Eye on Lithium: BNEF says rising battery costs won’t derail uptake, EV sales to quintuple by 2025
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All your ASX lithium news for Monday, June 6.
BloombergNEF’s (BNEF) latest Long-Term Electric Vehicle Outlook flags that passenger electric vehicle (EV) sales are set to grow rapidly in the next few years – from 6.6 million sold in 2021 to 21 million in 2025.
The report also highlighted that the fleet of EVs on the road hits 77 million by 2025 and 229 million by 2030, up from 16 million at the end of 2021.
But EV manufacturers are contemplating a market for battery raw materials that is very tight for the years ahead – and BNEF says the battery supply chain will require significant near-term investment to avoid a supply crunch.
“Yet, the rising cost of batteries will not derail near-term EV adoption,” the report said.
“Some of the factors that are driving high battery raw material costs – war, inflation, trade friction – are also pushing the price of gasoline and diesel to record highs, which in turn is driving more consumer interest in EVs.”
Already EV uptake has displaced 1.5 million barrels of oil demand per day, but rising sales could push this to 2.5 million barrels per day by 2025.
To get on track for a net-zero global fleet by 2050, zero-emission vehicles need to represent 61% of global new passenger vehicle sales by 2030, 93% by 2035, and the last ICE vehicle of any segment needs to be sold by 2038, BNEF says.
Colin McKerracher, head of the advanced transport team at BNEF and lead author of the report, said there are “very positive signs that the market is moving in the right direction, but more action is needed – especially when it comes to heavy trucks.”
“Action also needs to focus on emerging markets, which need financial support to help enable and accelerate the transition to electric mobility of all types,” he said.
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Only 17 stocks were in the green today, a massive 70 were in the red and 41 failed to move the needle.
Anson confirmed plans for a major increase in planned production capacity at its Paradox project in the US – with the DFS targeting Stage 1 production capacity of 10,000 tonnes per annum of battery grade lithium carbonate.
That’s a 275% increase in production capacity from the 2,674tpa from the project’s updated preliminary economic assessment last year.
The company says increase is driven by an anticipated significant JORC resource increase at the project, growing lithium demand and higher prices, along with enhanced recoveries and performance from its product.
Along with the rapid expansion in private sector investment in lithium-ion battery manufacturing facilities in the United States and increased offtake activity for sustainably produced Lithium Carbonate.
Anson also said that Bromine production capacity will be progressively added at the project, which will be aligned with the forecast demand growth for zinc- bromine batteries (for renewable energy storage) and other bromine derivative products.
Calidus’ 50 per cent owned Pirra Lithium has expanded the mapped lithium pegmatites at Spear Hill in WA, with outcropping pegmatites now established over total strike length of 4.3km.
Plus, a batch of 30 rock-chip samples yielded grades up to 2.35% lithium and 808ppm tantalum.
“This discovery of another significant pegmatite outcrop in the vicinity of the previously announced results confirms the presence of a significant lithium pegmatite system,” Calidus MD Dave Reeves said.
“These results have provided additional drill targets that demand to be tested.
“The expansion of the mineralised system at Spear Hill reinforces the substantial prospectivity across the large tenement package and rights owned by Pirra Lithium.
“As a result, the shareholders of Pirra Lithium have decided to commence a demerger process and IPO of Pirra Lithium later this year.”
The producer says continued strong market conditions have positively impacted the price the company received for lithium carbonate from the Olaroz Lithium Facility in Argentina.
“The June quarter FY22 average price received for lithium carbonate is expected to be approximately 14% above prior guidance at US$40,000/t FOB 1 on sales of approximately 3,500 tonnes,” Allkem says.
The company also said similarly, strong conditions continue in the spodumene market with realised spodumene concentrate pricing in the June quarter of approximately US$5,000/t SC6% CIF.
Shipped spodumene concentrate for the quarter is anticipated to be approximately 38,000 dry metric tonnes (dmt) at an average grade in line with customer requirements of 5.3% with a further 15,000 dmt to be shipped in early July 2022.
However, current estimated annual spodumene production for FY22 is anticipated to fall marginally short of guidance by approximately 2-4%, at between 192,000 – 196,000 dmt, due to production delays resulting from the highly competitive Western Australian resources labour market and COVID-19 related requirements due to the delayed re-opening of the Western Australian border – but that “strategies have been implemented to mitigate these temporary impacts on production.”
The company also addressed the recent move by Argentina’s Customs Agency to set a reference price for lithium carbonate of US$53,000/t, which is used when reviewing export sales of lithium chemicals to prevent under-invoicing and improve pricing transparency.
“This price is not used for calculation of taxes, royalties or duties and Allkem does not expect it will have any material impact on product exports, realised prices or profitability,” the company said.
The company has expanded its portfolio with the grant of the Jingellic lithium project exploration licence in NSW.
KZR says the project contains geology that is highly prospective for both pegmatite-hosted lithium-caesium-tantalum (LCT) mineralisation as well as hardrock tin mineralisation.
“The grant of the Jingellic Lithium Project is our first initiative into New South Wales, and we are thrilled to be able to take advantage of our first mover status in targeting lithium in the highly prospective southern Lachlan Fold Belt,” chairman and CEO Luke Reinehr said.
“Our recent lithium exploration activities in the Marble Bar area in JV with SQM, and at our 100% owned projects, has encouraged Kalamazoo to investigate new lithium projects and identifying such tenure close to our existing gold projects in Victoria is a real bonus.”
The company is planning an initial “low impact” exploration program involving a project-wide soil sampling program, in addition to detailed geological mapping and rock chip sampling.
Liontown and Tesla have formalised their definitive full-form offtake agreement for the supply of spodumene concentrate from the Kathleen Valley Lithium Project in WA.
The agreement expands the detail on the material terms agreed in the binding terms sheet announced in February and specifies the operational and logistical requirements for the delivery of product.
The pricing will be determined using a formula-based mechanism referencing market prices for battery-grade Lithium Hydroxide Monohydrate.
Supply is expected to commence in 2024 with the agreement conditional on Liontown commencing commercial production at the project by no later than 1 December 2025.
At Stockhead we tell it like it is. While Anson is a Stockhead advertiser, it did not sponsor this article.