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Monday, May 20, 2024
Mugglehead Magazine
Alternative investment news based in Vancouver, B.C.


Global lithium metal production insufficient to meet growing demands, Benchmark says

China, a dominant influence, produced 90 per cent of the world’s lithium metal last year

Global lithium metal production insufficient to meet growing demands, Benchmark says
Benchmark presents at its Giga Europe lithium conference in Sweden last month. Photo credit: Benchmark Mineral Intelligence

Britain’s battery metal supply chain expert Benchmark Mineral Intelligence has predicted a major supply deficit for lithium metal in the years to come. This will result in limited production of next-generation batteries in 2024.

Benchmark released a summary of its new Solid State and Lithium Metal Forecast report early this month. Therein, the agency discusses how increasing usage of lithium metal in industries unrelated to batteries will result in a significant shortage of the commodity required for state-of-the-art battery cells.

Benchmark has estimated that there will be a 57 gigawatt hour (GWh) deficit by 2026. The mineral expert says if all lithium metal produced this year was used for lithium metal batteries, the industry would be capable of supporting only about 7.5 GWh of battery cell production. This measurement is commonly used to quantify electricity generation and consumption.

“As next generation lithium metal batteries have developed from low amp-hour cells to, in some cases, up to 100 amp-hour cells, the market maturity and new demand for lithium metal has increased quite significantly,” Benchmark analyst Rory McNulty said.

He says the demand observed today is being propelled by next-generation lithium metal batteries that have much more strict production requirements than those previously available. The demand for battery-grade lithium metal in previous years has been primarily driven by the aerospace alloy and conventional battery markets, McNulty says.

Benchmark goes on to say that next-gen batteries require a lithium foil for their anodes that is much thinner than standard batteries. McNulty believes this is pushing manufacturers to their limits.

“Meeting these requirements is tough, and drives cost up significantly,” McNulty said. “This technical barrier is a key constraint of the industry and several companies are exploring novel, bottom-up approaches to overcome this challenge.”

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China dominates battery metal market; producers turn to lithium chloride

China, a country known for its dominance in the rare earths market and elsewhere, currently produces about 90 per cent of the world’s lithium metal. The nation’s leadership in the field is expected to continue; it plans to increase its capacity two-fold within the next four years.

Meanwhile, some lithium operators have been turning to producing lithium metal’s precursor chemical: lithium chloride. Benchmark says that producers can source this chemical directly from lithium brine, but the level of purity obtained from extraction is often unsuitable for next-gen batteries.

When there is a shortage of lithium chloride and no direct suppliers available, the chemical can be produced by converting lithium carbonate too. However, this is a costly process, Benchmark says.

Lithium South Development Corporation (TSX-V: LIS) (OTCQB: LISMF) (Frankfurt: OGPQ) is a Canadian company operating in Argentina that recently started producing these chemicals from brine.

The lithium operator has successfully produced a highly-concentrated lithium chloride brine solution and a bulk lithium carbonate product with near-battery-grade purity of 99.5 per cent. This innovation will enable Lithium South to succeed in the broader market for lithium chemicals.

The growing demand for lithium metal and other related chemicals will be beneficial for Lithium South and others going forward, serving as employment and financial security.

Read more: United States Army general visits Argentina to strengthen countries strategic alliance

Read more: New green energy technique could kick lithium demand into high gear

Benchmark hosts battery metal conference in Stockholm

The agency held a major conference at the city’s Grand Hotel last month. Sweden’s Giga Europe 2024 event was focused on discussions regarding the mass production of lithium-ion batteries.

It prioritized the development of sustainable battery supply chains, critical minerals and recycling methods, among other things.

Renowned attendees included Sweden’s Deputy Prime Minister Ebba Busch; the Vice President of the European Commission, Maroš Šefčovič; and Canada’s Ambassador to Sweden, Jason LaTorre.

The forum was sponsored by major companies like Volvo ADR (OTC: VLVLY) and Umicore Group Unsponsored Belgium ADR (OTC: UMICY). Organizations like the Swedish Energy Agency and the International Lithium Association were supporters as well.


Lithium South Development Corporation is a sponsor of Mugglehead news coverage


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