• Benchmark gives four reasons why Goldman Sachs is wrong on lithium oversupply claims
  • Chinese lithium — Goldman’s most significant source of new supply — is low quality and expensive
  • Lithium contract pricing continues to rise

Our High Voltage column wraps all the news driving ASX stocks with exposure to lithium, cobalt, graphite, nickel, rare earths, manganese, magnesium, and vanadium.

 

A few weeks back Goldman Sachs, and then Credit Suisse – both well respected investment banks – released reports forecasting imminent oversupply in the lithium space.

“… a prolonged phase of surplus starting this year” would cause lithium prices to plunge, they said, to around $US16,000/t LCE from $US70,000/t currently.

Lithium stocks were hammered.

In the ensuing weeks, however, industry experts and fellow investment banks have come out to counter these claims.

Among them is Benchmark Mineral Intelligence, the OG when it comes to battery metals and battery supply chain analysis.

They give four reasons why Goldman Sachs is wrong, and why the lithium market will remain in structural shortage until 2025.

1. Chinese lithium is crap and expensive.

Goldman sees the most “significant” new lithium supply as coming from China.

But Benchmark says known domestic Chinese spodumene and other hard rock resources are low quality – a key reason why Chinese convertors have increasingly relied on Aussie production instead.

China’s deposits of lepidolite, for example, which Goldman expects to add significant new lithium supply volumes in the coming years, have “a high waste-to-ore ratio of 20:1, subsequent high waste-disposal costs, and high processing costs, all of which make it a marginal source of lithium”.

“Associated opex and ramp up times are also commonly underestimated,” Benchmark says.

Chinese brine resources are also low quality “and have always struggled to produce meaningful volumes of lithium into the market, let alone of battery-grade quality”, Benchmark says.

“Production of lithium from China’s Qinghai province has struggled to ramp up production despite over a decade of efforts, including by electric car maker BYD,” it says.

 

2. Capacity does not equal supply.

Just because a company says a project will produce 15,000 tonnes of LCE a year, doesn’t mean that it will.

Even outside of China, planning does not always equal reality, with recent efforts to build lithium processing facilities suffering from rising costs and delays, Benchmark says.

Tianqi Lithium’s Kwinana lithium hydroxide refinery in WA was announced in late 2016 and set to start at the end of 2018.

Instead, first production occurred in the second quarter of this year, with full production targeted for 2025.

“Building upstream of the EV battery supply chain takes time and rarely goes to plan,” says Simon Moores, chief executive of Benchmark.

“For Tianqi it’s been the best part of a decade.”

 

3. The next crop of lithium deposits will be more expensive to develop.

As demand for lithium grows, deposits with unconventional mineralogy, lower grades, and higher strip ratios will be developed, Benchmark says.

“In the last two years, higher inflation, supply chain bottlenecks and cost-blowouts have pushed incentive prices higher,” Benchmark says.

“Some new lithium supply also relies on new technologies which will add higher costs.

“As a result, it’s unlikely that lithium prices will drop back down to previous lows.”

 

4. Contract prices will rise, as spot prices fall.

While red hot Chinese spot prices get all the headlines, a large portion of the market is under long term fixed price contracts, and an equally significant portion is under contract with variable prices.

These prices have generally lagged spot and are still rising.

Combined with existing contracting arrangements set in 2022, prices are very unlikely to crash in 2023 and 2024, according to Benchmark’s Lithium Forecast.

“Benchmark’s view is that contract prices are likely to continue to rise as a lagged effect of the major step-change in spot pricing over late 2021 and 2022 while spot prices will fall, with the two prices coming into more of an equilibrium than they are now,” it says.

 

Battery Metals Winners and Losers

Here’s how a basket of ASX stocks with exposure to lithium, cobalt, graphite, nickel, rare earths, magnesium, manganese, and vanadium is performing>>>

Battery metals stocks missing from our list? Shoot a mail to [email protected]. Be nice, he’s fragile.

CODE COMPANY 1 WEEK RETURN % 1 MONTH RETURN % 6 MONTH RETURN % 1 YEAR RETURN % PRICE MARKET CAP
SGQ St George Min Ltd 8% 0% -40% -55% 0.039 $29,935,381.12
ENV Enova Mining Limited 6% 0% -23% -23% 0.017 $5,875,440.99
LKE Lake Resources 5% 6% 67% 451% 1.4875 $1,885,050,941.20
FRB Firebird Metals 4% 25% -13% -47% 0.35 $18,370,732.80
VIA Viagold Rare Earth 0% 0% 0% 2339% 2 $166,624,808.00
HNR Hannans Ltd 0% -16% -40% 166% 0.021 $54,731,701.00
CZN Corazon Ltd 0% -11% -16% -23% 0.025 $15,868,594.48
AVZ AVZ Minerals Ltd 0% 0% 12% 388% 0.78 $2,752,409,203.44
CLA Celsius Resource Ltd 0% -5% -10% -50% 0.019 $23,207,849.59
TKL Traka Resources 0% -11% -33% -53% 0.008 $5,510,196.49
ATM Aneka Tambang 0% 0% 19% 25% 1.25 $1,629,561.25
LML Lincoln Minerals 0% 0% 0% 0% 0.008 $4,599,869.49
WKT Walkabout Resources 0% -7% 13% 13% 0.215 $97,239,149.08
TSC Twenty Seven Co. Ltd 0% -25% -33% -25% 0.003 $7,982,441.72
CMO Cosmometalslimited 0% -4% 0% 0% 0.135 $3,316,300.00
CML Chase Mining Limited 0% 17% -7% -18% 0.014 $6,553,858.65
RR1 Reach Resources Ltd 0% -33% -50% -64% 0.004 $7,640,202.56
PNT Panthermetalsltd 0% -14% -5% 0% 0.19 $5,510,000.00
CLZ Classic Min Ltd 0% 0% 0% 0% 0.001 $31,024,646.55
CXO Core Lithium 0% 4% 127% 367% 1.19 $2,156,779,639.38
AZI Altamin Limited -1% -4% 44% 17% 0.095 $37,213,091.44
IG6 Internationalgraphit -1% 10% 0% 0% 0.34 $28,520,837.80
PSC Prospect Res Ltd -2% 0% 41% 428% 0.95 $425,611,592.50
RAG Ragnar Metals Ltd -2% 16% 23% 43% 0.043 $17,063,320.01
BRB Breaker Res NL -2% -9% -34% 17% 0.205 $71,685,004.38
QEM QEM Limited -2% 3% 14% 14% 0.2 $24,326,032.40
ADD Adavale Resource Ltd -3% -12% -22% -69% 0.029 $11,704,791.35
STM Sunstone Metals Ltd -4% -18% -53% 161% 0.047 $131,296,767.32
JMS Jupiter Mines. -5% -5% -5% -34% 0.205 $430,978,027.26
OMH OM Holdings Limited -5% -6% -8% -9% 0.79 $601,978,019.66
LNR Lanthanein Resources -5% -27% -5% 31% 0.019 $15,080,860.26
SRI Sipa Resources Ltd -5% -5% -8% -33% 0.037 $7,995,967.32
NVA Nova Minerals Ltd -6% -6% -50% -62% 0.595 $101,814,291.03
BHP BHP Group Limited -6% 7% 19% 0% 43.63 $233,980,577,841.80
CWX Carawine Resources -7% -7% -24% -44% 0.14 $19,296,808.58
HXG Hexagon Energy -7% -11% -67% -70% 0.025 $13,848,729.33
TON Triton Min Ltd -8% -4% -29% -33% 0.024 $33,987,172.78
RFR Rafaella Resources -8% -16% -40% -62% 0.036 $8,620,719.36
FG1 Flynngold -8% -11% -35% 0% 0.12 $8,327,936.50
EMT Emetals Limited -8% 0% -33% -54% 0.012 $11,050,000.00
MIN Mineral Resources. -8% 1% 12% 11% 54.67 $10,748,523,978.27
S2R S2 Resources -8% 10% -15% 18% 0.165 $64,147,473.90
FTL Firetail Resources -8% 5% 0% 0% 0.33 $21,314,962.50
MOH Moho Resources -9% -26% -46% -57% 0.032 $5,268,808.48
VMC Venus Metals Cor Ltd -9% -11% -9% -16% 0.16 $25,683,376.11
HAS Hastings Tech Met -9% -13% -11% 35% 0.21 $466,657,409.57
IGO IGO Limited -9% 3% 2% 43% 10.83 $8,647,998,424.46
BOA Boadicea Resources -9% -3% -23% -47% 0.155 $12,431,983.20
OZL OZ Minerals -9% 2% -20% -14% 22 $7,936,804,874.69
BUX Buxton Resources Ltd -9% -7% -5% -26% 0.081 $11,812,156.61
VR8 Vanadium Resources -9% -20% 27% 57% 0.08 $41,195,576.54
DTM Dart Mining NL -9% -9% -27% -57% 0.06 $8,791,910.40
PNN PepinNini Minerals -10% -29% -11% 28% 0.41 $28,291,608.16
ADV Ardiden Ltd -10% -25% -18% -10% 0.009 $24,015,018.20
PUR Pursuit Minerals -10% -10% -36% -77% 0.018 $17,965,434.69
IMI Infinitymining -10% -16% 0% 0% 0.135 $8,912,500.00
ILU Iluka Resources -10% -2% -3% 23% 9.6 $4,437,513,235.62
LPD Lepidico Ltd -10% 0% -38% 86% 0.026 $182,200,802.92
MLX Metals X Limited -11% -18% -20% 58% 0.41 $394,660,739.15
INF Infinity Lithium -11% -14% -29% 29% 0.12 $58,101,829.24
IPT Impact Minerals -11% -24% -39% -48% 0.008 $19,850,964.45
MMC Mitremining -11% -17% -40% 0% 0.12 $3,521,063.00
AQD Ausquest Limited -11% 20% 41% 4% 0.024 $19,803,581.35
EFE Eastern Resources -11% -31% -61% 100% 0.024 $26,849,789.04
AVW Avira Resources Ltd -11% -20% -20% -20% 0.004 $8,475,160.00
AKN Auking Mining Ltd -11% -24% -37% -78% 0.087 $8,340,714.99
S32 South32 Limited -11% 1% 17% 52% 4.47 $22,253,056,464.00
LYC Lynas Rare Earths -11% -4% -8% 45% 8.29 $7,733,667,017.78
SCN Scorpion Minerals -11% -10% 7% 26% 0.078 $26,214,664.17
ESR Estrella Res Ltd -12% 10% -8% -60% 0.023 $27,615,675.42
EGR Ecograf Limited -12% -17% -50% -50% 0.335 $177,881,716.31
AZS Azure Minerals -12% 8% -28% -4% 0.26 $90,113,359.09
G88 Golden Mile Res Ltd -12% -17% -14% -26% 0.043 $10,186,630.70
PLS Pilbara Min Ltd -13% -14% -21% 50% 2.125 $6,697,908,864.00
TNG TNG Limited -13% -14% -21% -8% 0.061 $88,858,766.21
MAN Mandrake Res Ltd -13% -26% -13% -82% 0.04 $22,257,963.14
CNB Carnaby Resource Ltd -13% -30% 168% 128% 0.765 $115,648,715.20
WMG Western Mines -13% -25% -3% 0% 0.165 $6,410,687.50
EMN Euromanganese -13% -30% -52% -61% 0.23 $69,193,638.99
AAJ Aruma Resources Ltd -13% -16% -3% 5% 0.065 $10,987,305.21
ZNC Zenith Minerals Ltd -14% -14% 42% 36% 0.32 $125,525,016.58
AM7 Arcadia Minerals -14% -12% -14% 0% 0.19 $7,523,387.50
AKE Allkem Limited -14% -10% 9% 48% 10.03 $6,912,213,652.24
EUR European Lithium Ltd -14% -24% -52% -3% 0.06 $92,655,213.61
ENT Enterprise Metals -14% -14% -24% -47% 0.012 $8,380,409.12
KOB Kobaresourceslimited -14% -23% 0% 0% 0.15 $11,700,000.00
PEK Peak Rare Earths Ltd -14% -29% -53% -70% 0.385 $88,123,128.23
GL1 Globallith -15% -17% 124% 408% 1.32 $224,558,032.24
AVL Aust Vanadium Ltd -15% -38% 21% 59% 0.035 $141,433,455.89
STK Strickland Metals -15% -23% -12% 41% 0.058 $85,834,682.69
CTM Centaurus Metals Ltd -15% -8% -8% 38% 0.98 $457,003,712.11
COB Cobalt Blue Ltd -15% -18% 68% 82% 0.655 $228,047,680.36
BKT Black Rock Mining -15% -17% -28% 0% 0.17 $180,792,294.51
AOU Auroch Minerals Ltd -15% -18% -30% -59% 0.073 $31,772,854.71
GME GME Resources Ltd -15% -8% 104% 81% 0.11 $71,278,891.44
THR Thor Mining PLC -15% -8% -21% -45% 0.011 $12,807,611.68
GED Golden Deeps -16% -4% 13% 13% 0.0135 $16,173,174.00
CMX Chemxmaterials -16% -30% 0% 0% 0.16 $8,804,742.69
GLN Galan Lithium Ltd -16% -20% -35% 38% 1.1 $363,757,237.59
AML Aeon Metals Ltd. -16% -32% -33% -70% 0.026 $26,760,545.72
LTR Liontown Resources -16% -15% -36% 70% 1.035 $2,444,331,095.77
MNS Magnis Energy Tech -16% -23% -32% 9% 0.31 $333,437,438.51
PGM Platina Resources -16% -14% -38% -56% 0.031 $15,203,381.97
MNS Magnis Energy Tech -16% -23% -32% 9% 0.31 $333,437,438.51
NTU Northern Min Ltd -16% -10% -29% 0% 0.036 $189,530,495.66
TMB Tambourahmetals -16% -14% -22% 0% 0.18 $7,414,667.64
PLL Piedmont Lithium Inc -16% 0% -17% -26% 0.69 $390,402,392.00
NIC Nickel Industries -16% -8% -22% -3% 1.0575 $3,181,933,624.01
LIT Lithium Australia -17% -19% -39% -39% 0.07 $83,867,826.95
CHR Charger Metals -17% -29% -5% 0% 0.4 $14,824,370.93
KAI Kairos Minerals Ltd -17% -26% -20% -44% 0.02 $43,166,056.80
SRL Sunrise -17% -1% 51% 34% 2.7 $252,162,061.20
NMT Neometals Ltd -17% -29% -8% 96% 0.995 $581,278,979.76
AX8 Accelerate Resources -17% -26% -22% -29% 0.029 $8,694,143.67
RXL Rox Resources -17% -21% -28% -41% 0.265 $49,837,579.37
ASO Aston Minerals Ltd -17% -17% -10% -43% 0.1075 $136,820,677.25
PGD Peregrine Gold -17% -14% 4% 6% 0.38 $16,846,134.36
TEM Tempest Minerals -18% -39% 65% 111% 0.0395 $22,714,477.92
FGR First Graphene Ltd -18% 0% -49% -52% 0.115 $75,604,559.76
KOR Korab Resources -18% -28% -62% 77% 0.023 $8,442,150.00
AXE Archer Materials -18% -11% -46% -16% 0.62 $180,138,725.08
AZL Arizona Lithium Ltd -18% -27% 3% 231% 0.1025 $245,599,113.32
MRC Mineral Commodities -18% -18% -18% -61% 0.086 $51,359,100.86
GW1 Greenwing Resources -18% -26% -43% -10% 0.225 $31,428,074.00
CRR Critical Resources -18% -26% 29% 74% 0.054 $80,337,305.68
LOT Lotus Resources Ltd -18% -14% -26% 19% 0.2325 $249,604,330.31
PAN Panoramic Resources -19% -8% -6% 38% 0.22 $522,983,071.02
TLG Talga Group Ltd -19% -16% -32% -27% 1.095 $385,792,766.54
IPX Iperionx Limited -19% -26% -33% -41% 0.635 $106,619,253.16
GT1 Greentechnology -19% -6% 106% 0% 0.74 $113,753,720.00
JRV Jervois Global Ltd -19% -23% 11% 4% 0.6 $1,010,634,389.07
E25 Element 25 Ltd -19% -17% -50% -77% 0.53 $87,808,462.18
VML Vital Metals Limited -19% -14% -18% -22% 0.042 $191,842,221.86
GSR Greenstone Resources -19% 31% 59% 119% 0.046 $52,272,638.14
KGD Kula Gold Limited -19% -31% -42% -39% 0.025 $6,455,268.96
GAL Galileo Mining Ltd -19% 137% 495% 383% 1.28 $256,589,853.10
MCR Mincor Resources NL -20% -8% 53% 91% 1.93 $1,017,170,903.70
IXR Ionic Rare Earths -20% -27% -11% 54% 0.04 $166,522,011.56
QPM Queensland Pacific -20% -17% -31% -27% 0.12 $195,451,641.38
EMH European Metals Hldg -20% -24% -44% -55% 0.76 $118,956,535.43
RGL Riversgold -20% -20% 77% -20% 0.032 $25,716,783.97
LPI Lithium Pwr Int Ltd -20% -35% -19% 74% 0.375 $150,132,284.64
REE Rarex Limited -20% -20% -41% -33% 0.059 $37,138,484.86
LMG Latrobe Magnesium -21% -22% -49% 170% 0.054 $99,428,876.16
NC1 Nicoresourceslimited -21% -6% 0% 0% 0.88 $87,250,002.00
CZL Cons Zinc Ltd -21% -5% -32% -53% 0.019 $7,993,871.89
DEV Devex Resources Ltd -21% -32% -54% -43% 0.265 $103,680,709.77
WCN White Cliff Min Ltd -21% -32% -6% -6% 0.015 $11,764,860.52
ESS Essential Metals Ltd -21% -25% 116% 243% 0.3775 $105,973,386.48
NWC New World Resources -21% -23% -51% -65% 0.033 $63,876,112.88
MRD Mount Ridley Mines -21% -21% -31% -8% 0.0055 $29,285,142.20
POS Poseidon Nick Ltd -22% -22% -42% -36% 0.051 $174,645,692.98
FRS Forrestaniaresources -22% -46% -52% 0% 0.145 $4,495,808.64
ARL Ardea Resources Ltd -22% -10% 88% 77% 0.94 $173,132,527.44
LEG Legend Mining -22% -24% -5% -57% 0.054 $162,553,007.54
BNR Bulletin Res Ltd -22% -24% 64% 83% 0.125 $39,162,298.50
GRE Greentechmetals -22% -31% 0% 0% 0.125 $4,691,999.85
ARN Aldoro Resources -22% -30% -60% -52% 0.16 $17,362,378.08
CAI Calidus Resources -22% -24% 8% 25% 0.6475 $276,071,205.73
PVW PVW Res Ltd -22% -23% -45% 77% 0.23 $24,650,796.88
SYA Sayona Mining Ltd -22% -45% 2% 101% 0.1325 $1,153,947,221.84
SHH Shree Minerals Ltd -22% -30% -22% -50% 0.007 $9,777,895.14
BEM Blackearth Minerals -23% -26% -40% -35% 0.072 $22,979,428.87
NKL Nickelxltd -23% -25% 9% -29% 0.12 $8,694,000.00
RNU Renascor Res Ltd -23% -26% 42% 105% 0.17 $376,887,442.93
AGY Argosy Minerals Ltd -23% -5% 28% 229% 0.345 $522,051,750.99
WML Woomera Mining Ltd -23% 0% 20% -14% 0.018 $13,736,661.32
SYR Syrah Resources -24% -28% -3% 13% 1.2125 $910,442,220.24
VUL Vulcan Energy -24% -20% -53% -36% 5.66 $846,477,928.70
TMT Technology Metals -24% -11% 5% -9% 0.32 $78,684,208.88
JRL Jindalee Resources -24% -21% 23% -3% 2.74 $175,005,846.30
CAE Cannindah Resources -24% -28% 6% 192% 0.19 $109,417,125.17
SLZ Sultan Resources Ltd -24% -21% -31% -57% 0.11 $10,410,548.63
WIN Widgienickellimited -24% -25% 39% 0% 0.265 $76,311,000.00
BSX Blackstone Ltd -25% -27% -67% -45% 0.2 $108,432,939.95
AR3 Austrare -25% -26% -68% 0% 0.32 $34,272,558.72
GBR Greatbould Resources -25% -26% -48% -29% 0.067 $29,109,179.94
PAM Pan Asia Metals -25% -9% -14% 179% 0.405 $34,619,562.68
RMX Red Mount Min Ltd -25% -25% -33% -50% 0.006 $9,854,183.15
RBX Resource B -25% -47% -40% 253% 0.12 $5,290,687.87
EVR Ev Resources Ltd -25% -25% -53% 4% 0.027 $28,705,506.20
LSR Lodestar Minerals -25% -40% -33% -45% 0.006 $12,169,061.44
AOA Ausmon Resorces -25% -25% 0% 0% 0.006 $6,001,025.40
RBX Resource B -25% -47% -40% 253% 0.12 $5,290,687.87
EVR Ev Resources Ltd -25% -25% -53% 4% 0.027 $28,705,506.20
RAS Ragusa Minerals Ltd -25% 15% 19% 8% 0.086 $11,057,889.04
CHN Chalice Mining Ltd -25% -21% -52% -50% 4.23 $1,832,678,895.13
NWM Norwest Minerals -25% -33% -59% -64% 0.031 $6,321,258.55
MLS Metals Australia -25% -38% 33% 33% 0.053 $29,477,232.23
VRC Volt Resources Ltd -26% -6% -35% -51% 0.017 $57,719,047.99
SRZ Stellar Resources -26% -19% -26% -47% 0.017 $16,786,052.52
FFX Firefinch Ltd -27% -71% -66% -47% 0.2425 $318,935,669.67
MRR Minrex Resources Ltd -27% -35% -7% 57% 0.0345 $40,348,620.36
LEL Lithenergy -27% -28% 5% 116% 0.8 $40,635,000.00
ODE Odessa Minerals Ltd -27% -21% 120% 175% 0.011 $7,520,115.51
ARR American Rare Earths -27% -30% 48% 175% 0.245 $108,818,857.40
CNJ Conico Ltd -27% 69% -26% 1% 0.027 $40,748,066.22
WC8 Wildcat Resources -27% -10% -40% -4% 0.027 $20,648,727.26
RLC Reedy Lagoon Corp. -27% -36% -48% -16% 0.016 $10,033,684.42
SBR Sabre Resources -27% -20% -20% -20% 0.004 $13,948,655.04
EMS Eastern Metals -27% -23% -37% 0% 0.12 $5,340,000.00
GSM Golden State Mining -27% -30% -46% -76% 0.045 $6,053,908.59
INR Ioneer Ltd -28% -26% -55% 11% 0.36 $920,171,744.80
BMM Balkanminingandmin -28% -45% -53% 0% 0.18 $7,368,750.00
AUZ Australian Mines Ltd -28% -36% -60% -67% 0.079 $40,702,781.68
1MC Morella Corporation -28% -37% -74% -74% 0.0165 $93,171,851.75
KFM Kingfisher Mining -29% 14% 39% 16% 0.25 $9,588,600.28
BYH Bryah Resources Ltd -29% -30% -39% -56% 0.032 $8,595,872.65
KTA Krakatoa Resources -29% -37% 13% -12% 0.053 $21,889,079.73
ARU Arafura Resource Ltd -29% 0% 76% 91% 0.335 $567,258,301.18
ASN Anson Resources Ltd -30% -5% -9% 57% 0.105 $118,209,918.53
LRS Latin Resources Ltd -30% -44% 114% 11% 0.062 $136,981,567.07
ALY Alchemy Resource Ltd -30% -20% 45% 9% 0.016 $17,155,333.03
LPM Lithium Plus -31% -55% 0% 0% 0.28 $14,724,006.00
MQR Marquee Resource Ltd -31% -24% -45% 15% 0.069 $25,579,775.77
AS2 Askarimetalslimited -32% -45% 29% 0% 0.265 $13,102,195.05
QXR Qx Resources Limited -33% -47% 47% 87% 0.028 $27,499,594.27
KZR Kalamazoo Resources -33% -33% -35% -47% 0.22 $40,654,424.72
WR1 Winsome Resources -34% -40% -18% 0% 0.245 $42,560,908.11
PRL Province Resources -35% -40% -64% -64% 0.052 $67,173,269.04
LRV Larvottoresources -35% -38% 38% 0% 0.2 $9,967,800.00
MTM Mtmongerresources -42% -27% -21% 0% 0.11 $5,439,004.95
A8G Australasian Metals -44% -42% -52% 21% 0.205 $10,498,475.97