TORONTO (miningweekly.com) - TSX-listed Talison Lithium, the biggest pure-play producer of the metal, will complete a capacity expansion at its Australian operations early next year, and is already considering further increases as demand continues to rise.
Demand for lithium from China was so strong in the September quarter that the company actually sold a batch of crushed ore straight to customers there, as the processing capacity at its Greenbushes operations lagged behind rising demand.
The high grade of the ore means Chinese chemical producers can process the ore directly into lithium chemicals, but the economics are not as attractive as buying concentrates from Talison and so these kinds of sales will only be a "short-term measure" to meet market demand until the company completes the stage-one expansion of its chemical-grade plant, CEO Peter Oliver said on a conference call.
The expansion by 50 000 t/y of lithium concentrate will be completed early 2011, and the company is in the process of planning a second-stage expansion, based on the demand-growth outlook, he said.
Talison listed on the TSX in September after acquiring Canadian junior Salares Lithium.
The company operates relatively low-cost hard-rock lithium mining operations near the town of Greenbushes, about 250 km south of Perth.
It also operates two processing plants, producing technical-and chemical-grade lithium concentrates respectively, which it sells to China.
Lithium is used in the batteries of electric-powered vehicles and lithium-ion batteries also power a wide range of other products, including mobile phones and laptop computers.
"The Chinese government continues to adopt policies and provide government financing and incentives for developing and adopting clean technologies," Oliver said.
"As a result, many of Talison's Chinese customers continue to expand their operations, thereby fuelling increasing demand for Talison's chemical-grade lithium concentrate."
The company is now seeing a firm recovery in demand for technical-grade lithium concentrates, Oliver commented.
The firm has seen demand from North America and Europe in particular increasing "substantially", he said.
As a result, Talison is studying a potential increase in capacity of its technical-grade plant.
The company produced a total of 80 729 t of lithium concentra in the three months ended September 30, and sold 52 524 t during the period.