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Shifts within the industry had affected pricing and impacted margins which had in turn impacted investor confidence. But the long-term demand outlook remains positive, Fastmarkets CEO Raju Daswani said during the panel.
“We’ve seen examples of growth within demand and also new sources [of demand] from whether it’s coming from energy storage and the drive for new energy coming from things like technology and AI, and, of course, data centers,” he added.
The current environment with low prices and growing demand for batteries is unsustainable but there is still optimism toward the industry going forward, according to the panelists.
“The market is at a pretty critical point, with capital being cut back, projects being curtailed and it’s going to rear its ugly face like the cycles normally do, probably sooner than later,” Lithium Americas’ President and Chief Executive Officer Johnathan Evans said.
“It’s just a moment in time and a question around timing,” Lithium Argentina’s CEO Sam Pigott said.
Resilience is diversification on the asset side, as well as on the customer side and end markets, according to Rio Tinto’s lithium chief strategy officer Sarah Maryssael.
The portfolio that Rio Tinto had built through the acquisition of Arcadium and subsequent acquisitions in Chile allows them to serve multiple markets. And this is leading to a resilient supply chain, Maryssael said.
“We’re well positioned to serve into the China LFP market with the brine assets producing carbonate, but at the same time focusing on delivering to the hydroxide market outside of China, which we think is going to be more niche, but is going to rely on Western suppliers that can feed into these plans,” she added.
For PLS, the decision to diversify outside of China around 2019 also made “good sense”, according to the company’s CEO Dale Henderson.
“The opportunity with POSCO came along for a codependent construct of our supply into a jointly owned facility in South Korea… It’s achieving that aim of diversification. And we think in time it shows promise of creating margin for us, as a business. And not only that, but [it is] creating a more resilient business,” Henderson said.
PLS is also looking to achieve “multi-asset operation and development at the left of the cost curve” in a “sustainable way,” Henderson said. He added that this can be achieved through partnerships with partners who are “like-minded” and “quick-moving”.Further consolidation is needed for the market to grow, and as a part of the maturing market, Maryssael said.
The key cornerstones of a successful JV are an understanding of what each group brings, according to Pigott.
“The most important thing is that there’s total alignment in terms of what we’re trying to achieve,” Pigott said, referring to Lithium Argentina’s JV with Gangfeng Lithium in their Cauchari-Olaroz site in north-west Argentina.
For Lithium Americas, the move to push ahead in execution and actively continue construction is key, according to Evans.
“The price will come. I’m confident of that. If it doesn’t, none of us will be here in five years…But after that, with once you execute, then we earn our dinner and then it opens up more opportunities for phase two or going beyond the resource that we have,” he said.
“It is just the basic playbook of balance sheet defense, ensuring that’s in great standing and then it’s cost out, ensuring that you get your cost to the floorboards as quickly as you can,” Henderson said.
“We’re at the back of several project investments; that all helps us get further to the left of the cost curve. So, with that in the rearview mirror, now it’s about sweating the asset, continue to focus on cost out and navigate through this part of the cycle to enjoy what we think is the inevitable up,” Henderson added.
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