Electric vehicles are coming – but the lithium must come from somewhere
It’s a lot harder to get a lithium mine into production than to upgrade lithium battery or electric car manufacturers, says NeoLithium’s Gabriel PindarShow transcript
European cities are clamouring for electric vehicles to reduce pollution from congestion – but investment in car and battery manufacturers isn’t reaching the mining industry, says NeoLithium’s Gabriel Pindar. He doesn’t believe industry reports that the lithium market is going to be oversupplied, because the lithium has to come from somewhere, and the resources that we’ve found are the only significant ones that exist. In the first half of this interview he talks about NeoLithium’s Tres Quebradas project and its potential.
The New Economy: Tell me more about the market for lithium; where are you seeing the most demand?
Gabriel Pindar: At the moment, China is driving the demand, and is driving the production. So, the Chinese government: it’s trying to cut reliance on fossil fuels, it’s trying to cut pollution, and they have a lot more density. So they have a big incentive to do that: 50 million people living in Shanghai and Beijing, it’s a lot of people. So they do have a real incentive to get on board with electric vehicles.
The next place – if you can imagine – would be Europe! Because European cities are also very congested. In the inner part of the city they don’t want to have any more diesel engines, they don’t want to have as many petrol engines. So, they want to have as many electric vehicles as possible.
That is what is driving this. While the industry has been quite slow, the councils and the different regulating bodies have been more aggressive. And they’re proposing legislation that is actually mandating by when we will have electric vehicles.
So, there’s no way out! We are going to have electric vehicles.
The New Economy: Is the lithium supply there to meet that deadline?
Gabriel Pindar: No: I think the automotive industry has been slow to react. They’re supporting the battery manufacturers, but the battery manufacturers are too busy growing themselves. They have to increase their capacities by five times, 10 times.
Now, the mining industry is not being supported by any of the two. There are very few deals coming from battery manufacturers or car manufacturers supporting the mining industry. So, the lithium has to come from somewhere! And I have to disagree with some of the reports that are believing that the market is going to be oversupplied – I don’t think it will be oversupplied. It is a lot more difficult to get a mine into production at the right quality, at the right scale, at the right production – than to get some of the other parts working.
The New Economy: Tell me about the challenges of that production: for example, you explained about the difference between deposits in Australia versus South America; does that present different challenges?
Gabriel Pindar: It does in a way. So, rock projects produce spodumene, which is a concentrate that they sell to China, and in China they reprocess it to produce hydroxide. And the hydroxide is what you actually use to produce a battery.
From the brine projects we produce lithium carbonate, and lithium carbonate also gets sold into China – the majority. A couple of other places are starting to produce now batteries out of lithium carbonate, but the majority gets produced out of China.
And of both products you have certain degrees of quality; so you can have technical grade, or you can have battery grade. So the more pure your product, the better pricing, the more you can sell it to different customers.
If not, you’re selling a product that is not finished, and your customer has to finish it. So, it’s slightly different, the mechanics of how Australia is working with the rock projects, and how much they’re producing internally; versus selling a raw material into China. And what South America’s doing with the brines, that is selling a more finished product when they sell lithium carbonate.
The New Economy: So by the time you’re into production, where do you see your product going? Will it be into China, or will the EU have caught up?
Gabriel Pindar: Difficult to say; that will be completed doing the feasibility. Our expectation is that Europe will also ramp up production. But at the moment it looks like 80 percent of the batteries will be produced out of China.
The New Economy: Gabriel, thank you very much.
Gabriel Pindar: Thank you very much Paul.