Eye on Lithium: S&P questions whether LFP is still the cheaper battery chemistry
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Battery raw material prices have been rising sharply since the start of 2021, causing speculation that automotive companies could switch out their preferred battery types for cheaper options.
While LFP has traditionally been the lowest cost pack, the continuous lithium price hike – up over 700% since 2021 – and recent surge in other battery metals such as nickel, which reached $100,000 a tonne on the LME in March (and doubling its previous all-time high) has led to a surge in battery pack prices.
According to S&P Global Market Intelligence, Chinese battery metal costs in March were up 580.7% on year for LFP batteries on a dollar per kilogram basis, rising to nearly $36/kwh.
NCM batteries were up 152.6% over the same period to $73-78/kwh in February.
Lithium supply remains a big concern for the EV market and automakers are now increasingly getting involved in the upstream side of in the industry.
For instance General Motors has said it will invest in the development of Controlled Thermal Resources Hell’s Kitchen Lithium Project in California, while Stellantis, Volkswagen, and Renault have partnered with Vulcan Energy Resources (ASX:VUL) to secure material from the Zero Carbon project in Germany.
The world’s biggest luxury car marker, BMW AG, announced it will be switching to the next generation of lower cost batteries for its new electric vehicle platform from 2025, claiming it will use ‘round cells’ instead of prismatic ones which will be manufactured by BMW’s existing partners.
Sodium-ion batteries are also now considered as one of the most promising alternatives, the largest advantage being its lower production cost.
“Due to the abundance of sodium on earth, these battery packs could cost almost 3%-50% less than lithium-ion batteries,” S&P said.
“The energy density is comparable to LFP.”
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It’s been a pretty good day for ASX lithium plays with 70 finishing up in the green, 32 flatlining and only 17 ending the week in red territory.
ARN has a portfolio of gold and nickel focused advanced exploration projects in Western Australia and recently kicked off maiden drilling at its Wyemandoo critical metal pegmatite project.
The program is targeting two pegmatite loop structures that produce anomalous lithium (up to 2.06% Li2O) and rubidium (up to 1.7%) values from prior rock chip sampling.
Drilling contractors, Three Rivers Drilling, has started to drill a 200m vertical hole into the northern loop structure as part of locating a feeder to the tree-like model interpreted to feed to local dipping sills.
The RC program is revolved around defining the geological setting for the dykes and sills with five vertical and 21 inclined holes with an estimated 3,500m to 4,200m over the northern and southern loop structures.
Red Dirt Metals, formerly TNT Mines, returned ‘exceptional’ high-grade lithium results of greater than 2% Li2O contained within all assayed holes during the first diamond drilling program across the Mt Ida Lithium-Gold Project in Western Australia.
The company – one of the top 5 winners in early morning trade today – said short term tonnage growth and an accelerated pathway to production has now been confirmed with a third diamond rig having arrived at site, while an RC and AC rig is set to arrive by the end of May.
Total program meterage is planned to exceed 60,000m by September this year.
“These first diamond results have confirmed that the Sister Sam pegmatite grades and widths are continuing some 600m down plunge from the surface expression of the pegmatite, and show no signs of grade dropping off or significant variations in mineralogy across the intrusive,” RDT managing director Matthew Boyes said.
“The results demonstrate the potential to add a significant amount of lithium metal over a small vertical distance.”
RDT has an independent consulting group contracted to calculate and report the maiden resource estimate for the Sister Sam, Timoni and Sparrow pegmatites.
In addition to the lithium resource there will be a review, re-calculation and report on an updated JORC 2012 resource of the existing gold-copper mineralisation at Mt Ida.