High Voltage: Lithium-ion battery supply needs to increase by 400pc (at least) by 2030, WoodMac says
Our High Voltage column wraps all the news driving ASX stocks with exposure to lithium, cobalt, graphite, nickel, rare earths, manganese, magnesium, and vanadium.
Raw material shortages and a thriving electric vehicle sector means battery supply will not meet demand until 2023, under Wood Mackenzie’s base case (most likely) scenario.
The electric vehicle (EV) market accounts for almost 80% of lithium-ion battery demand, Wood Mackenzie consultant Jiayue Zheng says.
“The lithium-ion battery market already encountered shortages last year due to thriving EV market demand and rising raw material prices,” Zheng says.
“Under our base case scenario, we project that battery supply will not meet demand until 2023.”
Global battery manufacturers are responding with massive expansion plans, taking total capacity to more than 5,500 GWh by 2030 across 300 manufacturing facilities.
That’s a five-fold increase on 2021 levels, WoodMac says, with Europe making the biggest gains and eating into China’s market share.
“The Asia Pacific region, led by China, accounted for 90% of the world’s battery manufacturing in 2021,” Zheng says.
“By the end of decade, the region is expected to reduce its share to 69%.
“While North America’s cell capacity could expand 10-fold by 2030, it still lags Europe which is on track to overtake North America in 2022 and will account for over 20% of global capacity by 2030 through more rapid expansion.”
The top 15 manufacturers by planned capacity put into operation a total of about 200 GWh in 2021, and the cumulative capacity reached 600 GWh.
Meanwhile, 3,000 GWh of capacity is at the planning or construction stage. WoodMac expects many more new plant announcements in 2022.
Important to note that for years, battery metals miners and analysts have adjusted their demand projections regularly to the upside.
This was big call from Benchmark Mineral Intelligence boss Simon Moores at the time, being October last year.
And yet prices in China were up around $US70,000/t mid March 2022, with no downside in sight.
Another trend to watch is the growing prominence of lithium iron phosphate (LFP) batteries as nickel-cobalt-manganese (NCM) batteries lose market share, WoodMac says.
“Historically, the EV and energy storage system markets have mostly deployed NCM batteries given their availability and maturity,” Zheng says.
“In 2021, NCM still accounted for half of the market share.
“However, LFP batteries began tapping into the market with competitive cost, long lifecycle, and high safety performance, making them an attractive option for both power and energy applications.
“Wood Mackenzie projects that LFP’s market share will surpass NCM in 2028.”
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One of three government grant beneficiaries, this time $49m to support development of AVL’s vanadium project in WA.
Vanadium is used in critical aerospace and chemical applications, is a key component in high strength and specialty steel products and has an important and growing use in vanadium redox flow batteries (VRFB).
The Australian Vanadium project is one of the most advanced vanadium projects being developed globally.
It would cost ~$US399m ($541m) to build and expects to produce 24.3 million pounds (11,022 tonnes) of V2O5 per annum at a low all-in cost of $US5.04/lb, over an initial mine life of 25 years.
A bankable feasibility study – the most advanced of all studies prior to making a final investment decision – is well underway.
AVL also has a battery subsidiary called VSUN Energy, which is focused on developing the market for VRFBs for energy storage.
“Our project will create hundreds of jobs in Australia and help to build the critical vanadium industry both locally and internationally,” AVL MD Vince Algar says.
“We have developed an innovative and collaborative approach to building a fully integrated project, from mine through to processing and end use in the steel and battery markets.
“We look forward to working with our partners to bring the Australian Vanadium Project into production and further develop downstream opportunities for green steel and the vanadium redox flow battery market.”
The tiddler keeps hitting thick, shallow dipping spodumene (lithium ore) bearing pegmatites at the Salinas project in Brazil.
All six diamond holes drilled to date have hit a series of stacked spod peggies along a 600m stretch, LRS says.
Check out these large green spod crystals:
Logging has confirmed that the individual pegmatites range in true thickness to a maximum of 21.1m, with a cumulative intersection of over 36m in one hole.
“The growing thickness along with the rich spodumene pegmatites is further indication that Latin may have a very compelling lithium project on its books,” LRS MD Chris Gale says.
“We look forward to receiving the assay results from these spodumene pegmatites in the next few weeks.
“The company’s market cap is approximately $60m, and much lower than our lithium peers, which we expect offers strong potential for re-rating as positive assay results confirm the strength of the Salinas project.”
ARL’s ‘Kalgoorlie Nickel Project’ (KNP) has received Major Project Status from the Aussie Government, which helps streamline the approvals process and provides access to additional sources of potential project funding.
The KNP hosts 5.9Mt of contained nickel and 380kt of contained cobalt, making it the largest nickel-cobalt resource in the developed world.
That’s enough to power 147m electric vehicles, ARL says.
The $1.165 billion project would mine cobalt-nickel laterite ore which will undergo a process to produce Mixed Hydroxide Precipitate for the growing international battery market.
A DFS – a detailed look at the economics of building a project — is underway.