Lithium demand is set for a meteoric rise based on national and international Government Policy driving its use in batteries. Firstly, to stablise the use of renewable sources of electricity in the grid. South Australia and Tesla have built a stand out project to deliver this after SA disastrous power outage last year. Secondly with their commitment to electric vehicles to reduce carbon emissions.
Meanwhile electricity and battery producers are turning themselves inside out to keep up with the expected surge in demand. World reserves were estimated at 39 million tonnes in 2011 and this was deemed to be sufficient to meet 90 years of demand. Credit Suisse has since projected that demand is 25% higher than was forecast at that time and so reserves will only last for about 67 years. This will drive prices initially and new technologies for battery development in the longer term.
Australia is currently the world’s largest exporter of lithium, however is only in third place in reserves held. Argentina has the highest reserves, followed by China, Australia and then Chile. WA dominates this market and has several notable projects .
What are we mining and where is it going?
Talison Lithium is located at Greenbushes which is 250km south of Perth, and 90km south east of Bunbury Port . It is currently undergoing a $340 million expansion in it’s mining operations. This is forecast to deliver 200 construction jobs from May 2017 and then 40 to 60 operational jobs from mid 2019.
Tianqi Lithium is one of the world’s leading suppliers of lithium and based in China. It is spending $300 million on a lithium hydroxide plant and now has the green light for a $317 million expansion at Kwinana , 38km south of Perth . Lithium can be shipped as a metal ore, or significant value added through refinement into the chemical compounds used in batteries.
This project is forecast to have 500 construction jobs in phase one, that is forecast to finish late 2018, and phase two may be similar with its finish in late 2019.
Altura Resources at Pilgangoora, one of the largest reserves in Australia, is located 120km west from Port Hedland. Its $139 million project is moving so fast it is reported as ‘in the early part of construction with hundreds of jobs from March 2018 and operational from early 2019’.
Pilbara Resources also has a project at Pilgangoora with an investment of $234 million they forecast they can produce 2million tonnes per annum (mtpa) with a workforce of about 400 at peak of construction with 120 operational jobs to follow . The value of the mine is projected at A$9.23 billion over an estimated 36-year mine life.
In addition, there is Mt Cattlin at Ravensthorpe on Highway 1 between Albany and Esperance . At full capacity they project 1mtpa. They have commitments to ship the bulk concentrate to China. Plus, the Mt Marion Lithium project about 40k south west of Kalgoorlie. It is jointly owned with one of China’s largest lithium producers. Annual production is planned at 400,000tonnes per annum .
This rapid rise in demand is driving direct and indirect employment, economic growth through Gross Regional Product, and Government income through royalties. If you have been wondering if the WA property market is ever going to turn from its downward run in the past few years, then this is likely to be the catalyst that will turn it around and quickly.
Author Rosemary Johnston, Client Experience, Forrester Cohen. www.forrestercohen.com.au If you would like more information or to continue the social commentary, please email rosemary@forrestercohen.com.au