Joe Lowry ecrit que que des joueurs manquent le bateau du lithium pour 2023, dont Tesla. Elon Musk ne semble pas bien comprendre ses sources en Li ...
https://www.linkedin.com/pulse/lithium-investment-too-little-too-late-joe-lowry
When I entered the industry in 1991 there were only two global upstream lithium chemical suppliers (the current ALB and FMC) plus some level of local production in China and Russia. Several countries produced lithium in mineral form but only Australia became a significant lithium chemical feedstock supplier as demand grew. In 1991, global lithium chemical sales worldwide were less than $300 million and didn’t exceed $1 billion until a few years ago. Given the volume growth and higher prices, sales should exceed $2 billion in the coming year. Sales should crest the $5 billion mark before 2025.
Yes, lithium is a tiny global industry morphing into a small one but the reality is much of the huge energy transition that will play out over the next decade or two is dependent on a small group of companies producing the lightest metal. Many of the junior lithium companies trying to bring projects online have spent too much time raising capital to the detriment of actually bringing capacity to market on a timely basis. Will lack of investment in lithium “derail the green energy dream”? Hopefully not but it sure could delay it.
The likes of Tesla, VW, BYD, BMW, Panasonic, CATL and any other car or battery company boasting of ambitious e-transportation related plans should be concerned about lithium industry structure and the difficulty juniors are having raising capital. The same holds true for the rapidly developing ESS sector. In the not too distant future, the e-transport and ESS markets have sales well north of a hundred billion assuming new lithium suppliers get a few billion dollars of investment before 2021.
Lithium producers have historically been interdependent. Over the decades, FMC and the predecessor companies of ALB (Foote, Chemetall, Rockwood) produced for each other and filled gaps in each other’s product portfolio. In the 1990’s Foote (now ALB) supplied FMC carbonate to produce chloride which Foote had shipped to DuPont to convert to lithium metal for feedstock for their downstream organic and battery metal production. That is just one example. When SQM came along, FMC shut down their new carbonate plant in Argentina for a time and only operated their new chloride plant, preferring to supply SQM soda ash (sodium carbonate) and take lithium carbonate back via toll production. FMC was, in fact, SQM’s largest customer in the early days of their lithium business. My objective here is not to provide a lesson in lithium trivia but more to point out that "from the beginning" lithium producers partnered with each other to avoid capital investment or to optimize their overall cost structure.
Ironically the first vertically integrated lithium producer, FMC, has been seeking to exit lithium in favor of their Ag-Chem “crop protection” business at a time when Ganfeng, SQM, ALB and Tianqi are both expanding as well as doing partnership deals with existing players and newcomers to extend their franchises.
Ganfeng’s rapid rise has been fueled by their ability to form win-win alliances in the past with all of the “Big 3” and now in Argentina with LAC and Australia at Mt Marion and with Pilbara. Ganfeng is what FMC “might have been” had they stayed the course.
It is great to see the major lithium companies (ex FMC) are investing in significant capacity expansions and partnering with juniors to feed the capacity addition pipeline but unfortunately if lithium demand "hockey sticks" as many expect even the recent round of investment announcements will leave the market short in the middle of the next decade.
In a week where the first Tesla Model 3s are being delivered it is interesting to note it was a petroleum refiner from Thailand, Bangchak Corporation, that made the most recent significant lithium investment – closing last week on their investment in LAC while so many others (be it major hedge funds or the likes of Bill Gates and Jeff Bezos via “Breakthrough Energy Ventures”) sit on the sidelines. A Thai company in the oil business smart enough to see the need to diversify has more vision than many self proclaimed green energy investors. Sad but true.
While it is great that Cauchari and Pilbara are now financed; major projects like Sal de Vida and Nemaska are still in need of significant capital. Absent these projects and a couple more going into full scale construction by the end of 2018, a supply shortage will cause significant issues in the battery supply chain by 2023.
Elon Musk seems to think if he builds cars the lithium will come. His current chaotic battery supply chain should convince him that perhaps he should dedicate a bit of his creative thinking time to mundane matters like where the massive quantities of lithium he needs are going to come from.
Off course if you read some of the bank “research”, Hot Copper in Oz or the musings many "tweeters", you would believe every stray project from Oz to central Europe to the DRC will soon flood the market and move price back to prior levels. Spoiler alert – not going to happen.