The Economics of Lithium, 10th edition 2006

Abstract

What the report gives you

• Independent, in-depth research and analysis
• Essential market intelligence for successful business planning
• Detailed survey of production in 36 countries
• Up-to-date profiles of the activities of over 20 current and potential lithium producing and processing companies, including Sons of Gwalia, SQM, Chemetall GmbH and FMC Lithium.
• Forecasts for end-use consumption and world supply and demand

Report highlights

The lithium market can be divided between lithium chemicals (sourced from brines or minerals), which account for some 80% of total consumption, and lithium minerals consumed directly. These market shares have almost reversed since SQM entered the lithium carbonate market in 1996.

Reflecting growth in demand, world lithium production is estimated to have increased by some 4%py between 2002 and 2005. The industry is characterised by a high degree of concentration of production, with two countries a' Chile and Australia a' together accounting for nearly two-thirds of world output and for most of the growth in production in the mid-2000s.

Sons of Gwalia in Australia produces some 60% of world output of lithium minerals (as spodumene) from Greenbushes hard rock deposit, with output estimated at 120,000t (gross weight) in 2005. SQM of Chile, with shipments of 27,800t lithium carbonate in 2005, accounted for 36% of world production. This share will increase in 2008, following the company's planned expansion in production capacity to 40,000tpy.

An interesting feature of world lithium production is the potential emergence of China as a leading supplier. The development of technology to extract lithium from high-magnesium brines has led to the start of lithium carbonate production from salt lakes in Qinghai and Tibet provinces. In late 2005, CITIC Guorun began construction of a 35,000tpy lithium carbonate plant to exploit lithium reserves in Xitai Ginar salt lake in Qinghai province. Production was scheduled to start in 2006.

Portable electronic consumer products will remain the main area of growth for secondary batteries through 2010, with shipments to the Asian cellular phone market alone estimated to rise by 50%py and growth rates in Russia and Poland reaching 70%py. Longer-term growth will depend on the market penetration achieved by hybrid electric vehicles and on the commercialisation of safe and cost-effective lithium batteries to power them.