During the CRU World Copper Conference Asia in Shanghai this week, the metal giant Anglo American plc (LON: AAL) said it is looking to join the race for acquiring lithium in sight of the upcoming green energy demands worldwide.
Lithium is the main component of electric vehicle batteries and the metal has been in demand as countries and companies transition to carbon-free energy.
“We don’t have a lithium mine and we don’t trade it, but we are on the lookout for lithium,” Anglo American head of marketing Paul Ward told Reuters at the conference. The conference ran from Nov. 15-16 and was organized in collaboration with CESCO and China Minmetals Corporation.
During the conference, Ward added that its customers are requesting other metals including nickel and lithium. Anglo American is currently offering debt financing for brown or green field projects trying to get hold of off-take material for the battery metals.
“It’s a very competitive market, but we’re very engaged in and then we put resources and investment behind it to find the right opportunity,” Ward said.
Anglo American has been expanding its commodity offerings in the last years. In 2020, it bought the Woodsmith fertilizers mine for £405 million after its previous owner, Sirius Metals, failed to raise enough funding. Woodsmith holds the largest deposit of polyhalite, which has potassium, calcium, magnesium and sulphur. The acquisition led the miner to a US$1.7 billion writedown in February.
“If there are opportunities to secure lithium that’s already been mined, that we feel comfortable with, and that is in the right form that we can sell directly to our customers, then that’s also of interest,” Ward added.
The race to produce environmentally responsible vehicle batteries is on
According to the International Energy Agency, last year’s supply of lithium was shaded by the high lithium demands for the EV sector. Last year, electric vehicle (EV) battery manufacturers accounted for 60 per cent of global demand for lithium, 30 per cent for cobalt and 10 per cent for nickel.
Last year, EV sales reached 10 million and this year sales are expected to reach 14 million. Nonetheless, EV sales growth rates in the U.S. and Europe are slowing down, according to an HSBC report. This has caused carmakers in the United Kingdom and the U.S. to offer discounts to incentivize EV purchases.
Most lithium comes from Chile and Australia, which were responsible for almost 77 per cent of global production in 2022. However, Australia produces its lithium by mining hard rock spodumene while in Argentina, Chile and China it comes as brine. Mining lithium from hard rock is three times as carbon-intensive as brine.
Bolivia currently has the largest reserves of lithium, followed by Argentina, the United States, Chile, Australia and China.
Argentina could become a pivotal player in the lithium industry
In the upcoming years, Argentina will become a pivotal player in the lithium industry. With the United States and Europe intensifying downstream investments in EV-related industries, a global race for African and South American critical minerals has been ignited.
The country already has a strong pipeline of lithium projects reaching production very soon and is expected to surpass Chile’s production in the short term.
In 2022, Argentina’s lithium production reached almost 38,000 metric tons, sourced from facilities like Sales de Jujuy, overseen by Allkem Limited (ASX: AKE), and the Fénix project in the Salar del Hombre Muerto, operated by Livent Corporation (NYSE: LTHM).
Lithium South Development Corporation (TSXV: LIS) (OTCQB: LISMF) (Frankfurt: OGPQ) operates within the expansive 3,287-hectare Salar del Hombre Muerto, where it has significantly increased its lithium resource by 175 per cent.
Positioned between two major lithium producers, the Hombre Muerto North Lithium Project is neighbored by the US$4 billion lithium project led by Korean giant POSCO Holdings (KRX: 005490), while Allkem and Livent, in their new merger, are set to develop the west and east portions of the Salar.
With Argentina emerging as a pivotal player in the lithium industry, the dynamics of lithium production and its strategic significance in the transition to carbon-free energy remain central to the evolving landscape of sustainable technologies and electric mobility.
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