Battery Metals
Feature Articles
The US Lithium Gold Rush
May 2021
Lithium demand is set to grow more than 40 times by 2040 if countries want to meet the goals of the Paris agreement. While electrifying transport and shifting to renewable energy systems is turbocharging demand and stoking prices, projected supply is estimated to meet only half of this need by 2030.

It therefore comes as no surprise that the US, in competition with China and Europe, is racing to find new supplies of lithium to achieve economic and technological dominance over the long-term.

Lithium prices have rallied this year because of a strong recovery in demand from battery producers and supply disruptions from Australian producers. AME expects the global lithium carbonate price and the global lithium hydroxide price to average US$10,850/t and US$12,586/t, respectively, in 2021.

Lithium is the commodity most expected to benefit from the EV transition as lithium-ion batteries contain around 7% to 10% lithium regardless of the overall battery chemistry. Lithium is used because it is lightweight, can store lots of energy and can be repeatedly recharged.

A lack of investment in new mines presents an obstacle to further EV battery cost declines, which is needed for widespread adoption. A doubling of lithium prices would raise battery costs by 6%. Ensuring adequate supply is therefore critical to meeting climate goals.

 

Race to the Future

The Biden administration wants the US to lead the world in electric vehicle and battery production as part of an ambitious agenda to outpace China and produce jobs.

Even though it has some of the world’s largest reserves, the US only has one large-scale lithium mine. Albemarle's Silver Peak in Nevada, which first opened in the 1960s, produces just 5tpa— less than 2% of the world’s annual supply. Most of the raw lithium used domestically is imported from Latin America or Australia, and most of it is processed and turned into battery cells in China and other Asian countries.

“China just put out its next five-year plan,” Secretary of Energy Jennifer Granholm, said recently. “They want to be the go-to place for the guts of the batteries, yet we have these minerals in the United States. We have not taken advantage of them, to mine them.” In March, she announced grants to increase production of crucial minerals. “This is a race to the future that America is going to win,” she said.

Miners, automakers and technology companies are keen to accelerate domestic lithium production and are urging the Biden administration to insert a US$10bn grant program into the proposed US$2.3tn infrastructure bill, on the grounds of national security.

“Right now, if China decided to cut off the US for a variety of reasons we’re in trouble,” said Ben Steinberg, an Obama administration official turned lobbyist, who was hired by Piedmont Lithium in January.

 

Lithium Americas

Lithium Americas steps is aiming to build the first new large-scale lithium mine in the US in more than a decade. The Thacker Pass project in Nevada, given final approval in the last days of the Trump administration, is aligned with President Biden's plan to aggressively fight climate change and grow the economy long-term by making the US a green manufacturing powerhouse.

 

 

Thacker Pass is expected to produce 60ktpa of battery-grade lithium carbonate (Li2CO3) over a 46-year mine life, with phase 1 output at 30ktpa for 3.5 years. Initial capital costs are estimated at US$1.1bn (phase 1 at US$581m) with cash costs (average LOM) at US$2,750/t Li2CO3 ($4,088/t before by-product credits). The project has an after-tax US$2.6bn NPV (8% discount) and an IRR of 29.3% at US$12,000/t Li2CO3.

All remaining state permits and water right transfers needed to start construction are expected to be issued later this year, Lithium Americas said on May 6. Results of a Feasibility Study targeting an initial 30–35,000ktpa lithium carbonate equivalent in Phase 1 is expected by year end.

The Vancouver-based company is also considering a 20ktpa lithium hydroxide chemical conversion plant. Construction of Thacker Pass is expected to begin in early 2022. Lithium Americas also expects to start production at its 40ktpa Cauchari-Olaroz lithium brine project in Argentina in mid-2022.

 

Jindalee Resources

Jindalee Resources announced an updated mineral resource estimate for its 100%-owned McDermitt lithium project—making it the largest deposit in the US. The ASX-listed company posted an updated Indicated and Inferred resource of 1.43Bt at 1,320ppm Li at 1,000ppm Li cut-off grade (COG)—totalling 10.1Mt of lithium carbonate equivalent (LCE). This surpasses Thacker Pass (8.3Mt LCE at 2,000ppm Li COG).

Jindalee plans to start its biggest drilling program yet in August to define the full extent of the major deposit, located in Oregon. Meanwhile, advanced metallurgical testwork will inform a scoping study set to be delivered by the end of June.

In late March, Jindalee announced it had staked 271 new claims at McDermitt, increasing the project's size by 67% to 54.6km3. Meanwhile, attrition scrubbing increased the lithium grades by 60.9% and leaching of beneficiated samples confirmed high extraction rates and lower acid consumption. Jindalee said it was considering listing the company's US lithium assets on a North American exchange to capitalise on interest from US investors.

 

 

Livent Corp

Livent Corp, which supplies Tesla with lithium hydroxide, said it would more than double its annual lithium production to 115kt. The rising demand "reflects what feels like a real and fundamental turning point in our industry," said chief executive Paul Graves.

The Philadelphia-based company said it now expects its 2021 revenue to be at the high end of its previous guidance of US$335-365m. NYSE-listed Livent said it would resume expansions in the US and Argentina that had been paused last year because of the pandemic. The 5t hydroxide addition at North Carolina, and the phase 1 carbonate expansion of 10t in Argentina will reach commercial production in Q3 2022 and Q1 2023, respectively.

The lithium producer reported a first-quarter net loss of US$800k, faring better than the US$1.9m loss in the year-ago period. Revenue increased 33% on-year or 12% on-quarter to US$91.7m.

 

Piedmont Lithium

Piedmont Lithium is looking to build an open-pit mine in North Carolina, the first US greenfield lithium project in more than 50 years. During the first-quarter, Piedmont started a definitive feasibility study (DFS) for the lithium hydroxide operations using Metso Outotec’s alkaline pressure leach technology. The DFS is expected to be completed by the third quarter, while a preliminary economic assessment is expected in May. Piedmont increased its Mineral Resource for the operation by 40% to 39.2Mt at a grade of 1.09% lithium.

The operations involve a mine and concentrator to produce spodumene, and a lithium hydroxide chemical plant. “Piedmont is at the nexus two important megatrends – the electrification and decarbonisation of the economy and the regionalisation of supply chains," said CEO Keith Phillips. The company redomiciled from Australia to the US in the first quarter, with its primary listing now on the Nasdaq.

 

Albemarle

US-based Albemarle, the world's largest lithium producer, aims to double its production capacity to 175ktpa by the end of the year when two conversion projects are complete.

 

 

First-quarter lithium net sales of $279m rose 18% on-year, driven by higher volumes (+28%), partially offset by lower pricing (-10%). Adjusted EBITDA of US$106.4m increased by 35%. In February, the board declared a quarterly dividend of US$0.39 per share, rising for the 27th consecutive year. Cash flow rose by US$2.9m on-year to US$157.9m. First-quarter capex of US$179.7m decreased by US$35m versus the prior year as the company nears completion of its expansion projects.

Albemarle expects to commission two lithium expansion projects, known as wave 2, by the end of the year. They include the company's 60%-owned 50ktpa lithium hydroxide project, Kemerton in Western Australia, and its 100%-owned 40ktpa lithium carbonate project, La Negra in Chile, this year. They will add commercial volumes by 2022.

Potential wave 3 investment projects (3–5-year timeline, US$1.5bn capex) include China (MARBL), Silver Peak in Nevada, China Greenfield and Kemerton in WA. Wave 4 includes Kemerton and Kings Mountain in North Carolina.

 

Standard Lithium

Standard Lithium's flagship joint-venture Lanxess lithium project in Arkansas aims to extract lithium from over 150k acres of permitted brine operations and three plants. At 3.14Mt LCE in Indicated Resources—the largest reported lithium brine in the US.

 

 

A preliminary economic assessment (PEA) released in 2019 considers a phased build-out to 20,900tpa over a project life of 25 years, with an estimated capex of US$437m, from the JV with Lanxess AG at their three-operating bromine-processing plants. The project has an after-tax US$989m NPV (8% discount) and an IRR of 36% at US$13,550/t Li2CO3.

The TSX-listed company commissioned an industrial scale LiSTR Direct Lithium Extraction (DLE) demonstration plant at the Lanxess facility in June last year. Standard Lithium said in March that it successfully converted the lithium chloride made by its DLE plant into 99.985% pure lithium carbonate using conventional OEM technology.

The work was completed by Veolia at their facility in Illinois. The move came after the company announced in December that it also produced battery-grade material using its own SiFT technology. The two different processes reduce project risk and offers greater flexibility, the company said.

The scalable, environmentally friendly process eliminates the use of evaporation ponds, reduces processing time from months to hours and greatly increases the effective recovery of lithium, the company says. The company is also pursuing development of 30k acres of separate brine leases located in Arkansas and 45k acres of mineral leases in California.

 

Rio Tinto

Rio Tinto announced last month that it produced lithium carbonate from waste piles at an existing mine in Boron, California. The US$10m first phase pilot plant at Boron will produce about 10t of LCE this year by chemically processing material from the pile of decades-old mining waste. An initial small-scale trial in 2019 successfully proved the process of roasting and leaching waste rock to recover high grades of lithium.

By the end of this year, Rio will decide whether to invest US$50m to build an industrial-scale lithium plant with annual capacity of 5kt—enough for around 15k Tesla Model S batteries.

Rio Tinto’s lithium pipeline includes the Jadar lithium-borate project in Serbia, for which a feasibility study is expected to complete by the end of 2021.