https://www.miningweekly.com
Flow|Infrastructure|Mining|PROJECT|Projects|Refining|supply-chain|Flow|Products|Infrastructure|Operations
Flow|Infrastructure|Mining|PROJECT|Projects|Refining|supply-chain|Flow|Products|Infrastructure|Operations
flow-company|infrastructure|mining|project|projects|refining|supply chain|flow-industry-term|products|infrastructure|operations

Lithium project delays, more M&A on the cards as market transitions – Wood Mac

1st February 2024

By: Mariaan Webb

Creamer Media Senior Deputy Editor Online

     

Font size: - +

The lithium market is entering a period of transition, with the once-unstoppable demand growth for the key battery material now decelerating as the market matures and electric vehicle (EV) sales are subdued.

“Lower government incentives and inadequate infrastructure are expected to curtail EV sales in 2024,” says Wood Mackenzie (Wood Mac) principal analyst for lithium, Allan Pedersen.

He expects global plug-in EV sales to rise by 33% this year, a significant drop from the average yearly growth of 71% observed between 2021 and 2023. This shift in the EV market will have implications for lithium demand.

A declining intensity of lithium use in evolving cathode chemistries will also impact on demand. Wood Mac reports that a rise in lithium/iron/phosphate cathode chemistries, which require lower lithium content, is outpacing the growth of high-nickel cathode chemistries, which puts further downward pressure on the rate of lithium demand growth.

Demand for lithium has nearly tripled in the past three years, reaching about one-million tons in 2023, but the growth rate is now expected to moderate.

“The lithium market is going through tumultuous times,” says Pedersen.

The lithium supply chain is under pressure, owing declining prices. According to Wood Mac, the higher-cost sectors of the lithium supply chain, particularly the large lepidolite operations in China and direct-shipping-ore supplies for processing and refining, are feeling the pinch. However, these sectors are considered marginal producers.

Looking beyond supply price analysis, various factors come into play. Single-asset companies cannot halt production without jeopardising their cash flow, leading them to explore alternatives such as high-grading or reducing spending. In contrast, lithium majors with multiple assets can curtail production to restore market balance and maximise long-term asset value. Political pressure may also influence the decision to keep unprofitable assets operational. 

Pedersen says Wood Mac is predicting that delays and slow project development will be announced as companies seek to preserve cash.

On the other hand, merger and acquisition (M&A) activity may increase as lithium majors look for growth opportunities and mining majors consider entering the lithium space.

According to Wood Mac’s analysis, several new resource projects and conversion projects are set to start in 2024. Each project will face unique commissioning challenges, regardless of the company’s experience. Mining companies will face challenges related to the orebody and concentration of the ore, while brine projects will have to contend with the variability of the resource. Refining projects, on the other hand, will need to deal with the precision chemistry required to produce products and quality that meets the supply chain’s needs for rechargeable batteries. 

Edited by Creamer Media Reporter

Comments

Showroom

Weir Minerals Africa and Middle East
Weir Minerals Africa and Middle East

Weir Minerals Europe, Middle East and Africa is a global supplier of excellent minerals solutions, including pumps, valves, hydrocyclones,...

VISIT SHOWROOM 
Booyco Electronics
Booyco Electronics

Booyco Electronics, South African pioneer of Proximity Detection Systems, offers safety solutions for underground and surface mining, quarrying,...

VISIT SHOWROOM 

Latest Multimedia

sponsored by

Option 1 (equivalent of R125 a month):

Receive a weekly copy of Creamer Media's Engineering News & Mining Weekly magazine
(print copy for those in South Africa and e-magazine for those outside of South Africa)
Receive daily email newsletters
Access to full search results
Access archive of magazine back copies
Access to Projects in Progress
Access to ONE Research Report of your choice in PDF format

Option 2 (equivalent of R375 a month):

All benefits from Option 1
PLUS
Access to Creamer Media's Research Channel Africa for ALL Research Reports, in PDF format, on various industrial and mining sectors including Electricity; Water; Energy Transition; Hydrogen; Roads, Rail and Ports; Coal; Gold; Platinum; Battery Metals; etc.

Already a subscriber?

Forgotten your password?

MAGAZINE & ONLINE

SUBSCRIBE

RESEARCH CHANNEL AFRICA

SUBSCRIBE

CORPORATE PACKAGES

CLICK FOR A QUOTATION







sq:0.213 0.247s - 92pq - 2rq
1:
1: United States
Subscribe Now
2: United States
2: