Welcome to the August 2021 edition of the lithium miner news. August saw lithium prices rise strongly again and plenty of good news from the lithium producers as several of them advance their expansion and lithium hydroxide converter construction/plans.
Asian Metal reported during the past 30 days, 99.5% lithium carbonate China spot prices were up 1.87%. Lithium hydroxide prices were up 1.75%. Lithium Iron Phosphate prices were up 3.26%. Spodumene (6% min) prices were up 1.12% over the past month.
Fastmarkets (formerly Metal Bulletin) reports 99.5% lithium carbonate battery grade spot midpoint prices cif China, Japan & Korea of US$14.50/kg (US$14,500/t), and min 56.5% lithium hydroxide battery grade spot midpoint prices cif China, Japan & Korea of US$16.25/kg (US$16,250/t).
Benchmark Mineral Intelligence as of Mid-August reported China lithium carbonate prices of US$13,775/t (technical grade) and US$14,250 (battery grade), and for lithium hydroxide prices of US$16,550/t, and stated: "market contacts report expectations that spodumene feedstock prices will rise above $800/tonne (FOB Australia) in late Q3 as converters scramble for material".
Metal.com reports lithium spodumene concentrate (6%,CIF China) price of USD 865/mt, as of August 17, 2021.
Lithium carbonate & hydroxide, battery grade, cif China, Japan & Korea
2021 IEA forecast growth in demand for selected minerals from clean energy technologies by scenario, 2040 relative to 2020 - Increases Of Lithium 13x to 42x, Graphite 8x to 25x, Cobalt 6x to 21x, Nickel 7x to 19x, Manganese 3x to 8x, Rare Earths 3x to 7x, And Copper 2x to 3x
Source: International Energy Agency 2021 report
Benchmark Mineral Intelligence lithium demand v supply forecast
Source: Core Lithium courtesy of Benchmark Mineral Intelligence
Another lithium demand v supply chart
Source: Lithium South company presentation
UBS's EV metals demand forecast (from Nov. 2020)
UBS forecasts Year battery metals go into deficit
Source: UBS courtesy Carlos Vincens LinkedIn
BMI forecasts lithium deficits growing this decade
Source: Benchmark Mineral Intelligence (no link as via email)
On June 30 Mining.com reported:
CHART: Study predicts over 400% increase in copper, lithium, nickel battery demand. BNEF predicts annual demand for lithium-ion batteries will pass 2.7 terawatt-hours per year by 2030 - a 35% increase from the analytics company's forecast made last year.
On July 21 BloombergNEF released their New Energy Outlook 2021 stating:
Specifically, the following milestones will need to be achieved by 2030 to be on track to reach net-zero by mid-century:
- Add 505 gigawatts of new wind power each year to 2030 (5.2 times the 2020 total)
- Add 455 gigawatts of solar PV each year to 2030 (3.2 times the 2020 total)
- Add 245 gigawatt-hours of batteries each year to 2030 (26 times the 2020 total)
- Add 35 million EVs added to the road each year to 2030 (11 times the 2020 total)...
On July 23 Bloomberg Hyperdrive reported:
Tight battery market is next test for EVs after chip crisis. Rising demand from electric vehicles and challenges in securing raw materials will deliver a battery supply crunch for automakers already grappling with a chip crisis, according to a key Chinese manufacturer. "When the chip shortage is over, the major supply shortage the industry faces would be batteries," Yang Hongxin, chairman of SVolt Energy Technology Co... Demand for lithium-ion batteries from transport and energy storage will surge to as much as 5.9 terawatt-hours a year in 2030, putting a strain on supply chains, BloombergNEF said in an annual New Energy Outlook report published Wednesday.
On July 27 Benchmark Mineral Intelligence reported:
The battery megafactories are mainstream... At the time (2015), Benchmark was tracking seven lithium ion battery megafactories (or gigafactories)... Benchmark's Lithium ion Battery Megafactory Assessment now reads 225 plants and rising.
Note: According to Benchmark Mineral Intelligence battery cell capacity in the pipeline for 2030 is now at 4,300.3 GWh, which equates to about 3.44mtpa lithium in 2030, effectively 10x on 2020 levels.
On July 28 The Korea Herald reported:
Hyundai, LG collaborate to build EV battery plant in Indonesia. South Korea's leading automaker Hyundai Motor Group and battery producer LG Energy Solution are joining forces to establish a $1.1 billion electric vehicle battery plant in Indonesia, the companies said Thursday. The two companies signed a memorandum of understanding with the Indonesian government for the plant, which would produce 10 gigawatt-hours worth of NCMA (nickel, cobalt, manganese, aluminum) lithium-ion battery cells annually, enough for 150,000 electric vehicles, the firms said.
On July 28 Marketplace released a Chris Berry interview:
The road to an electric vehicle future is paved with lithium... The fact that the automotive manufacturers are going directly to the mine sites to lock up five-plus years of supply is unprecedented.
On July 29 Techcrunch reported:
What Tesla's bet on iron-based batteries means for manufacturers. Elon Musk earlier this week made his most bullish statements yet on iron-based batteries, noting that Tesla is making a "long-term shift" toward older, cheaper lithium-iron-phosphate (LFP) cells in its energy storage products and some entry-level EVs. The Tesla CEO mused that the company's batteries may eventually be roughly two-thirds iron-based and one-third nickel-based across its products. "And this is actually good because there's plenty of iron in the world," he added.
On August 3 Reuters reported:
CATL's new sodium ion battery to help ease lithium shortages. The development of a new sodium-ion battery by Chinese battery giant CATL is expected in the coming years to relieve pressure on lithium supplies, which are forecast to see shortages as early as 2022... CATL said last week it plans to build a supply chain by 2023 to produce sodium-ion batteries, which have lower energy density than lithium-ion models, but are fast charging and more resilient in cold temperatures... "It means there's a Plan B if there isn't enough lithium around," he said.
New York Battery Plant update binding sales increase.
- Additional binding contract signed with US Government supplier for US$74 million over 4 years bringing total minimum binding sales agreements to US$729 million or nearly A$1 billion.
- New York Plant Status - 17.85% complete.
- Internal Building clear-out to be completed by 16 August 2021.
- Environmental Justice Plan secured while Air Permit has been submitted and in public review phase and Aquifer Permits have been submitted...
iM3NY (Imperium3) - New York Lithium-ion Battery Plant. The Imperium3 consortium consists of Magnis Energy Technologies Ltd, C4V LLC New York and Boston Energy and Innovation (BEI). Magnis owns 63% of iM3NY and the plant is fully funded for Gigawatt scale production. The New York Battery Plant has multiple signed offtake agreements. NY State Government announced a US$13.25 funding package for the plant. The plant could support approximately 4-5 GWh with first production expected Q4 2021 - Q1 2022.
On August 9 Bloomberg reported:
Next-generation battery pioneer sees breakthroughs coming... In five years, it will be changes related to modifying anodes to add more silicon than we have today and using lithium metal. In 10 years' time, all the action will be on cathodes, and you'll pair it with lithium metal. Lithium metal is the end of the road for an anode-you can't get any better than that. Battery materials R&D will all shift focus from EVs to aviation in 10 years' time. We have batteries that are great for passenger sedans, and there's a 400-mile battery range car, but a large portion of your main market-long-range trucks and pickup trucks-is actually still weight-constrained and energy-density-constrained, so those would benefit a lot.
On August 10 the AFR reported:
Buy everything! JPMorgan bullish on lithium miners. JPMorgan's metals and mining team have re-thought supply and demand for lithium and come to one conclusion: buy all the lithium miners. The analysts put "overweight" ratings on all five ASX-listed lithium names under their coverage including IGO Ltd, Orocobre and its merger partner Galaxy Resources, Mineral Resources and Pilbara Minerals.
On August 11 Resource World reported:
Will battery minerals demand outstrip supply in the future?... This switch to EVs is an important part of the goal of the International Energy Agency's Paris Agreement to achieve net-zero carbon emissions by 2050... Another challenge facing critical mineral miners is the long lag time to explore a prospect, develop an economic resource, complete the Environmental Assessment process, gain social acceptance, prepare a bankable feasibility study and, finally, build a mine. According to the IHS report, between 2010 and 2019, this process averaged 16.5 years... The Clean Energy Transitions report also notes that in order to adhere to climate goals, the expected supply from existing mines and projects under construction will only meet half of the projected lithium and cobalt demands and 80% of copper needs by 2030. As a result, recycling efforts will play an important role.
On August 12 Argus Media reported:
China's power battery output, installed volumes rise. July power battery production rose by 185.3pc from a year earlier to 17.4GWh, with installed volume up by 125pc to 11.3GWh, according to data from the China Automotive Manufacturers Association (CAAM). Production and installed volume of lithium iron phosphate batteries were 9.3303GWh and 5.7986GWh respectively, exceeding ternary batteries volumes for the first time of 7.9862GWh and 5.4547GWh respectively.
On August 13 Benchmark Mineral Intelligence reported:
Tesla is feeling the combined effects of an ongoing global semiconductor shortage and a limited supply of tier one lithium battery cells, writing in its Q2 2021 earnings presentation that "due to the limited availability of battery cells and global supply chain challenges, we have shifted the launch of the Semi truck program to 2022." Tesla's 4680 cells, which are not yet at commercial production levels, are the likely route of the battery bottleneck which is delaying bringing the Semi to market.
On August 13 Seeking Alpha reported:
Tesla supplier and world's biggest EV battery maker raising $9B to expand. Tesla supplier CATL is planning to raise $9B through a private placement to help increase its production of lithium ion batteries, capitalizing on investor optimism over electric vehicles. China's top battery maker says it aims to raise 58.2B yuan ($8.98B) by placing 232.9M shares with institutional investors. CATL plans to use the proceeds to fund projects at six new and existing facilities in China's Fujian, Guangdong and Jiangsu provinces, as well as for research and development, and working capital.
On August 17 Bloomberg Hyperdrive reported:
EV makers eye bigger battery-metals role by inking mining deals... Electric-vehicle makers are pushing for an intermediary role in mining to secure supplies of key battery metals, according to the head of Wheaton Precious Metals Corp. "We've had discussions on that and Tesla has definitely explored these options," Chief Executive Officer Randy Smallwood said Friday in a phone interview. "There is a real concern on the battery metal side in terms of supply." ... Smallwood said he's seeing increasing interest from electric-vehicle makers to get more involved in the industry and has even had talks with "potential partners" interested in starting their own streaming companies for battery metals including cobalt, nickel and lithium... Tesla Inc. struck a nickel-supply deal with BHP Group last month after CEO Elon Musk had expressed concern about supply due to challenges in sustainable sourcing.
On August 23 SMM News reported:
Lithium prices well positioned to enter the "Long Bull Market". Under the global trend of electrification of vehicles, the global lithium demand is expected to increase from 430,000 mt in 2021 to 1.54 million mt of LCE in 2025, with a CAGR of 38%. Meanwhile, lithium supply and demand is expected to become tighter from 2021-2025.
On August 4, Albemarle announced: "Albemarle reports second-quarter results." Highlights include:
Net income of $424.6 million, or $3.62 per diluted share, including a gain on the sale of Fine Chemistry Services [FCS] business.
Adjusted diluted EPS of $0.89, an increase of 4%.
Net sales of $773.9 million, an increase of 1%; Net sales increased 5% excluding FCS.
Adjusted EBITDA of $194.6 million, an increase of 5%; Adjusted EBITDA increased 13% excluding FCS.
Full year 2021 outlook revised to reflect better than expected Lithium performance, lower interest expense and tax rates, offset by higher Bromine raw material costs and supply chain disruptions; guidance updated to reflect sale of FCS.
Completed the sale of FCS on June 1, 2021, in a cash and stock transaction valued at ~$570 million.
La Negra III/IV commissioning stage in process, commercial production expected to begin in first half of 2022.
H2 2021 - 50ktpa Kemerton Lithium Hydroxide Plant converter in WA due for completion (60:40 joint venture between Albemarle and Mineral Resources Limited).
Albemarle (60%)/Mineral Resources (40%) 50ktpa Kemerton Lithium Hydroxide refinery (production to begin by the end of 2021)
Source: The West Australian
On August 18, SQM announced: "SQM reports earnings for the second quarter of 2021." Highlights include:
Source: SQM website
On August 19 Seeking Alpha reported:
SQM lifts global lithium demand outlook, sees 40% rise this year... Q2 earnings improved to $0.31/share from $0.19 in the year-ago period, while earnings in the first half rose 65% over the first six months of 2020. SQM says Q2 lithium sales volumes surged more than 90%, while average lithium prices rose nearly 20% Q/Q, as sales contracts signed last year expire and a higher percentage of sales are invoiced based on the current pricing scenario... SQM says a tightening global market should help average prices continue to rise in H2. SQM is the world's second largest lithium producer and plans to increase its capacity 3.7x by 2025, faster than any other miner...
SQM (50%)/ Wesfarmers (50%) Kwinana 45,000 tpa LiOH refinery held via Covalent Lithium Pty Ltd (50/50 JV)
Source: Covalent Lithium (SQM/Wesfarmers JV)
On July 30, Mineral Resources announced: "Quarterly exploration and mining activities report April to June 2021 [Q4 FY21]." Highlights include:
...Mining Services production volumes increased 20% in FY21.
Mt Marion produced 114,024 dmt spodumene during the quarter, 5% higher than Q3 FY21. FY21 production of 484,984 dmt was 34% higher than FY20 and above guidance of 450,000 to 475,000 dmt. Shipments during the quarter were 21% higher than Q3 FY21. Shipments of spodumene concentrate during FY21 of 484,942 dmt were 23% higher than FY20...
Construction by Albemarle Corporation [NYSE: ALB] (Albemarle) of the 50ktpa Kemerton Lithium Hydroxide Plant continued. First production of battery grade hydroxide is expected by the end of 2021.
Investors can read my very recent Trend Investing article on Ganfeng here.
(Chengdu) Tianqi Lithium Industries Inc. [SHE:002466]
On August 22 Mining.com reported:
Tianqi, IGO produce first Australian lithium hydroxide for batteries... Perth-based IGO expects to be producing a saleable lithium hydroxide product by the end of 2021, and a high-quality battery grade product by the March quarter next year, Bradford said. The Kwinana plant is expected to reach its initial 24,000 tonne per year (tpy) capacity by the end of 2022, with another 24,000 tpy expansion to commission in 2024 before doubling that capacity again to 96,000 tonnes in the following years.
Tianqi Lithium (51%)/IGO (49%) Kwinana LiOH refinery - To produce 24ktpa LiOH by end 2022, 48ktpa to commission in 2024, then eventually reaching 96ktpa in the following years
Source: Tianqi Lithium
On August 5, Livent Corp. announced: "Livent releases second quarter 2021 results." Highlights include:
Higher volumes and pricing drove strong sequential improvement.
Completed $262 million equity issuance to fund capacity expansion.
Released 2020 Sustainability Report.
Raising full year 2021 Guidance.
Orocobre [ASX:ORE] [TSX:ORL] (OTCPK:OROCF)
On August 13, Orocobre announced:
Court approves scheme. Galaxy Resources Limited [ASX: GXY] (Galaxy) and Orocobre Limited [ASX:ORE, TSX:ORL] (Orocobre) are pleased to announce that the Supreme Court of Western Australia (Court) has today made orders approving the proposed merger pursuant to which Orocobre will acquire all of the shares in Galaxy (Galaxy Shares) by way of a scheme of arrangement (Scheme).
On August 16, Orocobre announced: "Scheme of Arrangement becomes effective further to its announcement on Friday, 13 August 2021."
Note: 1 GXY share became 0.569 ORE shares.
Upcoming catalysts include:
You can read the latest investor presentation here.
Galaxy Resources [ASX:GXY] (OTCPK:GALXF)
On August 6, Galaxy Resources announced: "Galaxy shareholders vote in favour of merger with Orocobre."
On August 13, Galaxy Resources announced: "Merger with Orocobre Ltd approved."
On August 16, Galaxy Resources announced: "2021 half year financial report."
On August 16, Galaxy Resources announced: "Galaxy Resources Limited [ASX: GXY] - Suspension from Official Quotation."
Pilbara Minerals [ASX:PLS] (OTCPK:PILBF)
On July 28, Pilbara Minerals announced: "June 2021 quarterly activities report." Highlights include:
Production and Sales:
Production of 77,162 dry metric tonnes (dmt) of spodumene concentrate (March Quarter: 77,820 dmt).
Record spodumene concentrate shipments of 95,972 dmt (March Quarter: 71,229 dmt), exceeding guidance of 75,000-90,000 dmt.
Record sales of 109,190 dmt of spodumene concentrate, inclusive of tonnes loaded on a vessel late in the March Quarter which departed early April 2021.
Tantalite concentrate sales totaled 39,234 lbs (March Quarter: 47,831 lbs).
Pilgan Plant improvement projects commissioning targeted for September Quarter.
Ngungaju Operation set for staged restart during December Quarter, targeting annual production capacity of 180,000 to 200,000 dmt by mid-2022 calendar year.
Strategic exploration and resource extensional drilling program along the boundary of the Ngungaju Operation identifies multiple zones of high-grade pegmatite mineralisation.
Combined Pilgangoora Project Mineral Resource update anticipated during the September Quarter...
Evaluation of and documentation for the POSCO Downstream Joint Venture [DSJV] opportunity further progressed during the June Quarter, with parties targeting a Final Investment Decision in late August 2021.
BMX Digital Sales Platform ready for launch, with the first cargo auction scheduled to take place imminently.
Memorandum of Understanding signed with Calix Limited to jointly complete a Scoping Study for a demonstration plant for the potential production of value-added lithium salts/chemicals.
Quarter-end cash balance of $115.7M, inclusive of $16.0M of irrevocable bank letters of credit for shipments completed up to June 2021.
On July 29, Pilbara Minerals announced:
Results of inaugural BMX auction. Successful online auction of spodumene concentrate via BMX platform. During the three-hour auction window, parties placed a total of 62 online bids ranging from US$700/dmt to US$1,250/dmt FOB Port Hedland, for a 'spot' 10,000dmt cargo (SC 5.5%) of spodumene concentrate from the Pilgangoora Operation.
On August 3 Stockhead reported:
Diggers and Dealers Day 2: Lithium supply shortage is real, says Pilbara Minerals... Proof in the pudding last week came from the sale of 10,000t of 5.5% Pilgangoora concentrate on its new Battery Metals Exchange platform for US$1250/t, around 3x the contract prices it was receiving 12 months ago. "Prior to this auction the maximum price referenced for spot was about US$900/t," he told delegates at the Diggers and Dealers Mining Forum in Kalgoorlie today. "Again, the icing on the cake is this product is a little bit like our discard, it's 5.5%, the equivalent headline price achieved (for 6% product) is over US$1400/t... "China has built too much conversion capacity for the available supply."
AMG Advanced Metallurgical Group NV [NA:AMG] [GR:ADG] (OTCPK:AMVMF)
On July 28, AMG Advanced Metallurgical Group NV announced: "AMG Advanced Metallurgical Group N.V. reports second quarter 2021 results." Highlights include:
...AMG Engineering is building AMG's first industrial battery, a Hybrid Lithium Vanadium Redox Flow Battery System for use in one of our operating units to flatten production-driven spikes in electricity demand and thereby reduce CO2 emissions and energy costs.
The new all-solid-state-battery (ASSB) materials pilot plant of AMG Lithium in Frankfurt, Germany, has provided samples to all of the major battery manufacturers working on the emerging transformation to ASSB technology.
Revenue increased by 44% to $298.4 million in the second quarter 2021 from $207.6 million in the second quarter 2020.
EBITDA was $31.4 million in the second quarter of 2021, over four times higher than second quarter 2020 EBITDA of $7.8 million, marking the fourth straight quarter of sequential improvement.
Cash from operating activities was $23.0 million in the second quarter of 2021, and $42.9 on a year-to-date basis, more than double the total cash from operating activities for full year 2020.
Net income attributable to shareholders was $3.6 million in the second quarter of 2021 compared to a net loss of $12.5 million in the second quarter of 2020.
AMG's liquidity as of June 30, 2021, was $511 million, with $341 million of unrestricted cash and $170 million of revolving credit availability.
AMG declares an interim dividend of €0.10 per ordinary share, to be paid in the third quarter of 2021...
You can view the latest company presentation here.
2021 - Progress on lithium projects in Zeitz, Germany and in Zanesville, Ohio, both in the planning stage.
2021--> - Stage 2 production at Mibra Lithium-Tantalum mine (additional 40ktpa) planned.
2023--> Lithium hydroxide facility in Bitterfeld-Wolfen Germany with production set to begin in 2023.
Lithium Americas [TSX:LAC] (LAC)
On August 5, Lithium Americas announced: "Lithium Americas reports second quarter 2021 results." Highlights include:
Construction activities at Cauchari-Olaroz remain on track to achieve first production by mid-2022 on the initial 40,000 tonnes per annum ("tpa") operation...
In May, the Company announced in partnership with Ganfeng Lithium Co. Ltd., the approval to commence development planning for a second stage expansion of at least an additional 20,000 tpa of lithium carbonate equivalent ("LCE").
Results of a Feasibility Study on the first phase of Thacker Pass (for at least 30,000-35,000 tpa of lithium carbonate) ("Phase 1") are expected by year end.
Engineering is underway to consider a 20,000 tpa lithium hydroxide chemical conversion plant, to provide flexibility to meet potential customer and partner needs.
The Company continues to evaluate partnership and financing opportunities for Thacker Pass to advance and de-risk the project.
The process testing facility in Reno, Nevada, continues to operate with enhanced COVID-19 protocols in place and has produced over 30,000 kg of lithium sulphate solution.
In February 2021, claims were filed against the Bureau of Land Management to appeal the issuance of a Record of Decision for Thacker Pass. The Company has been advised a final ruling is expected by January 2022.
Construction remains on target to begin in early 2022, following the receipt of remaining state permits and water right transfers, and resolution of the appeal.
As at June 30, 2021, the Company had $505 million in cash and cash equivalents and $156 million in undrawn credit...
In July 2021, the Company completed a strategic investment in Arena Minerals Inc. [TSX-V: AN] ("Arena Minerals") of $5 million for an approximate 12.9% equity interest (14.6% on a fully diluted basis).
The Company engaged a consultant to provide an estimate of the carbon footprint and water impact for Thacker Pass and Cauchari-Olaroz.
NB: LAC owns 49% of the Cauchari-Olaroz project and partners with Ganfeng Lithium (51%).
Investors can read my article "An Update On Lithium Americas."
The LIT fund was higher in August. The current PE is 35.35. My updated model forecast is for lithium demand to increase 4.1 fold between end 2019 and end 2025 to ~1.2m tpa, and 10.0x this decade to reach ~3.5m tpa by 2030.
Note: A Nov. 2020 UBS forecast is for "lithium demand to lift 11-fold from ~400kt in 2021 through to 2030."
LIT Fund 10 year price history
Source: Seeking Alpha
August saw lithium prices rise again strongly the past month.
Highlights for the month were:
As usual all comments are welcome.
Thanks for reading the article. If you want to sign up for Trend Investing for my best investing ideas, latest trends, exclusive CEO interviews, chat room access to me, and to other sophisticated investors. You can benefit from the work I've done, especially in the electric vehicle and EV metals sector. You can learn more by reading "The Trend Investing Difference", "Subscriber Feedback On Trend Investing", or sign up here.
This article was written by
Disclosure: I/we have a beneficial long position in the shares of GLOBAL X LITHIUM ETF (LIT), AMPLIFY LITHIUM & BATTERY TECHNOLOGY ETF (BATT), ALB, JIANGXI GANFENG LITHIUM [SHE: 2460], SQM (NYSE:SQM), ASX:ORE, ASX:PLS, AMS:AMG, TSX:LAC, TSXV:NLC, ASX:CXO, ASX:NMT, SIGMA LITHIUM [TSXV:SGMA], VULCAN ENERGY RESOURCES [ASX:VUL] , SAVANNAH RESOURCES [XETRA:SAV], LITHIUM POWER INTERNATIONAL [ASX:LPI], GLOBAL LITHIUM RESOURCES [ASX:GL1], LITHIUM ENERGY LIMILTED [ASX:LEL], CRITICAL ELEMENTS LITHIUM [TSXV:CRE], INTERNATIONAL LITHIUM [TSXV:ILC], ARENA MINERALS [TSXV:AN] either through stock ownership, options, or other derivatives. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.
Additional disclosure: The information in this article is general in nature and should not be relied upon as personal financial advice.