LME WEEK: Chile's CleanTech CEO sees 'healthy' lithium price recovery only by 2030

Chilean lithium developer CleanTech Lithium expects prices to recover above a "healthy" $20,000/metric ton only by 2030, placing its hopes on battery storage systems, which are emerging as a major new demand driver.

In a wide-ranging interview with Platts, part of S&P Global Energy, on the sidelines of LME Week, CleanTech CEO Ignacio Mehech said lithium prices may not reach the roughly $80,000/mt peak seen in 2022, but demand is expected to accelerate, driven by battery storage systems.

The Platts-assessed lithium carbonate prices CIF North Asia have plunged about 88% from multiyear highs seen in 2022 to $9,550/mt on Oct. 14.

"Sometime -- like this time next year, we should be seeing much higher prices," Mehech said. "By the end of the decade, we're going to be in a new balance of prices... at least a very healthy above [$20,000/mt] level."

While electric vehicle mobility will continue to dominate the lithium demand space, battery storage systems will still represent about 20% of the global lithium demand in the future, Mehech said.

This diversification of demand sources could help stabilize lithium markets, which have seen extreme price volatility over the past three years, he added.

Laguna Verde project

Speaking on the progress of CleanTech's flagship Laguna Verde project, Mehech said the company expects to secure a state contract for exploration rights in the first quarter of 2026.

Chile introduced a critical mineral strategy that separated lithium-bearing salt lakes into two categories: one would be state-controlled for national security, and the other would be for private exploration in a public-private model.

"So there will be no government involvement beyond the contract that we signed with the state. We don't believe that is going to change in the future," Mehech said, adding that once the contract is signed, CleanTech only needs to obtain environmental permits.

Chile is the world's second-largest holder of lithium resources after Australia, but currently, only a handful of companies extract lithium there. This makes CleanTech's Laguna Verde project a key milestone in the country's lithium exploration.

"We are finalizing a pre-feasibility study that will be published hopefully in January when we're admitted into this streamlined process with the state," the CEO said. [And] we've made a lot of efforts in the past few years to finally obtain and make sure that that will enable us to be the next [lithium producer in Chile]."

Current price levels

Lithium prices have risen since July this year due to several market factors in China, most notably CATL's temporary suspension of operations in Yichun.

However, the brief price uptick is not expected to affect Laguna Verde's unit economics.

Mehech said the company is looking at long-term pricing, and current price volatility only impacts the project's funding, not its economics.

"We are doing the economics with different prices, not $11 per kg. It's more on the $20 per kg [side], which we think is going to be the long-term pricing," he said.

Supplying markets

As lithium becomes a cornerstone mineral for securing critical supplies, countries like the US are seeking to reduce their dependence on Chinese lithium.

However, with China dominating global lithium processing capacity, lithium developers face the added challenge of navigating current trade and geopolitical conditions.

CleanTech said it remains agnostic on supplying lithium to countries.

Chile is highly open to trade, with free trade agreements with China, the EU, the US, South Korea and Japan, and it is currently negotiating a free trade agreement with India.

"So as a country, the company can choose to export in different directions," Mehech said.

CleanTech will be one of the few companies aiming to develop a lithium processing facility in Chile.

That way, "we will be able to export [battery-grade] lithium carbonate, [and] not just brine or the comparison of spodumene concentrate like the Australian companies do, [which] are forced to send their volumes to China [for processing]," he said.

No sustainability premium yet

The CEO said that although customers are increasingly demanding sustainable production practices, they have not yet shown a willingness to pay premiums for environmentally responsible lithium.

At Laguna Verde, the company plans to use a new technology called direct lithium extraction, which allows it to utilize renewable energy, reduce its carbon footprint and conserve water, he said.

"They are not willing to pay a premium," despite requesting sustainability metrics, Mehech said.