Lithium is a soft, silver-white and highly reactive metal used primarily in the aluminium industry, lithium ion batteries, glass and ceramics. Lithium is the lightest metal. The supply of lithium is highly concentrated amongst four major producers operating in only a small number of jurisdictions. Lithium demand in electric vehicles will play a pivotal role in the progress of the lithium market.*
The most common lithium-bearing minerals found in economic deposits are; spodumene, lepidolite, petalite, eucryptite, amblygonite, hectorite and jadarite. Spodumene the most important ore mineral for hard rock sources of lithium.*
Lithium demand by end use 2016
Battery Lithium demand (LCE) outlook
- Batteries (45)
- Glass & Ceramics (29)
- Grease (8)
- Air Treatment (2)
- Polymers & Rubber (5)
- Metallurgical Powders (4)
- Other (7)
- Primary (2016-2025 CAGR: 5.0%)
- Rechargeable (2016-2025 CAGR: 27.7%)
Source: Roskill, company reports, UBS
Source: Roskill, Benchmark Mineral Intelligence, company reports, UBS estimates
Lithium is primarily recovered from lithium-rich “brines”++, or granitic pegmatites. The Andes Mountains of Argentina, Chile and Bolivia is host to the “lithium triangle” where naturally occurring lithium-rich brines are regularly present in high altitude settings, and the three largest producers of lithium, SQM, Albemarle and FMC Lithium operate. The area is the most significant and lowest cost source for lithium.*°°
According to UBS, Australia is a significant player in lithium production, hosting some of the world’s largest and highest-grade lithium hard rock spodumene deposits. The mineralised rock typically contains 12-20% spodumene, approximately 1.0% to 1.5% lithium oxide (Li2O).*°°
Conventional mining methods are applied when extracting lithium minerals from hard rock sources. Waste materials are removed by crushing and beneficiation. Depending on the end use for the ore whether for technical or chemical application, it goes through further processing.*°°
Lithium-rich brines are pumped from depths of 1.5 – 60 meters below the surface into a series of large ponds for solar evaporation. This process results in crystallization of other salts and lithium-rich liquor. The lithium liquor is then transferred to other production plants for further processing.*°°
Most lithium is currently used in the production of lithium ion batteries.*°° This is due to lithium being the most electronegative metal with excellent electrical conductivity.°°* Lithium is also utilised in applications involving heat transfer, such as ceramic glass, as lithium has the greatest heat capacity.*°°
Lithium containing glass and ceramic coatings (glazes) are more resistant to thermal shock as they have a low coefficient of thermal expansion. Furthermore, adding lithium to glass adds mechanical and physical properties such as lustre, hardness and resistance to chemical agents.*°° °°*
*°°Lithium & Graphite: Driving Disruption, UBS, 2017.
°°*Lithium: British Geological Survey, 2016.
++Any fluid containing a high level of dissolved solids.
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