INTERVIEW: LevertonHELM partners with UK companies to expand domestic lithium supply chain

UK-based lithium chemicals producer LevertonHELM believes partnerships with other local companies are an important step to develop closed-loop lithium production in Europe, the CEO, Stephan Schnabel, said in a recent interview with Platts, part of S&P Global Commodity Insights.

LevertonHELM has a long tradition of relying on lithium feedstock from South American brine sources. With the lithium carbonate equivalent cash cost of $7,000-$8,000/mt, the brine supply is the cheapest way to secure the necessary feedstock for LevertonHELM's growing production, said Stephen Wallis, Vice President for Energy Materials.

The lithium brine sources are also attractive due to their relatively low carbon dioxide footprint. However, with the producer's recent expansion of lithium conversion capacity and the European Critical Raw Materials Act proposing minimal levels of domestic and recycled sources in the lithium value chain, LevertonHELM sees the need to diversify its feedstock.

The chemicals company officially opened a new lithium chloride production facility at its site in Basingstoke, UK on April 16. The new plant converts technical-grade lithium carbonate into a lithium chloride solution, which is used in desiccant and dehumidification applications, as well as in battery electrolyte solutions.

Partnerships

Partnering with other companies on the technology side or the supply and customer side "is what is one of our key competencies," according to Schnabel. "We are not always insisting on having the majority [share] and being the lead. We are also happy to be in the back seat. The concept that together we can do much more than alone, and contribute our capabilities to others, has been one of the key elements why the company has grown over the years," he added.

LevertonHELM also sees an opportunity to work together with projects to develop Direct Lithium Extraction [DLE] technologies. Last year, the company signed a memorandum of understanding with UK-based Cornish Lithium to produce battery-grade lithium chemicals using DLE in Cornwall. The company also saw interest from other junior DLE projects which need significant amounts of lithium chloride to be used in the DLE columns before the brine can be extracted.

LevertonHELM is also evaluating partnerships to process lithium sulfate into battery-grade lithium hydroxide used in the electrolyte in lithium-ion batteries.

In its efforts to use more recycled feedstock, LevertonHELM is exploring recycled lithium carbonate and lithium sulfate, the CEO continued. Earlier this year, the company partnered up with UK-based clean technology company Altilium to use lithium carbonate recovered from spent EV batteries and production scrap from Altilium's battery recycling technology center in Devon, UK.

The high cost of developing black mass processing capacity means that the current low-price environment and the lack of premiums for recycled material needs to change. "It's not a sustainable price if we want to develop [lithium recycling in Europe]", said Wallis.

Sustained demand for lithium hydroxide despite LFP growth in Europe

LevertonHELM believes lower production costs allow the lithium-iron-phosphate (LFP) battery chemistry to dominate the low-cost segment of the global electric vehicles market.

China dominates the market in terms of LFP battery production and has been increasingly investing in the LFP battery supply chain in Europe and Morocco. As a result, the share of LFP batteries in EVs produced in Europe is expected to increase where most of the investment and focus has been on nickel-manganese-cobalt (NMC) batteries.

Schnabel said that the views of European OEMs on LFP have evolved over the last three years. Since LFP batteries rely on lithium carbonate and certain NMC batteries require lithium hydroxide, this should eventually lead to slower than initially expected growth in lithium hydroxide demand. However, Wallis countered, "Based on our customers in Europe, it is very clear there is definitely space for [lithium] hydroxide."

Lithium market expected to remain bearish until 2027

"We don't see a relief this year, so there's no indication of what single sign could trigger a recovery in pricing," according to Schnabel.

Platts daily battery grade lithium carbonate and hydroxide assessments were both $8,700/mt CIF Europe on May 9, stable day over day and down over 40% year over year.

Referring to the 2022 price spike when lithium prices soared close to $80,000/mt, Wallis said these price levels were unsustainable and LevertonHELM did not make any business decisions based on these elevated price levels.

"On the other hand, the current pricing is also not sustainable due to insufficient or even negative margins for converters", Wallis said, adding that new hard rock or recycled lithium projects cannot develop with the cash cost at around $15,000/mt LCE.

Platts assessed spodumene concentrate with 6% lithium oxide content at $680/mt FOB Australia May 9, down $20/mt from May 8 and down $470/mt from May 9, 2024. Platts recycled lithium carbonate assessment was $8,100/mt CIF N Asia on May 9, stable on the day and down $3,900/mt since the assessment launch on June 24, 2024.

Schnabel said that when it comes to contract discussions after 2025-26, the buyer-seller strength balance is shifting. "The picture looks really different from 2027-28, when the current oversupply in lithium should ease," the CEO added.