Lithium Ion Battery Sector Trending Up With Estimated Market Share to Exceed $90 Billion by 2024
Jun 23, 2019
PALM BEACH, Florida,-- According to S&P Global lithium demand should grow at least 20% in 2019 compared with 2018, driven by batteries for electric vehicles, Chilean producer SQM said in its annual report. There appears to be an amount of emerging juniors and majors of the lithium mining sector attempting to modernize the industry with advancing and improved abilities to extract lithium at a lower cost and faster pace over the lithium minors of the recent past. In other words, there is now a new level of producers in the markets with lithium demand set to soar once again. Analysts are now giving way to the notion that the supply-demand balance may just be actually much tighter than prices suggest. A few key demand drivers for the lithium industry starts off the obvious with the Global demand for electric vehicles (EV). According to Argus Media, lithium ion batteries in EVs have increased from 10 GWh to 70 GWh in only a decade, with estimates placing the market to reach 223 GWh by 2025, an increase of 300x from current levels. EVs have been taking off in the United States, with sales increasing by 81% in 2018, though a more modest increase is expected in 2019. EVs take up 2.4% of total vehicles in the United States. Elon Musk wants 20 gigafactories producing lithium batteries for Tesla EVs by the next decade. Benchmark thinks new factories will be using up 534,000 tons in new demand (on top of current demand of 200,000 tons) by 2028. hen there is the other demand side factor: as the energy storage sector grows, demand for lithium-ion batteries will grow by leaps and bounds. By one estimate, the market could reach $92 billion by 2024, with a CAGR of 16%. The market was worth $21.6 billion in 2018. Active stocks in the markets this week include NRG Metals Inc. (TSX-V: NGZ) (OTC: NRGMF), Sociedad Química y Minera de Chile S.A. (:NYSE: SQM), Neo Lithium Corp. (TSX-V:NLC) (OTCQX: NTTHF), Freeport-McMoRan Inc. (NYSE: FCX), Lithium Americas Corp. (TSX:LAC) (NYSE: LAC).
A slightly more conservative estimate has the market reaching $40 billion by 2025, but that's still nearly 100% in growth in less than a decade. Another estimate is $60 billion by 2024. Due to declining prices, Bloomberg raised its forecast for lithium ion batteries due to lower than expected prices. While one of the better takes on the industry could come from the estimate from from Global Market Insights, which predicts energy storage and automotive lithium ion battery demand to double by 2024 as well as stating "Beyond electric vehicles and energy storage, the U.S. market will see changes due to the "growing adoption of smart devices coupled with [a] shift toward digitization across industrial and healthcare sector[s]".
NRG Metals Inc. (TSX-V:NGZ.V) (OTCQB: NRGMF) BREAKING NEWS: NRG Metals is pleased to announce positive results from an independent Preliminary Economic Assessment (PEA) for its Hombre Muerto North Lithium Project near Salta, Argentina.- Highlights include:
- US$217 million (Cdn$290 million) after-tax Net Present Value at 8% discount rate and Internal Rate of Return of 28.0%;
- PEA based on a production rate of 5,000 tonnes of lithium carbonate per year;
- Processing based on simple and proven solar evaporation technology;
- Expected mine life of 30 years with a 3 year ramp up period starting 2021;
- Fully loaded operating cost of US$3,122 per tonne of lithium carbonate;
- Total capital expenditure of US$93 million.
The PEA was prepared by Knight Piesold Consulting ("KP") and JDS Energy and Mining ("JDS"), both of Vancouver, in accordance with the standards set out in National Instrument 43-101 Standards of disclosure for Mineral Projects (NI 43-101), and, CIM's Best Practice Guidelines for Mineral Processing (BPGMP). The PEA is preliminary in nature, and there is no certainty that the PEA will be realized.
Company President and C.E.O Adrian F.C. Hobkirk is quoted: "We are very pleased that NRG has advanced the HMN Project from discovery to PEA in just under twelve months. The PEA results highlight attractive economics associated with the project, including a smaller environmental footprint and manageable CAPEX. We look forward to taking the HMN Lithium Project to the next stage of development as quickly as possible ".
Preliminary Economic Assessment Highlights:After-tax Net Present Value (" NPV ") 8% discount rate - $ 217 million
- After-tax Internal Rate of Return ("IRR") - 28.0%
- CAPEX Capital Expenditures - $ 93.3 million
- OPEX Cash Operating Costs (per metric tonne of lithium carbonate) - $ 3,112
- Average Annual Production (lithium carbonate ) 5,000 Mine Life - 30 years
- Payback Period (from commencement of production ) - 2 years 5 monthsThe Project is located at the northern portion of the Salar del Hombre Muerto, at the boundary zone of the Catamarca and Salta provinces, 170 km southeast of the city of Salta. The project area comprises a collection of properties or concessions acquired under purchase options from the existing owner. The properties are held as "minas" (full mining licenses not subject to further area reduction requirements) by Mr. Jorge Moreno, a private borate producer focused on the exploration, exploitation and marketing of ulexite. The Project comprises six properties distributed over the Salar for a total of 3,237 hectares. All properties are subject to a mining license for borates. The area of the Property is not subject to any known environmental liabilities. Read this entire release and more news for NRG Metals at: https://www.financialnewsmedia.com/news-ngz/ Other recent developments in the mining industry include:S&P Global also reported that according to Sociedad Química y Minera de Chile S.A. (:NYSE: SQM), the demand for lithium chemicals increased around 27% year on year in 2018, reaching about 269,000 mt. "We expect applications related to energy storage to continue driving demand in the coming years," said the company. "We believe that full electric vehicle penetration rates reached 2% in 2018, and this number is expected to over double in the next five years," added the company, which currently has an installed capacity of 70,000 mt/year of lithium carbonate and 13,500 mt/year of lithium hydroxide.
SQM estimated that batteries currently account for 65% of total lithium demand, including batteries for electric vehicles, which account for about 36%.
Neo Lithium Corp. (TSX-V: NLC) (OTCQX: NTTHF) recently announces the submission of the Environmental Impact Assessment ("EIA") for its wholly-owned Tres Quebradas lithium brine project ("3Q Project") in Catamarca Province, Argentina. The EIA presented to Catamarca Environmental and Mining Authorities was prepared by GT Ingenieria SA (Argentina), a company specialized in environmental studies with deep experience in the mining and industrial sectors. The EIA included work with local professionals from University of Catamarca, Tucuman and Mendoza as well as the IHLLA Research center in Buenos Aires, specialized in Hydrogeology. The EIA includes a hydrological model that allows the authorities to understand the impact of exploitation in brine water table in the salar, and surrounding lithium brine lakes. The EIA was prepared following the lineaments of the pre-feasibility report announced on March 21, 2019, which outlined the production of 20,000 tonnes of lithium carbonate per year.
Freeport-McMoRan Inc. (NYSE: FCX) reported net income attributable to common stock of $31 million ($0.02 per share) in first-quarter 2019. After adjusting for net charges of $36 million ($0.03 per share), adjusted net income attributable to common stock totaled $67 million ($0.05 per share) in first-quarter 2019. Richard C. Adkerson, President and Chief Executive Officer, said, "During the first quarter, our global team maintained its focus on providing products necessary to support growing economies around the world in a cost-efficient, safe and environmentally responsible manner. Our transition to underground mining at Grasberg is advancing according to plan, and we are encouraged by recent milestones. In North America and South America, we are advancing the Lone Star copper leach project in eastern Arizona and continuing to focus on opportunities to enhance operating performance from existing mines.
Lithium Americas Corp. (TSX:LAC) (NYSE: LAC) earlier this month announced that it has entered into a definitive transaction agreement whereby Ganfeng Lithium Co., Ltd. (together with its subsidiary entities, "Ganfeng Lithium" or "GFL") has agreed to subscribe, through a wholly-owned subsidiary, for 141 million newly issued shares of Minera Exar S.A. ("Minera Exar"), the holding company for the Caucharí-Olaroz lithium brine project ("Caucharí-Olaroz" or the "Project"), for cash consideration of US$160 million (such transaction, the "Project Investment"). As a result of the Project Investment, Ganfeng Lithium will increase its interest in Caucharí-Olaroz from 37.5% to 50%, with Lithium Americas holding the remaining 50% interest (each subject to the rights of JEMSE (the Government of Jujuy) to acquire an approximate 8.5% interest in Minera Exar).
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