More investment needed in upstream lithium mining while structural supply deficit looms

More financial investment is needed in upstream lithium mining to tackle a structural lithium deficit expected in the coming years

Panelists at the Fastmarkets Lithium Supply and Battery Raw Materials conference held in Las Vegas on June 20-22 discussed the predicted lithium deficit.

“It always seems that mining projects take longer than expected and require more money than expected; [these], for me, are key issues withholding more investment from flowing into upstream lithium mining,” Chris Berry, founder of House Mountain Partners, said.

“Investors that I spoke with today are much more interested in lithium and cobalt refining, as you can get permitting and build [operations] in three-four years, not over ten years, as it takes for a mine,” he said.

“So, you are selling a very high-value product,” Berry added. “At the moment, it seems that refining and recycling are sexy topics, although none of them is relevant without more raw materials supply coming online.”

Tara Berries, senior manager at automotive company Rivian, echoed Berry’s view and added that the swings of lithium spot market prices should not deter further investments in upstream lithium mining — otherwise any financing delay would just extend project timelines that are already extremely long compared with downstream projects.

Joe Lowry, host of the Global Lithium podcast, agreed and highlighted that in the US, for instance, there is a significant gap between the number of midstream and downstream projects being announced and the very few upstream mining projects going forward, creating a gap in supply.

When asked about the impact of recycling within the lithium supply mix over the next decade, the panelists had mixed views, with Lowry expecting less than 12% of the supply mix to be recycled material in 2035 while Berry expected a share of around 20%.

Will Adams, head of battery raw materials research at Fastmarkets, added during the panel discussion that the way recycling will be treated in Europe would be something to watch out for, in terms of legislation around black mass and recycled raw materials remaining within Europe to make up for the lack of natural resources on the continent.

Daniel Jimenez, founder of consulting firm iLimarkets, and Ashish Patki, global sales manager for lithium producer Livent, agreed that in the next five years there will be a structural lithium deficit, and among the factors contributing to this structural deficit is the lack of technical know-how in the industry while it attempts to scale up and become more global.

“The delays in supply coming online are a big issue, but the lack of know-how is a bigger issue in my opinion. The lack of knowledge contributes to delays in lithium supply coming online; at present the know-how is very regionalized and emerging battery value hubs in North America and in Europe [are suffering because of it],” Jimenez said.

Keep up to date with all the news, insights and the volatile lithium price with the Fastmarkets NewGen lithium long-term forecast.

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