Only a matter of time!Future?? February 11, 2017 4 Likes 0 Comments In my last post I mentioned that I do not consider myself a lithium seer - so why would I take on the task of discussing the lithium world a few years hence? Better question: why not? If you follow my twitter feed @globallithium you know that for surgical reasons I cant travel for a few more weeks. Once mid-March rolls around my global trotting will resume but for now I am hunkered down with my four legged staff pondering the future of lithium. Heres what Yuki, Fiona and I see through our translucent crystal ball: The "Big Five" 1) SQM the quiet and oft-maligned fertilizer company had an epiphany circa 2016 about the lithium market and the future of the lightest metal. They did some extreme vetting of lithium projects outside of Chile while patiently winning the civil war with the long gone head of CORFO Eduardo (dont call me Fast Eddie) Bitran. SQM did what ALB failed to do - capture the largest share of the lithium e-transport market as it hit critical mass. SQMs lithium operations are now on three continents. The company's other, more cyclical businesses, are a nice complement to their global leadership in purveying the element that powers the green revolution. 2) Albemarle it is not easy to destroy a great franchise, ALB remains #2 (for now). Even a crazy royalty deal in Chile a few years back, brine mix issues and paying too much in asset buys and acquisitions did not kill the golden goose that Seifi Ghasemi carefully crafted before selling Rockwood to ALB. The new CEO of the Charlotte based lithium giant is working hard to right the ship and get EBITDA above the soft targets of the recent past. ALBs former mantra of capturing 50% of industry growth proved to be high by about 3X. 3) Ganfeng a charter member of the lithium alliance known by many as the good guys (more on that later) has had an unparalleled rise in less than two decades. No longer considered a Chinese Lithium Company in 2020 they are known as a global industry power that happens to be based in Jiangxi Province, China. Ganfengs creativity, penchant for partnerships and skill at multiple forms of lithium processing served as a platform for expanding into both the lithium ion battery market and recycling. Ganfeng has multiple hard rock and brine assets across the globe. 4) Tianqi no longer a member of the evil empire with ALB; the messy parting with their former partner in the Talison JV was just another bump in the road for the politically savvy company based in the home of the pandas aka Chengdu, China. Other issues Tianqi is dealing with are rising costs at Greenbushes and the extended start-up issues at their hydroxide plant in WA. Despite being unhappy they were leap-frogged by Ganfeng as the number one lithium company based in the middle kingdom; the only top five company with a women CEO should not be underestimated. Tianqi will remain a strong competitor well into the future. 5) The fifth spot is a tie: Galaxy and Lithium Americas (LAC). As improbable as this seemed in 2015, the powerful combination of insightful moves and good fortune have enabled both of these companies to transition from industry footnotes to formidable players. Galaxys well timed restart of Mt Cattlin and the rapidly growing market enabled the development of soon to be producing Sal de Vida without bringing in a deep pocketed partner. Lithium Americas spent years as the Rodney Dangerfield (someone who gets no respect) of the lithium industry. In early 2016 they sold half of their flagship project in Argentina to SQM for a pittance and were widely scorned. By early 2017 it was clear the move was prescient SQM was clearly all in on developing a world class lithium asset in Argentina and Ganfeng became both LACs largest share and debt holder. LAC along with SQM and Ganfeng collectively became known as the good guys a counterweight to the heavy handed evil lithium empire led by then #1 ALB. The rapid development of Cauchari phase 1 enabled phase 2 construction to start earlier than expected. In addition to becoming a significant brine player, LAC appears to be on the verge of a major success unlocking lithium in the clays of Nevada. This breakthough coupled with a direct clay to hydroxide process will silence former critics (including yours truly) who often cited the failure of other highly touted clay projects that never produced commercial product. Other Industry Players FMC - the once proud Big 3 leader is trying to recapture its former glory as their new CEO was quick to grasp the flawed strategy and virtual failures of the prior regime. Unfortunately playing catch up takes time. Being #7 doesnt feel lucky in Philadelphia. Orocobre the company who entered the market with a huge tailwind and an underperforming operation is now juxtaposed next to SQM/LAC's world class operation at Cauchari. Propped up by a market shortage for over half a decade, how long ORE stays independent remains an open question. In 2020 there will be at least three new suppliers outside of China. I will wait until later in the year to discuss them in greater detail but think in terms in of PLS, NAL and hopefully NMX. The Market Most, including me, undershot 2020 demand as the hockey stick upswing started a couple years early. E-transport and ESS both grew more than the consensus estimates and extended the tight market to at least 2025. Even with ten significant lithium suppliers online by the end of 2020, average global lithium carbonate prices will still be above $12/kg on January 1, 2021. Perhaps significantly higher. Anyway it is time to put the crystal ball in the recycle bin, walk the dogs and deal with more current issues in the next post. Written by Joe Lowry Joe Lowry One of the World's Leading Lithium Market Experts LikeShare on LinkedInShare on FacebookShare on Twitter 4 likes0 comments Be the first to comment and start the conversation!