-ion battery cell.
The demand for Li-ion batteries is derived from manufacturing companies that are developing
batteries for electric products and electric vehicles. Such companies are Tesla Motors, SolarCity, LG
Chem, Foxconn, Boston Power, Samsung, Panasonic and the BYD Company Ltd.
Figure 11: Li-ion battery Megafactory demand forecast
The Li-ion battery market is rapidly growing as the market is known to be in short supply due to the
sharp increase in demand for lithium ion batteries used in electric cars and domestic power storage
systems. Storage of renewable electricity is a major international issue and domestic self-sufficiency
via solar panels and lithium ion storage units has mass consumer appeal26
.
6.1.1 Tesla’s Gigafactory 1
Tesla’s ‘Gigafactory 1’ in Nevada hopes to supply Li-ion batteries for over 500,000 cars within the
next two years and ramp its production rate up to 1,000,000 electric cars a year in 2020. Tesla alone
will require today’s entire worldwide production of Li-ion batteries.
The Tesla Gigafactory 1 was born of necessity and will supply enough batteries to support our
projected vehicle demand. Industry insiders note that long-term producers have been slow to react
to the increased demand.
Continual advances in the rechargeable battery market will fuel demand for the Li-ion batteries as
world demand for hybrid and electric vehicles, energy storage systems, and portable electronics
continues to grow.
Rising demand for Li-ion batteries will come from the increasing incomes in emerging and
developing countries as they shift to better performing batteries27
.
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6.1.2 China demand
In China the sale of all-electric and hybrid vehicles more than quadrupled between 2013 and 2014.
China will continue to draw demand from the industry as it dominates the world lithium market due
to the country’s massive output of goods manufactured with the metal.
China is expected to rank the world’s highest annual growth increases in lithium demand as it
expands its electrical vehicle market. The other major suppliers of Li-ion batteries in the Asia Pacific
region include South Korea and Japan which are also projected to see increases in market.
Salt lake lithium brine production in China is very limiting. The industry currently has an annual
output of 10,000 tonnes of lithium carbonate and hydroxide. The lithium brine is mainly sourced
from Qinghai Lithium Co, Ltd., Qinghai CITIC Guoan Co, Ltd., and Lanke Lithium Industry Co, Ltd.
Although the production capacity in recent years has increased significantly compared to previous
years, however when comparing to foreign companies such as the Chilean company SQM, American
company FMC, these companies produce up to 100,000 tonnes of lithium from brines.
The lithium companies; Rong Jie Co Ltd, Zhonghe Co Ltd, Western Resources Co Ltd in 2014 did not
produce any lithium due to rehabilitation, renovation, expansions and other reasons. In addition the
other domestic lithium producers reduced their spodumene concentrate production. According to
statistics, in the year 2015, China produced approximately 25,000 tonnes and imported 36,000
tonnes of spodumene concentrate.
Every year China imports a vast amount of spodumene concentrate, almost all of it from Talison
Mining (owned by Tianqi Group). According to statistics in 2012 China imported 280,000 tonnes of
spodumene concentrate. In 2013 the country reduced its imports to 250,000 citing high ore prices.
In recent years the lithium carbonate equivalent prices were on a downtrend, leading to Talison
Mining facing tremendous cost pressures for its processing costs, some producers were forced to
reduce their output in the second half of the year and domestic producers were actually forced to
shut down. This economic downturn lead to a reduction in spodumene concentrate imports for
2013 however the imports have since recovered as China imported 330,000 tonnes of spodumene
concentrate in 2014 and 360,000 tonnes in 2015.
China's production of lithium is mainly from brine salts which is quite complex, resulting the country
being dependent on importing spodumene concentrate which accounts for 66-70% of the market. It
is understood, while a small number of Chinese enterprises import high concentrated brine from
processing facilities abroad which accounting for about 16% of the market. However there are some
companies using domestic mineral resources of lithium brine and salt production accounted for
about 14 percent of the market. Chinese production of lithium salts faces long-term dependence on
imported raw materials for processing.
In recent years China has become a considerably big consumer of lithium. In 2014 China's total
consumption reached 65,800 tonnes, accounting for 40% of the world lithium consumption. By 2015,
the annual consumption rate of lithium increased 20% to 7.87 million tonnes. It is expected that the
supply market for lithium in the second half of 2016 will be tight and remain at high levels28
.
6.1.3 Other sources of demand
Other end uses for lithium (glass and ceramics, lubricating grease, and metallurgy) and their
markets are forecasted relative for moderate gains. The lubricating grease segment will boast the
best performance of these markets, spurred by the use of lithium-based greases in industrial and
transportation equipment. The demand will also be strong in the smaller aluminum alloy market,
where lithium is used to reduce weight and improve alloy strength. Presently the global market
consumes around 200,000 tonnes of lithium carbonate per annum. Growth in the technology and
energy sectors may see consumption double to over 400,000 tonnes of lithium carbonate by 2025.
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Figure 12: Global lithium carbonate demand forecast – 2015 to 2025
7.0 Supply Market In 2015 the lithium market was predominantly served by four major suppliers. According to the
United States Geological Survey an estimated 32,000 tonnes was produced from Australia (41%),
Chile (36%), Argentina (12%) and China (7%) exploiting hard rock deposits and brines respectively24
.
7.1 Lithium supply in 2015 In 2015 Chile and Argentina remained the top two lithium carbonate exporters to China. Chile and
Argentina exported 8,672 tonnes and 2,300 tons of lithium carbonate respectively to China,
accounting for 78.46% and 20.81% of China’s total imports24
.
Figure 13: World lithium supply market (Source: United States Geological Survey)
0
50,000
100,000
150,000
200,000
250,000
300,000
350,000
400,000
450,000
2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025
Lith
ium
Ca
rbo
na
te E
qu
iva
len
t (t
on
ne
s)
Global Lithium Carbonate Demand (2015 to 2025)
0
5,000
10,000
15,000
20,000
25,000
30,000
35,000
40,000
2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015
Lith
ium
Pro
du
ctio
n (
ton
ne
s)
World Lithium Supply Market
Other Countries
Zimbabwe
Russia
Portugal
China
Chile
Canada
Brazil
Australia
Argentina
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Most of the world’s producing Lithium brine mines are often found situated in desert locations such
as Argentina, Bolivia, Chile and China. Many of the worlds’ producing lithium hard rock mines are
found in Australia and Canada17
.
Figure 14: World lithium hard rock deposits
Figure 15: World lithium brine deposits
128.6
72.4
47.0 41.2
34.1 29.6 28.0 26.5 25.6 23.2 22.2
18.5 18.2 17.0 14.9 10.8
6.9 3.0 2.2
1.22%
2.60%
1.19%
1.42%
0.40%
1.34%
1.57%
0.98%
1.24% 1.34%
1.28%
1.07% 1.04%
1.31% 1.40% 1.40%
1.96%
1.03% 0.95%
0.0%
0.5%
1.0%
1.5%
2.0%
2.5%
3.0%
0
20
40
60
80
100
120
140
Lith
ium
Gra
de
(%
)
Min
era
l R
eso
urc
es
(to
nn
es)
World Lithium Hard Rock Deposits
Mineral Resource (Mt) Lithium Grade (%)
619.0
550.0
152.0
72.0 48.0 40.0 36.0
16.7 12.0 9.0
0.20%
0.04%
0.13%
0.16%
0.03%
0.04%
0.07%
0.04%
0.02%
0.05%
0.000%
0.050%
0.100%
0.150%
0.200%
0.250%
0
100
200
300
400
500
600
700
Lith
ium
Gra
de
(%
)
Min
era
l R
eso
urc
es
(to
nn
es,
10
,00
0)
World Lithium Brine Deposits
Resource (10,000') Lithium Grade (%)
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8.0 Price history For most of the 2000’s the lithium carbonate price steadily increased, however over the past 12
months the price has dramatically increased from US$7,000 to US$22,000 per tonne leading to a
new boom in project acquisitions across the world as companies scramble to secure tenure across
land prospective for pegmatites.
In 1998 to 2009 the average price for lithium carbonate per tonne grew to more than three times its
historical benchmark of US$2,000 per tonne, peaking at around US$6,000 per tonne by the end of
2012.
After the peak, in 2013 industry undertook an adjusting period of 10 months through to October
2014 where new demand from energy vehicles increased the price for lithium carbonate and started
a new rally in the latter half of 201425
.
The 2015 rally corresponded to a combination of two factors being the demand for battery grade
lithium carbonate caused by a demand for new energy vehicles and upstream industry bottleneck
issues. Prices increased to US$8,000 per tonne28
.
As of July, 2016, battery grade lithium carbonate has reached to more than US$22,000 per tonne LCE.
Figure 16: Lithium carbonate equivalent price history
In 2015 the price for lithium carbonate rose by 150%, the two main reasons were28
:
1. The demand for new energy vehicles and lithium was clear. According to Lithium Industry
Association statistics, China’s domestic demand for cathode material for lithium carbonate was
45,000 tonnes in 2015, an increase of 45% over the previous year, the shortage of 11,500 tonnes,
was enough to drive the lithium price up sharply.
2. There was an upstream resource bottleneck. The industry had competition with different
cathode materials, lithium brine industry production chains, the relative concentration of
processing capacity, the supply of resources is a high degree of monopoly, so that when the
demand for the outbreak, ordered the release of production capacity still can play pricing.
0
5,000
10,000
15,000
20,000
25,000
2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015
LCE
Pri
ce (
US
$/t
on
nn
e)
Lithium Carbonate 99% China
Golden Dragon Capital | Lithium Research
Page 16 of 19
8.1 Price forecast From 2015 to 2024, the market supply of Li-ion batteries for light vehicles is forecasted to total
around $US221 billion (A$310 billion), according to Navigant Consulting. Current price predictions
indicate that LCE may rise to over US$25,000 in 2016. Citigroup forecasts the price for lithium
carbonate will continue to rise through to 2017 on supply availability concerns, while demand is
likely to soar 64 percent by 2020 from 2015 levels25
.
According to the report titled 2015-2020 China's Lithium Mining Market Trends and Investment
Prospects Assessment published by the Mining Information Network29
. The price for lithium
concentrate has undergone substantial growth caused by the demand for electric vehicles. In the
first quarter of 2016 the industrial grade lithium carbonate prices rose to more than US$7,000 per
tonne with battery grade reported to be around US$7,800 per tonne, an increase of about 20% from
the 2014 price.
Recently the world's largest Lithium brine producer in the Atacama region of northern Chile was
affected by a flood disaster, the SQM plant and lithium production was suspended, a transportation
blockade was enforced, leading to an increase in raw material prices.
Figure 17: Spodumene Concentrate Price Forecast 2016-2020
It is estimated that, even with a conservative growth rate of 10%, the global lithium demand will
reach 20 million tonnes by 2020. However, considering the electric vehicle application for explosive
growth, the expected growth rate is far more than this figure. With the promotion of electric vehicles,
lithium carbonate consumption will usher in a steady and long-term growth projection for increased
prices following a rise in consumption for electric vehicles30
.
This rising demand is brought on by the fact new sources of lithium raw materials are needed and
as things stand, currently there is not be enough lithium to supply the battery megafactories coming
on-stream in the near future.
The short to medium term growth in the lithium market will be limited by supply constraints, with
few new operations being commissioned and four producers controlling much of the market. It is
clear that new sources are required to meet growing demand.
517
533
558
525
550
490
500
510
520
530
540
550
560
570
2016 2017 2018 2019 2020
Sp
od
um
en
e C
on
cen
tra
te P
rice
(U
S$
/t)
Spodumene Concentrate Price Forecast 2016-2020
Golden Dragon Capital | Lithium Research
Page 17 of 19
9.0 Lithium mining and exploration companies
9.1 List of ASX lithium stocks
Company Name ASX-Code Project Name Location References
Adelaide Resources ADN Davenport Ranges Project NT, Australia Click here
Altura Mining AJM Pilgangoora Project WA, Australia Click here
Ardiden ADV Seymour Lake Project ON, Canada Click here
Argonaut Resources ARE Crescent Lake Project ON, Canada Click here
Argosy Minerals AGY Mt Paris Project TAS, Australia Click here
Avalon Minerals Ltd AVI Kaustinen and Somero Projects Finland Click here
Birimian Gold BGS Bougouni Lithium Project Mali Click here
Caeneus Minerals CAD Muddy Mountain & Lida Valley Nevada, USA Click here
Capital Mining Ltd CMY Shaw River Lithium WA, Australia Click here
Cazaly Resources CAZ Kangaroo Hill Project WA, Australia Click here
Cohiba Minerals Ltd CHK Greenbushes Lithium Project WA, Australia Click here
Core Exploration CXO Finniss Lithium Project NT, Australia Click here
Crusader Resources CAS Manga Project Brazil Click here
Cullen Resources CUL 4 Strategic Projects WA, Australia Click here
Cyprus Development Corp CYP Clayton Valley & Alkali Nevada, USA Click here
Dakota Minerals DKO Lynas Find Project WA, Australia Click here
European Metals Holdings EMH Cinovec Project Czech Republic Click here
Exterra Resources EXC Moolyella Project WA, Australia Click here
Galaxy Resources GXY Mt Cattlin, James Bay Project WA, Australia Click here
GB Energy Ltd GBX Lithium Project Namibia Click here
General Mining Corp GMM Mt Cattlin Project WA, Australia Click here
Hannas Reward HNR Varuträsk Project Sweden Click here
Kairos Minerals Ltd KAI Pilbara Lithium-Gold Project WA, Australia Click here
Kidman Resources KDR Mt Holland WA, Australia Click here
Kingston Resources KSN 2 Lithium Projects WA, NT Australia Click here
Krakatoa Resources KTA Dalgaranga Project WA, Australia Click here
Latin Resources Ltd LRS Diversified Chile, Argentina Click here
Liontown Resources LTR Bynoe Project NT, Australia Click here
Lithex Resources LTX 4 Strategic Lithium Tenements WA, Australia Click here
Lithium Australia LIT Diversified Diversified Click here
Marindi Metals Ltd MZN Forrestania Lithium Project WA, Australia Click here
Maximus Resources MXR Lefroy Prospect WA, Australia Click here
Metalicity MCT Diversified Diversified Click here
Mithril Resources MTH Leaky Bore Project NT, Australia Click here
Monax Mining Ltd MOX Gingerella Project QLD, Australia Click here
Neometals NMT Mt Marion Project WA, Australia Click here
Orocobre ORE Olaroz Facility Argentina Click here
Paynes Find Gold Ltd PNE Wolfsberg lithium project Australia Click here
Peninsula Mines PSM 5 Strategic Lithium Tenements South Korea Click here
PepinNini Minerals Ltd PNN Salta Lithium Project Argentina Click here
Pilbara Minerals PLS Pilgangoora Project WA, Australia Click here
Pioneer Resources PIO Mavis Project ON, Canada, Click here
Platypus Minerals PLP Lepidico Diversified Click here
Poseidon Nickel Ltd POS Lake Johnston WA, Australia Click here
Prospect Resources Ltd PSC Arcadia Lithium Deposit Zimbabwe Click here
Quantum Resources Ltd QUR Thomson Brothers Lithium Project Canada Click here
Rio Tinto plc RIO Jadar Project Serbia Click here
Sayona Mining SYA Tabba Tabba Project WA, Australia Click here
Segue Resources SEG Next Advancements Pty Ltd WA, Australia Click here
Silver City Minerals Ltd SCI Broken Hill Project NSW, Australia Click here
Sovereign Gold Company SOC 118 Clayton valley lithium claims Nevada, USA Click here
Traka Resources Ltd TKL Lithium Project Australia Click here
Venturex Resources Ltd VTX Lithium Tenement Australia Click here
Venus Metals Corporation VMC 4 Strategic Projects WA, Australia Click here
Walkabout Resources WKT 3 Prospecting Licences Tanzania Click here
Zeus Resources Ltd ZEU Lithium Tenement Australia Click here
Golden Dragon Capital | Lithium Research
Page 18 of 19
9.2 List of TSX-V lithium stocks Company Name TSX-Code Project Name Location References
Ariana Resources plc LON: AAU Lynas Find Project WA, Australia Click here
Ashburton Ventures ARB Whabouchi South Project ON, Canada Click here
Avalon Advanced Materials Inc. AVL Separation Rapids ON, Canada Click here
Avarone Minerals AVM Moab Lithium Project Nevada, USA Click here
Bacanora Minerals BCN Sonora Lithium Project Canada Click here
Critical Elements Corp CRE Rose Lithium-Tantalum ON, Canada Click here
Dajin Resources DJI Diversified Diversified Click here
Eramet ERA Diversified Diversified Click here
European Lithium EURL Wolfsberg Project Austria Click here
Houston Lake Mining HLM PAK Project ON, Canada Click here
International Lithium Corp ILC Avalonia Project Ireland Click here
Lithium Americas Corp WLC Cauchari-Olaroz Project Argentina Click here
Lithium Corporation LTUM Diversified Diversified Click here
Lithium Exploration Group LEXG Diversified Diversified Click here
Lithium X LIX Sal De Los Angeles Argentina Click here
Macarthur Minerals MMS 3 Tenements WA, Australia Click here
Matica Enterprises Inc MMJ Clayton Valley Nevada, USA Click here
MGX Minerals Inc MGX Alberta Lithium Project Canada Click here
Nemaska Lithium NMX Whabouchi Lithium Mine ON, Canada Click here
Nevada Energy Metals BFF Clayton Valley Nevada, USA Click here
Nevada Sunrise Gold Corporation NEV Neptune Project Nevada, USA Click here
Nordic Mining NOK Keliber Mining Finland Click here
Pure Energy Minerals PE Clayton Valley Prospect Nevada, USA Click here
Rare Earth Metals plc LON: REM Sonora Lithium Project Mexico Click here
Stria Lithium SRA Pontax Project ON, Canada Click here
Ultra Lithium ULI Diversified Diversified Click here
9.3 List of Chinese lithium companies Company Name (Chinese) Company Name (English)
融捷股份有限公司 Rong Jie Co., Ltd.
青海锂业有限责任公司 Qinghai Lithium Industry Co., Ltd.
青海中信国安科技发展有限公司 Qinghai CITIC Guoan Technology Development Co., Ltd.
青海盐湖佛照蓝科锂业股份有限公司 Qinghai Salt Lake Fozhao Lanke Lithium Industry Co., Ltd.
西部资源控股股份有限公司 Western Resources Holding Co., Ltd.
江西赣锋锂业股份有限公司 Jiangxi Gan Feng Lithium Industrial Co., Ltd.
天齐锂业股份有限公司 Tian Qi Lithium Industry Co., Ltd.
福建众和股份有限公司 Zhonghe Co., Ltd.
上海中锂实业有限公司 China Lithium Co Ltd
Golden Dragon Capital | Lithium Research
Page 19 of 19
References 1. Altura Mining Ltd Webpage: About Lithium http://alturamining.com/about-lithium-2/
2. Dwight Bradley, LeeAnn Munk, Hillary Jochens, Scott Hynek, and Keith Labay: A Preliminary
Deposit Model for Lithium Brines https://pubs.usgs.gov/of/2013/1006/OF13-1006.pdf
3. Lithium Australia NL Webpage: About Lithium http://lithium-au.com/about-lithium/
4. Britannica: Pegmatite https://www.britannica.com/science/pegmatite
5. Encyclopedia: Pegmatite http://www.encyclopedia.com/topic/Pegmatite.aspx
6. Stephen E. Kesler, Paul W. Gruber, Pablo A. Medina, Gregory A. Keoleian, Mark P. Everson,
Timothy J. Wallington: Global Lithium Resources: Relative importance of pegmatite, brine and
other deposits http://www.sciencedirect.com/science/article/pii/S0169136812001539
7. Dakota Minerals Ltd: Lithium Sources
http://www.dakotaminerals.com.au/index.php/lithium/lithium-sources
8. Pioneer Resources Ltd ASX Announcement 15 Mar 2016: High Grade Lithium Project Joint
Venture Strategic Alliance with International Lithium Corporation
http://www.pioneerresources.com.au/downloads/asx/pio2016031501.pdf
9. Orocobre Ltd: Lithium Market http://www.orocobre.com.au/Lithium_Market.htm
10. Arlene Ebensperger a, Philip Maxwell b, Christian Moscoso c: The lithium industry: Its recent
evolution and future prospects
http://repositorio.uchile.cl/bitstream/handle/2250/124612/Ebensperger_A.pdf?sequence=1
11. USGS Minerals Information: Lithium - Mineral Resources Program
http://minerals.usgs.gov/minerals/pubs/commodity/lithium/mcs-2016-lithi.pdf
12. Fernando Ide, Comite de Sales Mixtas: Origin of lithium in Salar de Atacama, Northern Chile
http://archives.datapages.com/data/circ_pac/0012/0165_f.htm
13. Li Jiankang, Zou Tianren, Liu Xifang, Wang Denghong and Ding Xin: The Metallogenetic
Regularities of Lithium Deposits in China http://onlinelibrary.wiley.com/doi/10.1111/1755-
6724.12453/abstract
14. Wikipedia: Salar de Olaroz Mine https://en.wikipedia.org/wiki/Salar_de_Olaroz_mine
15. Talison Lithium Pty Ltd: Projects http://www.talisonlithium.com/projects
16. NSW Department of primary industries: Lithium
http://www.resourcesandenergy.nsw.gov.au/__data/assets/pdf_file/0005/238154/Lithium.pdf
17. Company Reports
18. Northern Territory Government: Creating Opportunities for Resource Exploration (CORE):
http://www.core.nt.gov.au/Content/File/commodities/Factsheet_RareEarthElements.pdf
19. Conference: 17th Industrial Minerals International Congress, At Barcelona: Lithium Potential in
northern Portugal
https://www.researchgate.net/publication/257307330_LITHIUM_POTENTIALITIES_IN_NORTHERN
_PORTUGAL
20. Jessica Elzea Kogel, Nikhil C Trivedi, James M Barker: 7th
Edition. Industrial Minerals & Rocks,
Commodities, Markets and Uses. https://books.google.com.au/books?isbn=0873352335
21. Wikipedia: Bikita Mine https://en.wikipedia.org/wiki/Bikita_mine
22. Colin J. Dixon: The Bikita Pegmatite — Rhodesia (Zimbabwe)
http://link.springer.com/chapter/10.1007%2F978-94-011-6511-2_44
23. Wikipedia: Bernic Lake Mine https://en.wikipedia.org/wiki/Bernic_Lake_mine
24. USGS Minerals Information: Lithium - Mineral Resources Program
http://minerals.usgs.gov/minerals/pubs/commodity/lithium/
25. Roskill Information https://roskill.com/product-category/market-reports/minor-metals/lithium/
26. Benchmark Mineral Intelligence http://www.benchmarkminerals.com/
27. Tesla Motors: Gigafactory https://www.teslamotors.com/en_AU/gigafactory
28. 水晶球财经网: 锂产业锂矿还能涨多久?http://mt.sohu.com/20160229/n438822891.shtml
29. Mining Information Network: 2015-2020 China's Lithium Mining Market Trends and Investment
Prospects Assessment
30. Citi Research: The Future is Electric, October 2015