CATL (Contemporary Amperex Technology), the global leader in EV batteries with a commanding 38% market share, has just achieved a major milestone. They successfully flew a 4T plane using their cutting-edge, ultra-high density “condensed batteries”. They are now setting their sights even higher, aiming to have an 8T electric plane with a range of 2,000 to 3,000 km (1,240-1,865 miles) ready for takeoff within 2027-2028.

CATL’s Condensed Battery to Fly Futuristic Electric Planes

The debut of the “Condensed Battery” at the Shanghai Auto Show last year’s April signaled that CATL has something huge in its plan. Dr. Robin Zeng, chairman and CEO of CATL, at the 15th World Economic Forum Annual Meeting, held in China’s Dalian city said,

“Players in the battery industry should compete on technology advancement, safety, reliability, delivering value that will accelerate the energy transition and secure our green future.”

Following this, he confirmed that electric aircraft of the future will utilize the high-density condensed battery. He noted the battery’s capability for long-range flights, making it suitable for private and business jets. The batteries will have an energy density of up to 500 Wh/kg in a single cell. This is 2x of average EV. Furthermore, the battery giant has collaborated Commercial Aircraft Corporation of China (COMAC) to advance toward electrification of the aviation industry.

READ MORE: A $542M Raise Revolutionizes Lithium EV Battery Production 

The Dominance of CATL in the EV Battery Game

Meanwhile, according to SNE Research, CATL maintains its dominance in the EV battery market. It says,

The total global EV battery consumption volume in 2023 reached 705.5 GWh, with a year-on-year growth of 38.6%. 

From Ford to Tesla, BMW, Mercedes-Benz, etc. nearly every major car manufacturer relies on CATL’s innovative batteries. CATL is boosting growth by adding two more overseas plants. This expands their planned facilities in Germany, Thailand, Hungary, Indonesia, and two in the US with Ford and Tesla.

Dr. Zeng says, “Safety is a top priority for CATL.”

Well, one of the reasons behind CATL’s market dominance is its rigorous safety standards. He emphasized the goal of improving the cell defect rate to one in a billion (PPB), which is to surpass the Six Sigma standard of one in a million (PPM).

Speaking at the “Not Losing Momentum on the Energy Transition” session on June 25, Dr. Zeng stressed that competition should span a product’s entire life cycle, not just focus on price cuts. He explained that comparing similarly priced products with different life cycle performances shows CATL’s batteries offer better value. Their lower cost/cycle and superior performance make them stand out.

Dr. Zeng further added that competing for long-term value is the key to the battery industry’s sustainable energy transition.”

From CATL’S news releases we discovered that, in 2023, CATL invested about 18.4B yuan (~ 2.59B U.S. dollars) in R&D. It led to breakthroughs like TENER, the world’s first mass-producible energy storage system with zero degradation in the first 5 years, and Shenxing PLUS, the world’s first LFP battery achieving a range over 1,000 km with 4C superfast charging.

Prioritizing Safety, Sustainability, and Recycling of Condensed Batteries

CATL manufactures battery materials including lithium salts, precursors, and cathode materials. It also recycles metals such as nickel, cobalt, manganese, lithium, phosphorus, and iron from waste batteries. These materials undergo processing and purification and are then used for battery production. Additionally, the company invests in and operates lithium, nickel, cobalt, and phosphorus resources to secure key materials for battery manufacturing.

Professor Ni Jun, Chief Manufacturing Officer of CATL, emphasized the critical importance of designing batteries with recyclability in mind. He noted,

“CATL has adopted a zero-carbon strategy to prioritize using reusable and renewable materials and facilitate recycling. In 2023, CATL recycled 100,000 tons of used batteries to produce 13,000 tons of lithium carbonate.”

Additionally, Zeng also unveiled plans for next-gen sodium-ion batteries, which promise lower costs, longer life, and better cold performance. These are expected to launch in the next year. He firmly believes in his vision of sustainable aviation and thus expressed himself by saying, 

“This technology is a game-changer for reducing fossil fuel use. Airplanes are significant polluters, and as battery tech improves, so will their ranges. I look forward to a future of travel powered by renewable energy.”

Media reports say that an 8T aircraft might seem small compared to a 31-ton Boeing 737 or a 41-ton Airbus A320. However, it is comparable to a Learjet 70/75, which weighs just over 7 tons and carries nine passengers. This seems to be the market CATL is targeting.

However, higher energy density increases the risk of thermal runaway. At 500 Wh/kg, safety must be CATL’s top priority. To overcome this challenge, the company will keep safety testing at the topmost priority to ensure flawless service in the coming years.

Until then, let’s wait for further exciting developments on CATL’s electric plane mission.

MUST READ: World’s Largest EV Battery Maker, CATL, Enters Carbon Credit Market

The post CATL Unveils Ambitious 2,000 km Electric Plane Vision appeared first on Carbon Credits.

Avoiding a climate crisis presents significant challenges, especially in transitioning power and transportation systems to renewable and clean energy. This transition will vastly increase copper demand, surpassing current production levels, and giving major stocks a big lift. 

Copper’s exceptional conductivity makes it crucial for the energy transition. Copper is found in most appliances like toasters, air conditioners, microchips, cars, and homes. 

Interesting fact: The average car contains 65 pounds of copper, while a typical home has over 400 pounds. 

Constructing advanced grids for decentralized renewable sources and stabilizing their supply requires extensive copper wiring. Solar and wind farms, which cover large areas, demand more copper per power unit than centralized coal and gas plants. Electric vehicles (EVs) use over twice as much copper as gasoline cars. 

Meeting net zero carbon emission targets by 2035 may require doubling annual copper demand to 50 million metric tons. Even conservative estimates foresee a one-third demand increase over the next decade.

What more is the recent surge in copper prices starting early this year as you can see below. In May 2024, it reached almost $5 per pound in LME.

So, there could be no wiser move than investing in copper to ride along this rising demand. We believe so, too, that’s why we have considered some of the best copper stocks in 2024. Here are the top three copper stocks that would be worthy to add to your investment portfolio this 2024. 

The World’s Largest Copper Reserve Holder: Southern Copper

Market Cap: US$85.24 billion

For investors seeking substantial exposure to copper, Southern Copper Corporation’s reliance on this metal can be appealing. The prominent Mexican mining company primarily focuses on copper production, boasting the largest reserves of the metal globally. 

However, its operations extend beyond copper, producing valuable by-products such as silver, zinc, and molybdenum. This diversification, while significant, doesn’t overshadow its primary reliance on copper, which accounted for about 79% of the company’s net sales over the 3 years ending December 31, 2022.

Southern Copper’s stock has experienced notable volatility over the past few years. After a stellar performance in 2020, where the share price surged over 50%, the company saw a decline of more than 7% over the subsequent 2 years. 

However, 2023 marked a recovery, with the share price climbing nearly 25% in the first nine months. And it further skyrocketed in the beginning of 2024 and reached the first-time high in May. 

The recent uptick in copper prices has not only bolstered the company’s market performance but also enabled it to increase dividend payments significantly. At its current share price, the stock offers an attractive dividend yield of 5.4%, making it appealing to income-focused investors.

Strategic Investments and Project Development

Holding the largest copper reserves globally, Southern Copper is also operating top-tier assets in investment-grade countries like Mexico and Peru.

The company’s commitment to expanding its portfolio and reserves is evident through its significant capital investment program, exceeding $15 billion, planned for this decade. It aims to enhance and expand its operations across several high-potential projects, including:

Buenavista Zinc, Pilares, El Pilar, and El Arco Projects in Mexico: These projects are crucial for the company’s growth strategy. El Arco, in particular, benefits from significant infrastructure investments aimed at enhancing its competitiveness.
Tia Maria, Los Chancas, and Michiquillay Projects in Peru: These projects further diversify the company’s portfolio and strengthen its position in the global copper market.

From Southern Copper website

Southern Copper’s operations in Mexico and Peru provide a strategic advantage due to the stability and investment-grade ratings of these countries. This geographical diversification into regions with favorable mining regulations and robust infrastructure supports the company’s long-term growth and sustainability.

BHP Group: Casting A Wide Net in Copper

Market Cap: US$142.99 billion

BHP Group is a world-leading resources company engaged in the extraction and processing of minerals, oil, and gas. As a major player in the global copper market, the Australian miner is committed to innovative practices and sustainability, aiming to supply essential resources efficiently and responsibly.

BHP owns and operates several copper mines in Chile and the Olympic Dam in South Australia.

Copper is BHP’s second-largest revenue generator after iron ore. This mineral segment plowed over US$16 billion into the company’s income in 2023, with 1,716.5 kilotons of copper production.

The world’s largest mining company seeks to cast a wide net in copper with its exploration project in the high Arctic known as Camelot Project. 

BHP launched this program early this year, covering the Queen Elizabeth Islands in the Northwest Territories and Nunavut. The project aims to assess the potential for copper across six locations, spanning thousands of square kilometers. Exploration sites include Ellesmere Island, approximately 800 kilometers from the North Pole, Melville Island, Ellef Ringnes Island, and Axel Heiberg Island.

In response to the surge in copper prices, mining companies are scrambling to increase supply including BHP. The Australian mining giant recently announced a strategic partnership with Ivanhoe Electric to explore copper and other essential minerals.

Their collaboration aims to identify new sources of these critical resources, driven by the global shift towards clean energy and the electrification of various industries.

The exploration agreement with Ivanhoe Electric is structured in two stages. The first phase focuses on project generation, involving exploratory activities by both companies. If successful, the subsequent phase could lead to the formation of joint ventures to develop and operate mining projects.

More recently, BHP has made a bold move to expand its copper exposure by making a $39 billion bid for Anglo American. However, the offer was put off the table, delaying the company’s aim to cement its dominance in the copper market. Still, the Australian miner continues to explore significant copper projects and find ways to deepen its involvement in the sector.

MUST READ: Carbon Emissions Averted? BHP and Anglo-American Deal Off the Table

Coppernico Metal: Pioneering Copper-Gold Exploration in South America

Coppernico Metals Inc. is an exploration company dedicated to generating value for its shareholders and stakeholders through meticulous project evaluation and exploration excellence. The company aims to discover world-class copper-gold and nickel deposits in South America, leveraging its experienced management and technical teams’ proven track record in raising capital, discovery, and monetization of exploration successes.

Coppernico is currently centered on two primary projects in Peru: the Sombrero and Takana projects. The company either owns or has the right to purchase up to 100% control of the concessions. 

The Sombrero district, in particular, is a major focus due to its promising geological prospects. It features significant copper-gold values from surface samples and historical drilling, targeting skarn, porphyry, and epithermal deposits. 

Takana hosts high-grade copper-nickel occurrences with multi-kilometer mineralization trends. Initial dialogues have already started with communities near the Takana project, showing promising signs for future access agreements in the coming months.

Strategic Expansion, Evaluation, and Listing Plans

In its quest to offer diversified upside for shareholders, Coppernico has evaluated numerous exploration opportunities across South America. The company has narrowed its focus to 15 priority projects, aiming to identify additional assets that complement the discovery potential of Sombrero. 

Beyond Peru, Coppernico is also concentrating on exploration opportunities in Ecuador. The region has seen considerable success with several companies, including Solaris Resources, SolGold, Cornerstone, Dundee Precious Metals, and Lundin Mining.

The junior exploration company is an unlisted reporting issuer actively seeking listings on Canadian and U.S. stock exchanges. It plans to pursue a stock exchange listing application once it fulfills the requirements, a move that’s part of Coppernico’s broader strategy to enhance its visibility and attract a broader investor base.

In May this year, the company successfully closed its $19.37 million private placement financing. The financing included participation from Teck Resources Limited, a prominent Canadian mining company, under a subscription agreement. 

With its robust project pipeline, strategic evaluations, and plans for stock exchange listings, Coppernico is well-positioned to capitalize on its exploration successes and deliver substantial value to its shareholders. 

What Comes Next for Copper?

Copper’s pivotal role in achieving net zero emissions is increasingly recognized, especially in renewable energy technologies and electric vehicles (EVs). However, projections indicate a potential supply-demand gap, necessitating substantial investments in production and recycling to meet growing demand and sustainability goals.

Key industries driving copper consumption include equipment manufacturing, construction, infrastructure, and emerging sectors like EVs and green technologies. With the rising adoption of EVs, solar panels, and other clean energy technologies, copper demand is expected to double by 2035.

In light of ambitious net zero targets for 2035, industry estimates suggest that annual copper demand may need to reach 50 million metric tons. Even conservative projections anticipate a one-third increase in demand over the next decade, propelled by significant investments in decarbonization initiatives from both public and private entities.

Meeting this escalating demand presents challenges, such as declining ore grades and environmental concerns around mining. Addressing these requires significant investments, potentially driving copper prices higher.

READ MORE: Copper Prices Are Plunging at Over 2% After Hitting Near 52-Week High

Analysts predict continued price growth due to supply-demand imbalances and increasing demand from the green energy sector.

Uncertainties surrounding China’s economic recovery and the US Federal Reserve’s monetary policy add complexity to future copper price trajectories. However, analysts remain optimistic about copper’s long-term prospects, driven by the energy transition and increasing demand from sectors like EVs and renewable power.

As nations compete for limited future copper supplies, securing domestic or friendly sourcing and refining capabilities becomes a strategic imperative. Strategic investments in copper production and recycling are crucial to meet growing demand and achieve net zero emissions amidst the expanding renewable energy infrastructure and EV adoption.

The post The Top 3 Copper Stocks of 2024 appeared first on Carbon Credits.

H&M (Hennes & Mauritz) Group is partnering with Rondo Energy to explore heat storage technologies to decarbonize its textile supply chain. The global fashion retailer, a sensation among all age groups for its chic, street style, and edgy designs, believes in sustainability. They are committed to making fashion and design eco-friendly. Will this partnership help H&M take bigger strides to achieve net zero?

Let’s discover how this partnership can transform their textile operations. 

The Partnership is Weaving Sustainability into Style!

According to the press release rolled out on June 19, H&M is joining Rondo’s Strategic Investor Advisory Board (SIAB). The former would invest to support the expansion of Rondo’s operations and storage projects. Furthermore, the collaboration aims to replace fossil fuels with Rondo’s Heat Batteries. These energy-efficient batteries can transform renewable electricity into continuous, high-temperature heat and power essential for large-scale textile production.

In May, Rondo and SCG Cleanergy launched Southeast Asia’s first heat battery and the world’s first heat battery for a cement plant. They have established large-scale production in Thailand and plan to scale up to 90 GWh annually.

Notably, Southeast Asia is a global textile industry hub, where companies like H&M Group strive to impact people, economies, and our planet positively. Rondo, with its growing presence and expertise in the region, is well-positioned to support H&M Group’s efforts.

Eric Trusiewicz, CEO of Rondo Energy, said

“Rondo is thrilled to be working in partnership with H&M Group to explore how our technology can be of use in their supply chain, and to have H&M as an investor and member of our Strategic Investor Advisory Board.”

READ MORE: Walmart Looks at Innovative Carbon Capture to Turn CO2 Into Clothes

Rondo’s Heat Battery- the “Brave Little Toaster” Revolutionizing Textile Decarbonization

The Rondo Heat Battery is described as a “brave little toaster”. Essentially the battery is a pile of bricks with insane power to decarbonize the expansive textile sector. It is an innovative fusion of age-old techniques and modern automation to convert renewable energy into power. This approach can drastically reduce the carbon footprint of fabric production by offering a clean alternative to fossil fuels. H&M Group’s involvement in Rondo’s advisory board aligns them with other global titans like Rio Tinto, Aramco Ventures, SABIC, SCG, TITAN, and SEEIT, committed to low-cost, zero-carbon energy solutions.

Here’s the image of the battery:

source: Rondo Energy

Can this Innovative Battery Slash Global CO2 Emissions by 15%?

The answer is yes! Rondo Energy, the California-based renewable energy semiconductor manufacturing firm claims to eliminate 15% of global CO2 emissions in the next 15 years. The Rondo Heat Battery offers the lowest-cost energy storage and reduces energy price volatility. It provides 24/7 zero-carbon heat and eliminates scope 1 and 2 emissions. The battery ensures sustainability by nullifying NOx, SOx, and other particulate matter.

Additionally, its modular and scalable design allows easy integration as a drop-in replacement. The battery has proven highly profitable for consumers.

John O’Donnell, Founder & Chief Innovation Officer of Rondo Energy has further made an assertive statement, noting:

“Producing and finishing fabrics requires large amounts of low-cost energy, which makes our brick batteries a perfect fit. Today, coal delivers most of the heat and most of the carbon pollution making fabrics, because it’s always been cheap and simple to burn. But the world is changing. Region by region around the world, wind and solar power are becoming cheaper than fossil fuels. At Rondo, we’ve created a simple, practical tool to harness these new energy sources.”

H&M, Designing its Sustainable Path to Net Zero

Laura Coppen, Sustainability Investments at H&M Group Ventures has expressed her thoughts on this deal. She said,

“Rondo is H&M Group Venure’s first investment in decarbonization technology. The company’s thermal battery energy storage has the potential to help factories electrify, which is key to achieving our climate targets. We look forward to working closely with Rondo and the broader ecosystem in scaling decarb tech.”

The fashion industry faces challenges in decarbonization due to its reliance on low-cost energy. Currently, clothing production contributes approximately 5% of global GHG emissions, with annual increases.

Image: H&M GHG emissions

source: H&M

H&M aims to achieve net-zero emissions by 2024. For this, the company has strategically planned to reduce its GHG emissions by at least 90%. They also promise to offset residual emissions with permanent CO2 removal technology.

Their climate transition plan, as defined in their latest sustainability report primarily outlines strategies to achieve these targets. It focuses on:  

Energy efficiency, reducing energy use across their operations, logistics, and supply chain.
Sourcing 100% renewable electricity and engaging partners and suppliers to increase its renewable energy usage.
Scaling up circular systems to reduce dependency on virgin materials and decouple revenue from resource use.

Overall, the partnership between H&M and Rondo Energy shows promise in tackling the challenges of decarbonizing the textile industry. Their collaboration can make significant strides towards sustainability in fashion.

FURTHER READING: Lululemon and Samsara Eco Reveal World’s First Recycled Textile Using Enzymes

The post H&M Partners with Rondo Energy to Revolutionize Textile Sustainability appeared first on Carbon Credits.

What is Lithium?

Lithium, hailed as the ‘white gold‘ of modern times, is reshaping battery technology. Known for its lightweight nature, unparalleled electrochemical potential, and high energy density, lithium stands at the forefront of energy storage, driving the global transition to renewable energy. Its journey from a basic mineral to a crucial battery component highlights its pivotal role in technological advancement and sustainable energy solutions.

Amid the push for net zero emissions by 2050, lithium assumes paramount importance. The soaring demand necessitates ramped-up production, urging advancements in mining, refining, and sustainable extraction and processing technologies. 

As nations and industries align towards a greener future, lithium emerges as a linchpin in driving technical innovation and sustainability efforts. But before lithium turns out to be this important, it’s interesting that this unique element has a fascinating origin story. 

Humanity’s interaction with lithium spans just over 200 years. In the 1790s, Brazilian scientist José Bonefácio de Andrada e Silva discovered two new minerals, petalite and spodumene, on the Swedish island of Utö. 

Later, in 1817, Swedish scientist Johan August Arfwedson identified a new element in these minerals. Working in the lab of chemist Baron Jöns Jacob Berzelius, Arfwedson isolated a sulfate that did not contain any known alkali or alkaline earth metals. He named this new element lithium, derived from the Greek word “lithos,” meaning stone, due to its grey, stone-like appearance.

Where Does Lithium Come From?

Some of the lithium found in the rechargeable batteries of our smartphones, laptops, and EVs dates back almost 14 billion years ago.

The lithium cycle begins with magma that contains lithium rising to the Earth’s crust during volcanic activity. This magma cools and crystallizes into rocks such as granites or pegmatites. Over thousands of years, weathering breaks down these rocks, releasing lithium salts that flow into rivers. Most of this dissolved lithium ends up in the oceans. 

However, in some high mountainous regions like the South American Andes, rivers terminate in closed basins. Here, water evaporation leaves behind lithium-enriched brine in salt flats, known as salars.

Besides these natural deposits, lithium can also be sourced from oilfield brines, geothermal brines, and clays. Although lithium is not rare, it is highly reactive and never found in its pure form in nature. It ranks as the 33rd most abundant element in the Earth’s crust, with an estimated 98 million tonnes.

What Are The Applications and Uses of Lithium?

Lithium stands out for its extraordinary properties. It is the lightest and least dense solid element on the periodic table, with a standard atomic weight of 6.94. Highly reactive, lithium metal ignites on contact with water, a familiar demonstration in chemistry labs. 

Consequently, it is only found in mineral or salt forms in nature. In its metallic form, lithium is a soft, silvery-grey metal with excellent heat and electric conductivity, making it ideal for storing and transmitting energy.

Lithium is so soft it can be cut with a knife and has one of the lowest melting points (180.5 °C) and boiling points (1,347°C) among metals. Its high electrode potential and low atomic mass provide a high charge and power-to-weight ratio, which makes lithium especially suitable for use in rechargeable batteries.

Lithium Batteries: Powering the Future

A critical element in the production of rechargeable batteries, lithium is vital for electric vehicles (EVs), hybrids, laptops, and mobile phones. Lithium-ion batteries are favored by car manufacturers for their ability to store significant energy in compact spaces and quick recharge capabilities. 

Notably, lithium iron phosphate batteries are esteemed for their safety and durability, making them ideal for stationary storage and secure EV applications.

In the realm of EVs and lithium-ion batteries, two primary types of lithium, lithium carbonate, and lithium hydroxide, dominate. Major lithium producers often supply both variants to meet the demands of EV manufacturers, alongside catering to other industries requiring diverse lithium applications. 

Conversely, smaller lithium companies typically specialize in the production of a single lithium type.

Diverse Applications Beyond Batteries

The versatility of lithium goes beyond battery technology, impacting various sectors that leverage its unique properties. In aerospace, lithium’s lightweight yet robust characteristics enhance fuel efficiency and performance in aircraft and spacecraft. 

Incorporating lithium into glass and ceramics yields stronger, more durable products with enhanced thermal resistance, ideal for sturdier and more efficient cookware, tiles, and household items.

Furthermore, lithium compounds serve as high-temperature lubricants, enduring extreme conditions to ensure smooth operation for heavy machinery and vehicles under intense stress and temperature. This wide array of applications underscores lithium’s pivotal role, not only in driving cleaner energy solutions like electric vehicles but also in propelling manufacturing processes and product functionalities across diverse industries. 

The breadth of its applications underscores global dependence on lithium for technological advancements and sustainability initiatives. But how exactly is lithium produced or mined?

How is Lithium Mined?

Various ways are available to extract lithium, but two major ones exist to produce industrial lithium.

Conventional Lithium Brine Extraction

The majority of commercial lithium production today comes from extracting lithium from underground brine reservoirs, primarily located in the Lithium Triangle of the Andes (Bolivia, Argentina, and Chile) and in China.

Lithium brine recovery is a straightforward but time-consuming process. Salt-rich water is pumped to the surface and into evaporation ponds. Over months, water evaporates, precipitating various salts and increasing lithium concentration in the remaining brine.

During evaporation, hydrated lime (Ca(OH)2) is added to remove unwanted elements like magnesium and boron. Once lithium concentration is sufficient, the brine is pumped to a recovery facility where the following steps occur:

Brine purification to remove contaminants.
Chemical treatment to precipitate desirable products and byproducts.
Filtration to remove solids.
Treatment with soda ash (Na2CO3) to precipitate lithium carbonate (Li2CO3).
Washing and drying of lithium carbonate to produce the final product.

2. Hard Rock Mining

Hard rock mining, more complex and energy-intensive than brine extraction, involves extracting lithium from minerals such as spodumene, lepidolite, petalite, amblygonite, and eucryptite. Spodumene is the most abundant, providing most of the world’s mineral-derived lithium.

Australia leads in spodumene production, with operations also in Brazil, Portugal, southern Africa, and China. New mines are expected in North America and Finland by 2025. The process involves:

Mining and crushing the ore.
Roasting at 2012°F (1100°C), cooling to 140°F (65°C), milling, and roasting again with sulfuric acid at 482°F (250°C) (acid leaching).
During acid leaching, lithium ions replace hydrogen in the acid, forming lithium sulfate and insoluble residue.
Adding lime to remove magnesium.
Using soda ash to precipitate lithium carbonate.
Lime slurry may adjust pH to neutralize excess acid.

3. New Lithium Production Methods

In the US, commercial-scale lithium production mainly comes from a brine operation in Nevada. However, there’s growing pressure to increase domestic production to secure lithium supplies.

Opportunities for new methods include:

Direct lithium extraction from geothermal brines (e.g., Salton Sea, CA) and produced water from shale gas fracking (Texas).
Extraction from lithium-bearing clays in Nevada.

Various production methods are being tested, including:

Acid leaching with sulfuric and hydrochloric acid.
Using hydrated lime to remove impurities and neutralize waste before returning it to the environment.

These innovations aim to enhance domestic lithium production and ensure a stable supply of this critical metal.

What is The Current State of the Lithium Market?

In the rapidly evolving landscape of the lithium market, competition is fierce and dynamics are swiftly changing. With the price of lithium batteries constituting 40% of an electric vehicle’s production costs, major EV manufacturers like Tesla, Ford, and BYD are actively seeking cost-effective alternatives. 

As global aspirations for emission-free transportation by 2050 intensify, about 30 nations have committed to phasing out the sale of new fuel-engine cars, driving demand for critical EV minerals.

China currently leads the lithium battery production market, but the United States and latecomer South Korea are aiming to challenge its dominance. Amid this dynamic environment, understanding the nuances of lithium is crucial. The next sections explore market and price dynamics, the key players, and the outlook associated with the burgeoning lithium industry.

Asia-Pacific’s Dominance and Its Global Impact

The global lithium market has been significantly shaped by the commanding influence of the Asia-Pacific region, spearheaded by economic powerhouses such as China, Japan, and Korea. Recognizing the transformative potential of lithium, especially in battery technology, these nations swiftly invested in the industry, initially targeting consumer electronics and later expanding into EVs.

Their strategic vision included not only production and processing but also the entire lithium supply chain, from extraction to advanced battery manufacturing. This comprehensive approach has granted them considerable leverage over global battery technology trends and pricing dynamics.

In contrast, North America has struggled to keep pace with this rapid progress. Hindered by a fragmented approach and a lack of cohesive strategy and investment, the region’s lithium industry lags behind its Asia-Pacific counterparts. 

This disparity has hindered the development of a robust domestic lithium market in North America. This leaves the region vulnerable to supply fluctuations and pricing determinations driven by Asia-Pacific leaders.

China’s stronghold extends beyond LFP batteries, encompassing lithium-ion battery, cathode, and anode production, as well as lithium, cobalt, and graphite processing and refining. 

Despite efforts by governments in Europe, the United States, and South Korea to develop domestic battery supply chains, the majority of the EV battery supply chain is expected to remain concentrated in China for the foreseeable future, maintaining its lead in global battery production capacity until 2030, as projected by the International Energy Agency (IEA).

The Shifting Trend in Lithium Batteries

Tesla and Ford Motor, along with other major automakers, have embraced lithium iron phosphate (LFP) batteries as a cost-effective alternative for some of their EVs, moving away from cobalt-based and nickel-based lithium-ion batteries prevalent in Europe and the US. LFP batteries, identified as the most economical lithium-ion battery type in 2022, now constitute around 40% of global EV production. Demand for this battery is projected to rise substantially in the coming years. 

Tesla’s shift to LFP batteries at its Shanghai plant since October 2022 signals a broader industry trend. Its peers like Mercedes-Benz Group AG, Volkswagen AG, and Rivian Automotive Inc. also commit to integrating LFPs into their vehicles. 

This shift is largely facilitated by Chinese manufacturers like Contemporary Amperex Technology (CATL) and BYD, which dominate the LFP market, accounting for 99% of global LFP battery production. CATL, in particular, stands as the world’s largest EV battery maker, supplying batteries to Tesla and various other automakers. 

Understanding Lithium Prices: Key Factors and Trends 

The global appetite for lithium has surged, propelled by the burgeoning battery industry and the widespread adoption of lithium-ion batteries in electric vehicles (EVs). This surge in demand casts a glaring spotlight on the current state of lithium supply, underscoring the escalating consumption rates worldwide. 

In this segment, we delve into the intricate dynamics of various factors driving the market, examining how the industry is responding to this mounting need. Key factors such as supply and demand dynamics, mining capacities, geopolitical influences, and technological advancements play pivotal roles in shaping the delicate balance between supply and demand. 

Understanding these factors is crucial for stakeholders in the lithium industry, from miners to battery manufacturers and investors. Here are the primary elements that impact lithium prices:

Navigating the Supply-Demand Dynamics

The lithium market exhibits characteristics of an immature market. The supply swings between deficit and surplus due to strong growth and infrastructure development challenges. 

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With rechargeable batteries constituting around 85% of global demand, the surge in EV uptake has led to soaring demand. 

However, the slow pace of infrastructure development has hindered supply growth, resulting in price spikes in 2022. As EV subsidies decrease and prices normalize, we anticipate a controlled decline, settling around $20,000 per tonne by the decade’s end.

Therefore, any imbalance in the supply and demand equation directly affects prices. Any oversupply can depress prices until demand catches up. 

Conversely, a surge in demand, driven by the EV boom, can outpace supply, pushing prices up. This is exactly what happened in November 2022 when a record-breaking lithium price rally happened, reaching over five-fold increase. 

Unraveling Geopolitical Influences

Geopolitical factors significantly influence the lithium market due to the concentration of lithium reserves in specific regions. Countries like Australia, Chile, and Argentina hold substantial lithium reserves and are major players in the global supply chain. Political stability in these countries is crucial. Any political unrest or policy changes can disrupt supply and affect global prices.

Moreover, government policies regarding mining operations, environmental standards, and export regulations can also impact lithium production and prices. Favorable policies can boost production, while restrictive regulations can hinder it.

International trade policies, including tariffs and trade agreements, further influence the flow of lithium across borders. For example, trade tensions between major economies can lead to tariffs on lithium products, affecting global supply chains and prices.

This is what happen recently with the United States announcing its plan to increase tariffs on Chinese imports, including EVs, batteries, and solar cells. 

READ MORE: U.S. Raises Tariffs on $8B China Imports: EVs, Batteries, and Solar Cells Included

Breaking Down Technological Developments

Advancements in technology have a dual impact on lithium prices by affecting both demand and supply. 

Battery Technology: Breakthroughs in battery technology can significantly influence lithium demand. The development of alternative battery chemistries, such as solid-state batteries or sodium-ion batteries, could reduce reliance on lithium, potentially decreasing its demand and price. On the other hand, innovations that enhance lithium-ion battery performance can boost demand.
Extraction and Processing Technologies: Technological improvements in lithium extraction and processing can increase supply efficiency and reduce production costs. For example, advancements in direct lithium extraction (DLE) techniques can make it easier and more cost-effective to extract lithium from brine resources, positively impacting prices.

Disentangling Environmental Regulations

Environmental considerations are increasingly shaping the lithium market today. 

Stricter environmental regulations on mining practices can limit lithium supply and drive up prices. Mining operations must comply with environmental standards to mitigate their impact on ecosystems and water resources, which can increase operational costs.

Furthermore, the growing emphasis on reducing the environmental footprint of lithium extraction is prompting the industry to adopt greener practices. These sustainable techniques, such as using renewable energy in mining operations and recycling water, may initially increase costs. However, they are expected to lead to long-term sustainability and potentially stabilize prices.

There is also rising pressure from consumers and investors for companies to adhere to environmental, social, and governance (ESG) criteria. Companies that prioritize sustainable and ethical practices may gain a competitive edge, influencing market dynamics and prices.

Quality Challenges in Battery-Grade Lithium Production

As lithium increasingly powers rechargeable batteries, ensuring high-quality lithium products for battery use becomes paramount. Producing battery-grade lithium involves intricate refining processes to meet stringent quality and purity standards. 

New refineries typically start with lower-quality technical-grade lithium, necessitating refining improvements to achieve battery-grade purity. Consequently, despite an overall supply surplus, the battery-grade lithium market may face short-term constraints until refining operations are optimized.

What are the Top Lithium Producing Countries?

In 2023, three countries – Australia, Chile, and China – dominated global lithium production, collectively accounting for 88% of the total output.

Australia: Leading the Charge

Australia stands as the world’s top lithium producer, sourcing the mineral directly from hard-rock mines, particularly spodumene. Over the past decade, Australia witnessed a remarkable surge in production. In 2013, output stood at 13,000 metric tons, soaring to an impressive 86,000 metric tons by 2023.

Chile: Brine Extraction Expert

Chile follows closely behind Australia in lithium production, albeit with more modest growth. The South American nation primarily extracts lithium from brine sources, with production climbing from 13,500 tonnes in 2013 to 44,000 metric tons in 2023.

China: Closing the Gap

China, also harnessing lithium from brine, has been steadily approaching Chile’s production levels. From a modest 4,000 metric tons in 2013, China ramped up domestic production to 33,000 metric tons in 2023. 

Additionally, Chinese companies have expanded their influence in the global lithium market, with three of them ranking among the top lithium mining entities. Tianqi Lithium, the largest among them, holds a significant stake in Greenbushes, the world’s largest hard-rock lithium mine in Australia.

Argentina: A Rising Contender

Argentina emerges as the fourth-largest lithium producer, tripling its output over the past decade. With increased investments from international players, Argentina aims to further enhance its lithium production capacity.

With major producers scaling up to meet the surging demand, particularly from the clean energy sector like electric vehicle batteries, the lithium market recently experienced a surplus. This oversupply led to a significant price collapse of over 80% from the record highs witnessed in late 2022.

How to Invest in Lithium? Stocks, ETFs, and Derivatives

Due to the nascent stage of the lithium market, the range of investment products available is relatively limited compared to other commodities. Nevertheless, investors can still tap into this dynamic market through two primary avenues: lithium stocks and lithium ETFs.

Lithium Stocks:

Investing in individual stocks remains one of the most direct ways to gain exposure to the lithium industry. However, it’s crucial to recognize that stocks serve as proxies for the market’s performance.

The soaring costs of lithium don’t always translate into corresponding increases in lithium stock prices. Establishing new mining operations can be capital-intensive, and ultimately, a stock’s valuation hinges on the company’s financial health. Despite this caveat, lithium stocks have demonstrated robust performance over the past five years. 

Here are the 3 prominent lithium stocks we find making hits this year.

Investing in lithium stocks offers several benefits. Firstly, individual lithium stocks provide significant earning potential if the company performs well. Additionally, many lithium stocks pay dividends, offering investors regular income that can be reinvested to bolster portfolio growth. 

Moreover, some lithium producers have alternative revenue streams, which can help mitigate the volatility associated with lithium prices. However, investing in lithium stocks also entails certain risks. For instance, putting all investments into one or two lithium stocks can result in a lack of diversification in the portfolio. 

Furthermore, the return on lithium stocks is heavily dependent on the financial health of the company, necessitating regular updates on the company’s fundamentals and thorough research.

Lithium ETFs

For investors seeking exposure to the lithium market without the time-intensive task of researching individual stocks, lithium exchange-traded funds (ETFs) offer a convenient option. These ETFs track an index composed of a diversified collection of lithium stocks, providing you with instant access to a broad portfolio that includes both lithium producers and manufacturers.

Here are two prominent lithium ETFs:

Global X Lithium & Battery Tech ETF (LIT): LIT comprises 39 different lithium and battery stocks. With $4.5 billion in assets under management, this ETF charges an annual fee of 0.75%.
Amplify Lithium & Battery Technology ETF (BATT): BATT is solely focused on lithium battery providers. Holding $194 million in assets, this ETF charges an annual fee of 0.59%.

Investing in lithium ETFs presents its own set of benefits. ETFs provide instant diversification across a broad range of lithium-focused stocks, thereby reducing the risk associated with individual stock selection. Also, ETFs spread investment risk across a large portfolio of stocks, making them less risky than individual stocks. 

Furthermore, similar to individual stocks, some lithium ETFs offer dividend schemes, providing investors with the opportunity for positive cash flow. Nevertheless, there are risks associated with investing in lithium ETFs as well. 

For example, during upward trends in the lithium market, returns from ETFs may not be as substantial as those from individual stocks. And take note, ETFs are not free products; providers charge investors a percentage fee for operating and maintaining the ETF.

Direct Investment Through Commodities Market

For those interested in direct investment, lithium can be traded in the commodities market through futures and options. These derivatives allow you to buy and sell access to lithium as a material, though they come with significant risk and volatility, making them unsuitable for inexperienced investors.

Futures Contracts

A futures contract is an agreement to buy or sell a commodity at a future date for a specified price. There are two types:

Standard Futures Contracts: You commit to buying the actual commodity. If you hold the contract until expiration, you must purchase the physical lithium.

Cash Settlement Futures Contracts: Instead of exchanging the physical commodity, the parties settle the contract’s value in cash.

Options Contracts

Options contracts allow you to trade the value of an asset, with the added flexibility of choosing whether to execute the contract at expiration. This differs from futures contracts, which must be executed regardless of market conditions. When buying an options contract, you pay an upfront fee known as a “premium.”

Investing in lithium offers several pathways, including stocks of lithium producers or users, funds that aggregate lithium-related equities, and direct commodity trading through futures and options. Each method carries different levels of risk and complexity, catering to various investor preferences and experience levels.

Who are the Major Lithium Companies? 

1. ALBEMARLE: Market cap: US$14 billion

Albemarle, based in North Carolina, stands as the largest lithium company by market cap and the world’s leading lithium producer, boasting over 7,000 global employees. Following a 2022 realignment, Albemarle now operates two primary business units, with a particular focus on lithium-ion battery and energy transition markets under its Albemarle Energy Storage unit. This division oversees lithium carbonate, hydroxide, and metal production.

With operations spanning Chile, Australia, and the US, Albemarle holds a diverse portfolio of lithium mines and facilities. In Chile, the company produces lithium carbonate at its La Negra conversion plants, leveraging brine from the Salar de Atacama. 

In the US, Albemarle aims to bolster domestic production in line with the Inflation Reduction Act. It owns the Silver Peak lithium brine operations in Nevada’s Clayton Valley, set to double lithium production by 2025. Albemarle received a $90 million critical materials award from the US Department of Defense in September 2023 to enhance domestic lithium production and support the EV battery supply chain. 

Additionally, the company plans to revive the Kings Mountain lithium mine in North Carolina, backed by US government funding. Albemarle also plans to develop the Albemarle Technology Park in North Carolina for advanced R&D in lithium innovation.

2. SQM: Market cap: US$12.07 billion

SQM, a chemicals giant operates in over 20 countries, serving customers across 110 nations. The company’s diverse business areas span lithium, potassium, and specialty plant nutrition.

Primarily operating in Chile, SQM extracts brine from the Salar de Atacama and processes lithium chloride into lithium carbonate and hydroxide at its Salar del Carmen lithium plants near Antofagasta. The company is expanding production at Salar del Carmen from 180,000 MT to 210,000 MT, initiating this year. 

To mitigate environmental impact, SQM announced a $1.5 billion investment in the Salar Futuro project, focusing on advanced evaporation technologies, direct lithium extraction, and a seawater desalination plant.

Despite uncertainty stemming from Chile’s National Lithium Strategy, SQM’s existing contracts, extending through 2030, are expected to be respected by the government. In early 2024, a partnership formed between SQM and state-owned mining company CODELCO, with CODELCO holding a majority control stake.

In Australia, SQM is developing the Mount Holland lithium project, recognized as one of the world’s largest hard-rock deposits, in partnership with Wesfarmers. Anticipating lithium hydroxide production to commence by H1 2025, SQM’s lithium carbonate capacity was projected to reach 210,000 tons by the beginning of 2024.

3. Tianqi Lithium: Market cap: US$10.43 billion

Tianqi Lithium is a subsidiary of Chengdu Tianqi Industry Group based in China. As the world’s largest hard-rock lithium producer, Tianqi Lithium operates assets in Australia, Chile, and China. The company holds a notable stake in SQM, having acquired a 2.1% share in 2016, later increasing it to 23.77%.

In Australia, Tianqi owns the Greenbushes mine, acquired in 2012 through the purchase of Talison Lithium. The company also developed a lithium hydroxide plant in Western Australia’s Kwinana Industrial Area, commencing production in Q3 2019. Subsequent output began in mid-2021. 

Rising lithium prices and its Hong Kong listing in 2022, which raised approximately US$1.7 billion, contributed to Tianqi’s buoyancy. Commercial production at Kwinana’s Train 1 commenced in December 2022, with Train 2 anticipated to start in 2024. Once operational, the hydroxide plant is projected to produce 48,000 MT per year, utilizing lithium from Greenbushes.

In February of the current year, Tianqi Lithium updated its total mineral reserves at Greenbushes to 447 million tonnes, with an average lithium oxide grade of 1.5%, equivalent to about 16 million tonnes of lithium carbonate.

What is In Store for Lithium?

Forecasting lithium supply beyond the end of the decade presents challenges due to limited visibility into existing, planned, and potential projects. While projections until 2030 can be reasonably accurate, the landscape becomes murkier. 

On the demand side, projections suggest that it will tremendously to almost 4 million tonnes, as shown below. But of course, as discussed earlier, various trends impact this demand trajectory. 

Incentive pricing becomes a critical factor in determining the attractiveness of new projects. With an estimated 1.5 million tonnes of supply, the fully allocated cost of lithium would be around $15,000 per tonne, suggesting market pricing would exceed this threshold.

Navigating the Immaturity of the Lithium Market

Forecasting the future of the lithium market is hindered by its relative immaturity. Lack of globally accepted specifications and pricing anchors complicates pricing dynamics. 

Lithium products, akin to specialty chemicals, require precise specifications, yet the industry’s growth trajectory impedes standardization efforts. While greater standardization is anticipated in the future, it will evolve gradually.

According to Bloomberg estimates, demand for lithium-ion batteries will increase tenfold over the next decade. This surge in demand is largely driven by the global commitment of over 100 countries to achieve net zero emissions within the coming decades. 

As part of this commitment, many nations are turning to the electrification of transportation as a crucial solution to reduce GHG emissions and combat climate change. This shift towards electrification underscores the growing importance of lithium-ion batteries in powering EVs and other clean energy technologies. 

The Role of Partnerships in Shaping the Lithium Industry

In 2022, a significant portion of lithium supply was dominated by a handful of companies. However, future industry dynamics are expected to witness a decline in their market share, as smaller firms expand and new ventures emerge. 

While horizontal integration may not be a prevailing trend, vertical integration is poised to play a pivotal role. Partnerships between miners and refiners offer mutual benefits, enabling risk-sharing and capital investment in new projects. 

Collaborative efforts between upstream and downstream operations enhance expertise, improve margins, and capture a larger market share. Such partnerships, exemplified by ventures like Pilbara Minerals and POSCO in South Korea and SQM and Wesfarmers in Western Australia, are anticipated to become increasingly common in the industry’s future landscape.

Conclusion 

The evolution of lithium, from its discovery over two centuries ago to its pivotal role in powering modern technology, underscores its significance in shaping our present and future. As the world accelerates towards a sustainable energy paradigm, lithium emerges as the linchpin of this transition, fueling advancements in battery technology and driving the proliferation of electric vehicles and renewable energy storage solutions.

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