SQM plans to keep its 25% share of the global lithium market, senior commercial vice president Daniel Jimenez told delegates at Industrial Minerals’ and Metal Bulletin’s inaugural Battery Materials conference in Shanghai on Monday April 16.
The Chilean producer is confident it will not lose market share even as supply grows to meet mounting demand from car manufacturers for electric vehicles (EVs).
Growing demand from the lithium-ion battery sector has led SQM to plan for rapid growth, with targeted lithium carbonate production capacity of 70,000 tonnes per year by 2018 and 100,000 tpy by 2019, up from 48,000 tpy currently.
Hydroxide production capacity, meanwhile, will rise to 13,500 tpy this year, from 6,000 tpy at present.
“Growing lithium demand triggered by the battery sector could reach levels of 600,000-800,000 tpy of lithium carbonate equivalent (LCE) within the next 10 years,” Jimenez said. “This means the lithium industry would require an investment of $10-12 billion to fulfill the booming battery demand.”
Although SQM has been authorized by the Chilean Economic Development Agency (Corfo) to reach a total production of 216,000 tpy of LCE by 2025, the company has not confirmed whether or not it plans to increase its total production to these levels. But the company admits that it is monitoring the Li-ion batteries sector closely so that it can position itself to meet global lithium demand.
Many existing and junior companies have announced plans to bring new lithium supply online following the sharp rises in lithium demand and prices over the past three years . But not everyone is confident that all of the forecast supply will come to fruition.
According to Jimenez, the lithium industry has a poor track record for delivering lithium projects on time and timescales for when supply will meet demand remains uncertain because historically supply has been overestimated.
“The lithium supply took 10 years to double, meanwhile, demand is anticipated to double over the next five years and to double again five years after,” Jimenez said during the conference.
Increasing in production capacity comes at a time when the cost of lithium production is currently significantly lower than the market price.
Industrial Minerals’ spot lithium carbonate battery grade price, ex-works China, was assessed at 145,000-150,000 yuan ($23,093-23,890) per tonne on Thursday April 12. This compares with production costs of the legacy brine producers, such as SQM, of under $5,000 per tonne.