TPT January 2018

G LOBA L MARKE T P L AC E

accelerating to deliver the world’s next major mines to feed soaring demand from electric vehicle (EV) battery makers.” Citing data from the London-based CRU Group, Mr Stringer noted that almost 60 per cent of output from planned large projects over the next five years will be added in Australia, enabling the top supplier of lithium to cement its grip on the market. The biggest mines due to enter production this year are both about 75 miles from Port Hedland in the Pilbara region of the state of Western Australia. The town is the gateway to markets in China. (“Australia’s Got a Lock on Supply of the Metal Used for EV Batteries,” 25 October) What Mr Stringer calls “an emerging cluster of global production” around Port Hedland includes Pilbara Minerals Ltd, set to start lithium shipments from its Pilgangoora project in the second quarter; Altura Mining Ltd, reported to be starting production in the first quarter; and Mineral Resources Ltd, whose Wodgina mine accesses the biggest known hard rock lithium deposit anywhere. If projects and announced expansions advance as planned, the region “would be the largest [lithium] production centre in the world,” Pilbara CEO Ken Brinsden said in a Bloomberg interview in Port Hedland in late October. “In my mind, that could be the case by the early to mid-2020s.” A USTRALIA TO RETAIN ITS DOMINANCE While Mr Brinsden reported a recent rise in interest from consumers outside China, including from South Korea and Europe, all scouting for supply deals, unquestionably the intensive Port Hedland activity is being driven by rising Chinese demand for the lithium-ion batteries needed for electric vehicles and energy storage. Bloomberg ’s Mr Stringer reported that Perth-based Pilbara Minerals has attracted Chinese supply contracts and investments, including from Jiangxi Ganfeng Lithium Co and Great Wall Motor Co, China’s biggest maker of sport utility vehicles; while Jiangxi Special Electric Motor Co has agreed to invest in Australian developer Tawana Resources NL. According to Melbourne-based UBS Group analyst Lachlan Shaw, even with the wave of new supply, including the Australian input, the lithium market is likely to remain tight, with an even stronger outlook for future demand. “We have had increased supply [in 2017], and all the while lithium prices have kept going up,” Mr Shaw told Bloomberg . “The market is probably underestimating demand.” › Bloomberg New Energy Finance has forecast that, even as multiple new sources of supply emerge in the longer term, Australia will remain dominant in lithium. The nation is expected to account for about 37 per cent of global production in 2027, ahead of Argentina’s 18 per cent share. Meanwhile, the lithium mining companies around Port Hedland know a favourable location when they occupy one. Altura Mining Ltd, for one, may seek to enhance its present prospects by adding additional partners for a mine expansion. The company’s managing director, James Brown, said in an interview with Bloomberg , “The Pilbara does lend itself to becoming a hub, probably the size of which the world hasn’t seen.”

more environmentally-minded American administration in the future, the question they were asked on 23 October was: “When will the US ban sales of new cars with engines?” It was prompted, of course, by China’s statement that it would eventually ban sales of new vehicles with combustion engines. Similar bans have been announced by the UK, Norway, France and the Netherlands. But China is by far the world’s largest single source of new- vehicle sales. In 2016 roughly 30 million vehicles were sold there, close to double the US total of 17.5 million. The Chinese declaration of intent notified the global auto industry that it is facing a future very different from what it contemplated even a year before. Green Car Reports decided to canvass opinion on when the US might take a similar step. According to Mr Voelcker, the responses to its poll “did not indicate a great faith in the ability of the US to lead the world in reducing vehicular emissions of carbon dioxide.” Specifically: • More than a third of respondents (38 per cent) said such a ban would happen only in 2050 or later. • Almost another third, or 29 per cent, said that kind of ban would simply never happen. Ever. (Mr Voelcker noted that, taken together, two-thirds of the poll audience believes more than three decades at a minimum will have to pass for the US to take such an action.) • A quarter of respondents, 25 per cent, thought such a ban could happen by 2035. • A mere 8 per cent chose 2025 – the target year put forward by Norway and now only seven years away. (“When Will US Ban Sales of New Cars with Engines? Poll Results,” 31 October) › Green Car Reports did not make too much of the results of its “far from scientifically valid” Twitter poll. But its editor did comment that, driven by the pace of technological advances, “Change often comes more suddenly than people predict.” He pointed out that, given the annual 7 per cent reduction in the cost of lithium-ion battery cells, it is conceivable that, by 2035, 200-mile battery-electric cars will be cheaper than their counterparts with gasoline engines. Mining The demand for electric vehicles, and the batteries that power them, is creating an Australian hub for lithium production The reference in the previous item (“When Will the US Follow China ? ”) to the falling price of lithium-ion batteries points up an anomaly. Even with increasing supply, the already-tight global market for lithium is tightening, and the price of lithium has been going up. The more abundant supply is overwhelmingly attributable to Australia. As noted by David Stringer of Bloomberg News , “Ground zero in the global scramble for lithium is a small patch of northern Australia’s iron-ore rich outback, where work is

Dorothy Fabian, Features Editor (USA)

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JANUARY 2018