$17.3 billion — that’s how much we need to invest in new lithium chemical projects by 2025 at least if the industry is to have any realistic hope of matching supply with demand, says US lithium expert Joe Lowry.

“There will not be any significant lithium chemical oversupply anytime soon,” Lowry says.

“The reality is increasing production quickly is not so easy. While there have been many optimistic supply forecasts, recent results speak for themselves.”

African lithium play Prospect Resources (ASX:PSC) is hoping that offtake partner and major shareholder Sinomine Resource Group follows through on plans to build a 15,000tpa battery grade lithium hydroxide plant.

Prospect says Sinomine broke ground on the project in China earlier this month. Sinomine wants the Phase 1 expansion plan completed by August 2020, which is about the time – all going perfectly — that Arcadia will be in the commissioning phase.

But there’s also a bunch of miners and explorers ready to take the trip downstream into chemical production themselves.

The Australian market understands the spodumene concentrate export model, but right now that model is suffering from lower prices.

So it makes sense for WA producers, like Pilbara Minerals (ASX:PLS), Kidman Resources (ASX:KID), and Alliance Minerals Assets (ASX:A40) to move into value-adding chemical production.

In the US, explorer Piedmont Lithium (ASX:PLL) is planning an integrated lithium hydroxide business at its namesake project in North Carolina, while ioneer (ASX:INR) is advancing the Rhyolite Ridge carbonate project in Nevada.

In Europe, Infinity Lithium (ASX:INF) and European Metals (ASX:EMH) are developing integrated lithium hydroxide operations in Spain and the Czech Republic, respectively.

The list goes on.

“Almost every lithium project that has ever started with optimism has taken three or four years longer to reach full capacity and that’s what we’re seeing,” Lowry says.

“That means there’s a lot of juniors or smaller companies around the world that need to get financed and need to get moving.”

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