Where are investors placing their bets?
January 27, 2023Analysts’ chatter on lithium supply this year is divided.
Will lithium supply be sufficient to meet 2023 demand—who really knows?!
But look to Albermarle for a taste of the future and the pixilation sharpens.
The key lithium industry player this month called for an extended period of elevated lithium pricing to incentivise new production essential in the medium and long term.
You can argue this move was not just for its own benefit, but of necessity to bring in other producers to help fill an impending supply gap.
Showing where they see the future, other key industry stakeholders also demonstrated this month where they choose to commit their funds.
Chile’s SQM and China’s Tianqi each took major stakes in lithium projects in Western Australia.
In North America, government took practical action to fund new domestic lithium production, with US firm Pioneer securing a $700 m loan to finance production in Nevada.
In Canada, authorities gave the green light to Allkem’s Galaxy open pit spodumene project in the highly prospective region of James Bay in Quebec.
And on the end user side, Europe’s massive auto industry bared its salivating jaws eyeing secure supplies.
For instance, BMW just struck an offtake deal with European Lithium in Austria, to operate from 2026.
Lithium resources close to the European market are more scarce, but a pattern of projects and agreements is emerging fast.
Chinese battery producer CATL won the bid to develop major lithium reserves in Bolivia, but other Latin American state actions have proved difficult for developers, as evidenced by ongoing wrangles over projects in Mexico and Argentina.
One can only conclude the rush of investment towards Australia, Canada and Europe suggests that these jurisdictions, supported by access to high demand growth markets nearby, are proving popular for many investors and stakeholders looking to be part of the future for secure regional lithium supplies.
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