It is reported that Australian geologists recently discovered a huge lithium deposit in a remote exploration site in Pilbara.
This is the latest example of the discovery of lithium ore in Australia, further consolidating Australia’s position as the world’s largest supplier of key components of lithium-ion batteries.
“Australia is now the world’s lithium capital, and Pilgangoora is one of the largest lithium mines in the world.” Neil Biddle, one of the team’s geologists and co-founder of Pilbara Minerals, said, “We (Australia) are global leaders in gold and iron ore, and we can achieve the same success in lithium mining.”
It is reported that the company’s lithium ore and processing plant went into operation last November.
Pilgongura Mine is one of six lithium mines opened in Western Australia in the past two years. Optimistic market forecasts for sales prospects of electric vehicles and energy storage systems have led to a surge in global demand for battery raw materials, and these lithium mines have emerged as the times require.
UBS predicts that by 2020 Australia will surpass Latin American rivals in lithium production, accounting for half of global production, putting a country known for exporting highly polluted coal and iron ore at the forefront of a green energy revolution.
The lithium boom is attracting huge investments in new mines, and some investors have pledged to invest A$3 billion in five lithium hydroxide refineries.
These investors include heavyweight companies such as Albemarle in the United States, Sociedad Qumicay Minera in Chile and Tianqi Lithium in China, as well as a large number of small miners and new entrants in Western Australia.
This is part of a broader effort by global mining companies to explore, mine and process battery raw materials, including nickel, cobalt and graphite.
Australia is seeking to profit from this frenzy by encouraging companies to move beyond mining and ore processing and invest in more complex precursor production operations (metal and chemical mixtures used to produce battery cathodes).
This is the most profitable link in the supply chain. According to the World Economic Forum (WEF), it will boost the global lithium-ion battery market from $60 billion in 2017 to $100 billion in 2025.
In Perth, the Western Australian government is even studying whether the state can become the center of niche batteries. In recent years, the state has failed to attract such value-added activities in the iron ore boom.
“We never succeeded in steel because other people already have a foothold in that area,” said Bill Johnston, Mining Minister of Western Australia.
“But it’s about new needs, not existing ones… This is a potentially valuable opportunity.
Not everyone believes that.
Skeptics warn that if sales of electric vehicles are disappointing or optimistic predictions that lithium demand will triple in 10 years prove too optimistic, the supply boom could collapse. At the same time, advances in battery technology may also lead to alternatives to lithium, which may reduce demand.
There are also warnings that lithium prices are volatile and lack the transparency of other battery materials (such as nickel) traded on the London Metal Exchange (LME).
In Asia, the price of lithium carbonate, the most widely used form of lithium, has fallen by a third since the beginning of last year and is now at a two-year low, according to data compiled by Benchmark Mineral Intelligence, a research institute.
Morgan Stanley estimated in February last year that prices would fall by 45% by 2021 as a number of low-cost brine lithium extraction projects in Chile were launched. The bank predicts that this development will challenge a new generation of producers in Australia and China.
From 2016 to 2020, the annual production of lithium by Australian mining companies will nearly triple to 180,000 tons, far exceeding the competitors of Chile, Argentina and China, accounting for about half of the world’s total supply.
The factors driving Australia’s dominance in the market include delays in Latin American projects, rapid delivery of Australian projects, and increased customer preference for lithium hydroxide (rather than lithium carbonate) products as a result of changes in battery technology.
At present, Australia has become a world leader in battery material mining and will soon become a major lithium hydroxide processing country.
However, further up the value chain, manufacturing battery precursors, cathode materials and niche batteries is a much more difficult challenge. At present, China, Korea and Japan, which are the world’s leading countries, have a pioneering advantage, expertise and a lower cost base than Australia.
“From mining underground lithium to making batteries, ores, spodumene, hydroxides, precursor chemicals, and anodes and cathode batteries are needed. At present, we are dominant in the first two markets and are close to having a large share in the lithium hydroxide market.
Johnston said. “(We now need to) make sure that we take every step along this path, and then, perhaps in the future, there will be specific reasons to make batteries in Australia.”