Global competition for lithium resources and Australian lithium mining market vast
In 2021, global sales will reach 6 million vehicles, and it will also supply 56% of the world’s lithium batteries. China’s huge demand for lithium energy requires continuous import of lithium resources from overseas. Australia has 8% of the world’s lithium resources, about 90% of which are exported to China.
Lithium is the new oil in Australia
Lithium is an important raw material for power batteries, and the strategic significance of lithium energy is becoming more and more critical. However, the current distribution of global lithium resources is not uniform. According to data, as of 2021, about 56% of the world’s proven lithium metal resources of 89 million tons are located in the South American “Lithium Triangle” (composed of Bolivia, Argentina, and Chile). While the United States and Australia have 10% and 8% of lithium ore reserves respectively, China’s lithium ore reserves are only 6%.
Lithium resources are mainly supplied by salt lake brine and hard rock lithium mines. In the early stage of its development and application, it mainly revolved around the two resources of spodumene and lithium salt lake. At present, the proven reserves of water-type lithium resources account for about 64% of the total lithium reserves, mainly concentrated in South American lithium triangle countries. Hard rock lithium deposits mainly account for about 36% of global reserves, distributed in Australia, China, Brazil, the United States, Mexico, etc.
Although lithium ore resources are widely distributed in the world, they are distributed in Western Australia, North America, Sichuan, China, Africa and other places. Lithium mines that have been developed so far are mainly concentrated in Australia. Australia is the most important raw material supplier of spodumene in the world, accounting for about 85% of the global ore lithium production. The total supply of lithium resources in Australia accounts for about 60% of the world’s total.
The Greenbushes mine in Australia is currently the spodumene mine with the largest reserves and the best quality in the world, with a grade as high as 2.1%, excellent resource endowment, large scale, and low cost. At present, there are four lithium mines in operation in Australia, all of which are located in Western Australia, and several other lithium mines are under construction. In 2020, Australia’s lithium concentrate output will reach 224,000 tons of lithium carbonate equivalent, and the total output in 2021 will increase by 32.07%.
It is expected to maintain an annual growth rate of more than 20% in the future, and the output will reach 692,000 tons by 2026-2027, accounting for 46% of the expected global demand. In addition, Australia is also actively deploying the lithium processing industry. In September this year, Australia achieved a zero breakthrough in the lithium battery manufacturing industry.
Strong competition in Australian lithium mine market
The strong global demand for lithium resources and the output of Australia’s high-quality spodumene concentrate have enabled Australia to gain more market opportunities from global development. The price of spodumene has boosted Australia’s export revenue, which is expected to be about US$2.8 billion in 2021-2022, and the total lithium export revenue will reach US$6.7 billion in 2026-2027.
According to the Australian DISER report, the spot price of spodumene concentrate at the beginning of 2022 will be US$3,000 per ton, which is more than six times higher than the US$420 per ton in January 2021. The latest auction price in the recent market has reached 6,988 US dollars per ton. In view of the current global commitment to energy transformation in order to achieve the goal of carbon neutrality, high-quality lithium energy will become the real “oil”. In the future, it may face more severe and prolonged shortages, and spot prices will remain higher for a longer period of time.
It is worth noting that Australia’s lithium resources exported to China accounted for 90% of the total, which benefited from China’s lithium mine layout in the early years. Take Chinese lithium mining companies Tianqi Lithium and Ganfeng Lithium as examples. The growth point of Ganfeng Lithium Industry lies in the release of production capacity at the mine end, which improves its raw material self-sufficiency and profit margin.
Australia’s lithium ore resources are currently the highest-quality lithium resources with the largest output. Judging from its current development, its market is huge and has great potential. At present, there are several lithium resource projects under construction in Australia. It is estimated that Australia will spend 50.5 million Australian dollars in four years to establish an Australian key mineral research and development center, most of which will be used for lithium mines.
More international capital enters the Australian lithium mine market
The global demand for lithium resources, on the one hand, promotes the realization of global carbon neutrality and promotes environmental optimization. But on the other hand, it has also intensified the competition for lithium resources. Recently, Chinese lithium mining companies have suffered a sudden cold wave in overseas investment.
On November 2 local time, Innovation, Science and Economic Development Canada issued a statement on its government website. According to the statement, according to the ICA, based on the consideration of Canada’s national security and its strategic mineral supply chain in the global market, the government has ordered three Chinese companies to divest their investment in Canada’s key mineral lithium mine project. This move is undoubtedly a positive portrayal of the strategic position of lithium resources being raised again and the global competition for lithium resources.
Experts believe that the current lithium resource investment pattern is basically irrespective of nationality. As long as it is a mine, major powers and related mining companies are all competing. South America, Australia and Africa are regions with fierce competition. There are still some variables about the assets of lithium mining companies listed in Australia and Canada.
At the same time, Australia has a completely different attitude from Canada. According to previous reports by ACB News, industry professionals said that China is a new manufacturing country for electric vehicles in the world, and has a huge demand for lithium ore, which is an important material for batteries, which has driven the inflow of capital to the lithium mining industry on a global scale. This is extremely important for junior lithium explorers.
In addition, professionals also said that the Canadian government’s latest approach means that for the Australian lithium mining industry, a good time window for attracting international capital has opened, attracting more international capital to enter the Australian market.
Conclusion
The global competition for lithium energy has restricted investment in lithium energy, and the different investment thresholds of countries with lithium resources have intensified competition in this market. The cooperation between China and Australia in the field of lithium has such successful cases as Tianqi Lithium Industry. Although the new cooperation has many challenges, it is an opportunity that cannot be missed.
