JOHANNESBURG (miningweekly.com) – Difficulty in finding financing for many of the lithium projects that mining companies are prepared to launch is seen as one of the main constraints to a 25% electric vehicle (EV) adoption rate by 2025.

UK-based mining investment firm Cadence Minerals estimates that lithium compound demand is set to be as much as 800 000 t/y by 2025, but that supply will fail to keep up.

“There is a pipeline of projects which will allow the penetration of EVs of 25%; however the large majority of these do not have financing in place. By our estimates, there is some $8-billion to be invested to hit production targets and, given the timelines to production, it seems unlikely that there will be enough supply to deliver 800 000 t of lithium an annum by 2025,” the company, which has invested in South American and European lithium projects, said on Friday.

The primary driver for increasing demand in lithium and lithium compounds is the penetration of EVs, the adoption of which have been made mandatory in several countries. Many car manufacturers have announced plans to electrify vehicles, including General Motors, Mercedes Benz, Volkswagen and Volvo.

“We continue to see plenty of evidence of demand growth,” Cadence said, pointing to the fact that Benchmark Mineral Intelligence is currently tracking 26 battery mega factories, compared with only three four years ago.

Cadence holds an interest in London-listed lithium asset developer Bacanora through a direct equity holding of 8% and a 30% stake in the joint venture interest in the companies forming part of the Sonara lithium project, in Mexico. Bacanora also owns the Zinnwald lithium project in Germany.

The investment firm’s other battery mineral investments include a 20% stake in the Cinovec lithium/tin deposit, in Czech Republic, through a direct shareholding in European Metal Holdings. It has also recently acquired 100% of six prospective hard rock lithium assets in Argentina.

Cadence is increasingly shifting its investment focus to early stage lithium assets.