Current lithium expansions enough to meet demand - Talison CEO

17th May 2011 By: Matthew Hill

Current lithium expansions enough to meet demand - Talison CEO

TORONTO (miningweekly.com) – Lithium demand won’t be sufficient to justify new mines until the second half of the decade, with expansions at current sources meeting the world’s requirements, the biggest primary producer of the metal, Talison Lithium, said on Tuesday.

“The key thing is, we don’t see there being an opening for a new producer until the second half of this decade, and that would include for our own Salares project,” Peter Oliver told Mining Weekly Online.

TSX-listed Talison, which owns the Greenbushes mine in Australia, is more than doubling production at the operation to 740 000 t/y of lithium concentrate, starting next year, at a cost of around A$70-million.

Global demand for lithium is expected to more than double from 2010 levels by 2014, mainly driven by increased consumption from the battery sector – the element is used to make batteries that go into cell phones, laptops and electric vehicles.

China is the biggest lithium consumer.

“This expansion wouldn’t be happening at all if we didn’t have China banging on the door aggressively seeking more product,” spokesperson Todd Hilditch said.

Oliver said Talison would only supply as much lithium as the market could absorb from Greenbushes.

“We expect the market will meet us sometime in the next two or three years to be fully producing,” he added, saying that without the phase-two expansion at Greenbushes, there would likely be a supply shortfall in this timeframe.

The company also owns the Salares 7 project in Chile, where it started drilling this year. Oliver said this operation would not start producing until the second half of the decade.

Talison last week posted a near trebling in pre-tax earnings for the March quarter year-on-year, to A$18.3-million, as output and prices rose.

CHEMICALS PLANT

Oliver said in a telephone interview that the company was considering building a chemicals plant in Australia, which would produce battery-grade lithium.

He pegged the capital costs at $160-million to $200-million for a 20 000 t/y lithium-carbonate equivalent plant, and said the facility could start production from 2014 at the earliest.

Oliver was upbeat on prices for lithium, also used in the glass and ceramics industries.

“We are reaching a point where all of current global production is sold, and prices will have to start moving,” he said.