Battery mineral miners are tapping into the pioneering spirit to take Australia and the world’s vitality sources into a brand new period.
Yet many market watchers could also be dudding themselves and curbing capital for newcomers by counting on previous methods of considering.
It’s no shock to Global Lithium managing director Ron Mitchell that minerals utilized in rechargeable batteries stole the present at this week’s Diggers and Dealers Mining Forum in Australia’s largest outback metropolis.
As chair of the London Metal Exchange lithium and cobalt committee, an necessary advocacy physique for growing a extra liquid and mature market, he is a driving drive behind the longer term commerce.
“It’s still very early days in terms of this energy transition,” Mr Mitchell advised AAP in Kalgoorlie, Western Australia.
“People often point to the spot price being the price for lithium but the amount of tonnage traded on spot market is so tiny.
“The different problem round liquidity is that a lot of the product is tied up on the off-take contracts.”
Off-take deals, or agreements to buy or sell upcoming goods, are being struck for Australia’s lithium before production even starts at new projects, as industrial giants and automakers race to lock in long-term supply.
But the international price for high-purity lithium, or spodumene, had a savage five-month decline after peaking at the end of last year.
Many analysts, with their predictions on pricing, assume very optimistic scenarios around production and quality, Mr Mitchell says.
“I do know from my expertise, even for the main incumbents, it is onerous work and it is tough.”
He says experience within the lithium trade is “fairly restricted”, which is another other factor that will impact supply.
Every ore body is different and there are geopolitical challenges, whether operating in South America, Africa, Canada or the United States.
“They’re not essentially secure jurisdiction challenges however extra across the allowing and approvals course of – it is very prolonged,” he says.
“And there is a void of expertise because it pertains to lithium processing in these jurisdictions as properly.”
Historically, 90-plus per cent of purchasing has been by North Asia – China, Japan and South Korea.
As the West joins the race, the liquidity and level of sophistication around contracting and pricing could take years to become more mature.
“There are a number of challenges however that is what makes it so thrilling,” Mr Mitchell says.
Australia’s leading lithium producer, Pilbara Minerals, took out the Digger of the Year Award at a glittering dinner in a giant marquee to close the annual mining bash that attracts thousands of delegates from around the world.
CEO Dale Henderson says Australia has become the world’s largest supplier of lithium but WA producers need to be bold.
“The vitality shift wants Australia and it is a huge alternative,” he says.
“This is an entire new period we’re getting into and I encourage that we faucet into that pioneering spirit that we’ve right here.”
The emerging company award went to Patriot Battery Minerals, which is developing the largest hard-rock lithium resource in the Americas in an ancient geological region known as the Canadian Shield or Laurentian Plateau.
“It appears like an in a single day success,” according to Brisbane-based CEO Blair Way.
But that’s not the case, as the firm started small and has built an executive team to take the project beyond the first resource estimate that makes it the world’s eighth largest.
The ASX-listed firm has also caught the eye of American chemicals giant Albemarle, which took a five per cent stake last month to secure more of the raw material used to make electric car batteries.
Global lithium supply is expected to enter a deficit relative to demand by 2025, according to BMI, a unit of data and research firm Fitch Solutions.
A BMI report released on Thursday forecast China’s lithium production to grow six per cent annually from 2023 to 2032, supported by several new projects and dominance in battery manufacturing.
But China’s manufacturers are more likely to seek foreign supply to meet future needs than rely on an acceleration in domestic production, given greater environmental scrutiny and intensive use of water needed for lithium extraction, the report says.
Competing moves in Australia, the United States and Canada to build sovereign processing and battery manufacturing suggest limited upside for China’s production, regardless of price or pressure on supply, according to BMI.
At newcomer Global Lithium, Mr Mitchell has overseen the entry of Mineral Resources as a cornerstone investor, a 10-year offtake agreement and an upgraded resource base across the young company’s Manna and Marble Bar Lithium Projects in WA.
They have the world’s 13th largest undeveloped lithium project and he says there’s more to come in sizing the resource.
He says the mines of the future are going to look very different to the mines of the past.
“In the best way we rehabilitate, the best way we give contracting alternatives to the native communities, the best way we course of our tailings”, he says.
Operations are also far more sophisticated with a lot more technology going into mines, which should also make them safer – for workers and the environment.
“An attractive factor about spodumene is that it is a non-hazardous materials,” Mr Mitchell says.
The beneficiation, which is the process to physically separate and concentrate the valuable parts of the ore, is very clean, with the flotation agent an organic palm oil.
It produces a final product that looks like beach sand.
“If you may put your hand in each a part of the manufacturing course of, you realize it is secure, and that is precisely the case for spodumene,” he says.
But he’s not as upbeat about the federal government’s critical minerals strategy, noting that “there’s not plenty of meat on these bones”.
He says infrastructure will be key, particularly public infrastructure that Australian taxpayers have already built.
“We’re not asking for money handouts,” he provides.
“We simply need to be handled pretty in terms of entry to port and rail.”
Source: www.perthnow.com.au
