INTERVIEW: AMG Lithium CEO hails 'huge step forward' after inauguration of German refinery

The launch of AMG’s Lithium’s lithium hydroxide refinery in Germany represents a huge step forward for the company and for Europe’s lithium supply chains, CEO Stefan Scherer told S&P Global Commodity Insights in a recent interview.

Speaking shortly after the opening ceremony of the company’s new facility in Bitterfeld-Wolfen on Sept. 18, Scherer said AMG Lithium’s achievement in becoming Europe’s first commercial-scale producer of battery-grade lithium hydroxide was hugely significant for parent company AMG Critical Minerals, as well as the wider European battery industry.

According to Scherer, the refinery marks a huge milestone for the company as it now has “a real value chain for battery grade lithium” that potential offtake partners are able to experience first hand.

”This facility and the fact that we are producing material means that every stakeholder in the battery industry who is in Europe or who wants to come to Europe talks to us first,” he said, adding that the opening of the plant has generated huge interest from a variety of market participants, including suppliers, traders, and OEMs.

AMG Lithium commissioned the first of five modules planned at the site, with a capacity of 20,000 metric tons per year, enough to supply batteries for around 500,000 electric vehicles.

Scherer said that lead times for lithium hydroxide produced at the plant would be no more than two days for its offtake partners, well below the length of time required to source material from China, which Scherer estimated at around two months.

Without disclosing names, Scherer said the company was speaking to a range of potential customers regarding future offtake agreements. In July 2022, the company said it had agreed to supply at least 5,000 t/y of lithium hydroxide to South Korean cathode materials producer EcoPro BM to supply its cathode materials plant at Debrecen, Hungary.

With the first module already sold out, the company plans to increase production to 100,000 t/y with all five modules by 2030, depending on market conditions.

Scherer said the company is already working on implementing these expansions but would refrain from doing so until it had the necessary feedstock arrangements in place.

“We would need to develop or purchase a project that can provide feedstock to support the next module, he said, adding that the company utilized equity financing to establish the first module of its lithium hydroxide refinery in order to secure “first mover” status in Europe.

In addition to the refinery in Bitterfeld-Wolfen, AMG Critical Minerals has acquired several European and Brazilian lithium assets under its various subsidiaries.

The plant will be initially supplied with spodumene concentrate supplied by AMG Brazil’s wholly owned Mibra Mine in Minas Gerais state. AMG Brazil is currently expanding production capacity at its lithium concentrate plant in Brazil from 90,000 t/y to 130,000 t/y.

AMG Brazil has also signed an agreement with Grupo Lagoa to develop a second lithium concentrate product facility capable of processing 80,000 t/y of pegmatite to produce commercial grade spodumene concentrate.

In June, AMG Lithium said it had acquired 15.77% equity share in Savannah Resources, owner of the Barroso lithium project in northeast Portugal which is set to becomes one of Europe’s leading producers of lithium spodumene concentrate.

AMG Lithium also owns a 25% stake in Zinnwald Lithium, which is aiming to produce 16,000-18,000 t/y of battery-grade 99.5% lithium hydroxide during an initial phase 1 production at its mining and processing site in Germany .

Scherer said the company's interests in Europe and Brazil spanning the length of the lithium value chain had afforded it a large degree of flexibility in terms of both feedstock and final product based on market conditions.

In addition to spodumene concentrate, Scherer said that AMG Lithium was heavily engaged with Europe’s battery recyclers and has already qualified recycled lithium samples at its laboratory in Frankfurt.

The disassembly and shredding of EV batteries into black mass, from which critical metals including lithium, nickel, cobalt and manganese can be extracted, has become increasingly important as a means of both supplementing virgin material supply and reducing the overall carbon footprint in the battery supply chain.

On the subject of the EU Critical Raw Materials Act, Scherer said that while he welcomes the ambition, there was still too much uncertainty around how it will be implemented.

Having entered into force on May 23, the CRMA requires that EU capacities along the strategic raw material supply chain source at least 10% of mined material from the EU, process at least 40% of that locally and be made 25% from recycled material.

“For us, there are still too many question marks around how these targets will be reached,” Scherer said, noting that financing a serious issue for Europe’s aspiring critical minerals projects.

Lithium hydroxide prices have fallen to new multiyear lows in recent months as ongoing demand headwinds and a persistent market surplus underpinned by ongoing project ramp-ups continue to weigh on the market.

Platts, part of Commodity Insights, assessed battery grade lithium hydroxide at $10,000/t CIF Europe on Sept. 20, down 37% since the start of 2024.

Scherer said current market prices were unsustainable, adding that the supply increases were being driven primarily by production ramp-ups at established projects rather than new mining and processing facilities.

“Relying on existing projects is not the same as bringing a new mine into production” he said, adding that the current price levels are having a significant negative impact on the long-term supply outlook.