Lithium: Producers and developers target LiOH growth in North America

Lithium-ion battery

This past week has seen a surge of announcements from lithium producers and developers in North America looking to provide both mined and refined lithium products and capitalise on the forecast strong growth in demand. After suspending operations at both the Kings Mountain facility in North Carolina, USA and the Silver Peak facility in Nevada, USA in Q3 2020, Albemarle has announced plans to invest US$30-50M to double capacity at the Nevada based facility by 2025. The expansion is expected to bring capacity at Silver Peak to roughly 10-12ktpy LCE, which will require Albemarle to use the entirety of its brine water rights. In addition to the Silver Peak expansion, Albemarle intends to conduct further investigations into the extraction and processing of lithium clay deposits near Silver Peak, assessing their potential to produce refined battery-grade lithium compounds.

In addition to brine and clay resources in North America, lithium producers and developers are looking to capture market share. Piedmont Lithium in North Carolina, USA has signed a US$12M offtake and equity agreement with Sayona Mining, which is developing the Authier project in Quebec, Canada and targeting the purchase of North American Lithium’s suspended spodumene refining facility in Val d’Or, Quebec. The offtake includes Sayona Mining providing 60ktpy spodumene concentrates to Piedmont Lithium as feedstock for the proposed lithium hydroxide facility in North Carolina, with first delivery expected by Q2 2024. Elsewhere in Canada, Frontier Lithium announced the commissioning of a ‘mini-pilot plant’ in Falconbridge, Ontario in cooperation with XPS Expert Process Solutions, a subsidiary of major metal miner/trader Glencore.

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After a brief slowdown in growth during 2020, lithium demand is expected to accelerate in 2021, exceeding 415kt LCE with battery-grade compounds forecast to account for over 70% of the total. As regional supply chains are expected to become commonplace to help encourage supply security and reduce shipping costs and the associated environmental impacts, the North American market will require significant additional supply to support its growing battery business. Whilst Albemarle’s expansion at Silver Peak is a notable increase in the short term, the capacity expansion will be quickly overwhelmed by demand growth in North America. Lithium refined production could allow greater potential for the development of clay projects, though many challenges remain for commercial-scale operations to become a significant source to the industry. It is expected that several lithium producers and developers establishing lithium clay projects in North America will be watching Albemarle’s progress.

Cooperation between Piedmont Lithium and Sayona Mining may provide some confidence for Piedmont Lithium’s longer-term lithium hydroxide refinery, though is expected to miss the proposed Tesla-Piedmont Lithium supply agreement signed in October 2020, which is contingent on spodumene concentrate supply being available by July 2023 at the latest. Piedmont Lithium launched its feasibility study for spodumene concentrate production at Kings Mountain in December 2020 which, if positive, could see construction begin in H2 2021, though any delays to the process could see the deadline for the agreement with Tesla go to the wire.

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This article was written by David Merriman. Please get in touch below if you wish to discuss further:

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