The global lithium market needs investment of at least US$12 billion ($17.32 billion) in just the next five years if it is to have any realistic hope of matching supply with demand, according to the President of Californian-based Global Lithium LLC Joe Lowry.

The forecast was made in Perth on the second day of the Paydirt 2019 Latin America Downunder mining conference by renowned international lithium market expert, Mr Lowry.

In a wide-ranging address, designed in part to deflate the myths around the commodity’s forward supply, demand and pricing dynamics, Mr Lowry dismissed talk of lithium chemical over-supply as a myth.

“The ‘myth’ is driven by reports from ‘big bank’ analysts and supported by statements by Chilean regulator, CORFO, after its revised agreements allowing Albemarle and SQM to produce more material from the Atacama brine resource. The reality is increasing production quickly is not so easy,” Mr Lowry said.

“The future of lithium is all about E-mobility and energy storage. E-mobility is a much broader concept than just cars - it covers all forms of transportation from scooters to buses to ferries and, hopefully, even air transportation, in the coming years.”

Mr Lowry told the Latin America Downunder forum that the ‘Big Four’ global lithium producers, SQM, ALB, Ganfeng and Tianqi, could not alone meet 2025 lithium demand.

“Overall, the industry faces a lack of financing and needs to inject more than US$12 billion within five years to have a chance of meeting demand,” he said.

“This requirement is exacerbated further by known and emerging failures in lithium start-ups which have demonstrated a lack of necessary skillsets – high profile failures that have discouraged sector investment.

“There will not be any significant lithium chemical oversupply anytime soon. While there have been many optimistic supply forecasts, recent results speak for themselves.00” 

On the issue of source, the Global Lithium executive called for a more balanced debate, saying analysts’ predictions of dominance of hard rock lithium were both incorrect and incomplete.

“Neither lithium source – hard rock or brine – will dominate the future,” Mr Lowry said.

“All lithium supply is not created equal.

“It will be cathode selection decisions that will drive product choice. Any price issue will be defined more by the actual production cost curve at the time – but expect prices to be much firmer going forward.”


Image: Joe Lowry, The West Australian.