INTERVIEW: Dobra’s lithium most suited for EU despite US involvement

The future lithium supply from Ukraine's Dobra project is best suited for the European market despite US company involvement, because the EU will be less self-sufficient for battery precursors compared to North America by the time it starts production, according to Thomas Chandler, principal lithium supply analyst at UK-based consultancy SFA (Oxford).

Chandler does not expect any major investment in Dobra before the Russia-Ukraine war ends, meaning commercial production will not start before the mid-2030s.

The Ukrainian government said Jan. 12 that it had selected Dobra Lithium Holdings, a joint venture including TechMet, a critical minerals-focused investment firm that is part-owned by the US government, and US financial services company Rock Holdings, to develop the Dobra lithium deposit in Kirovohrad region, central Ukraine.

"I would not expect the project to advance to construction with the war ongoing, despite it not being that close to the front line," Chandler told Platts, part of S&P Global Energy, in an interview.

"There may be some further exploration in the meantime to confirm or improve the accuracy of the resource estimate," he said, pointing to junior miner UkrLithiumMining, which completed a prefeasibility study for its Polokhivske project, in the same region as Dobra, in February 2024.

"So local lithium projects advance despite the war, but the cost to reach this stage is relatively small compared to the total investment required," Chandler said.

Production 10 years away

The Dobra project must start from scratch, so even if the war ended immediately and permitting were fast-tracked, the analyst believes its commercial production is at least 10 years away.

"This is how long it takes to develop a mine, even with some historical exploration done already, without any pauses in development caused by low price periods or environmental issues, for example," he said.

At this stage, it is too early to say whether Dobra will produce lithium carbonate or lithium hydroxide, or only spodumene concentrate. That decision will depend on capital requirements, the destination market, and the region's cathode-chemistry preferences, according to Chandler.

The $179 million investment figure provided by Ukraine's prime minister is quite low, and so suggests spodumene concentrate production only, which would likely be converted into lithium hydroxide at one of the various lithium refineries planned in Europe by the mid-2030s, Chandler estimated.

"Most European projects are planning to produce lithium hydroxide as European battery and car manufacturers plan to produce and use nickel, manganese, and cobalt-based lithium-ion batteries, which require lithium hydroxide as a precursor," Chandler said.

He added that if the Dobra JV decides to produce lithium hydroxide or even carbonate in Ukraine, this will increase capital requirements substantially.

Most logical market

Given the successful development of a European battery supply chain, the analyst views the EU as the most logical target market for the Dobra project, despite US company involvement, because in 10 years' time, North America, and the US in particular, will be more self-reliant.

There is likely to be much more lithium production in the US and Canada compared to Europe, but similar demand from the EV industry of approximately 450,000 mt of lithium carbon equivalent (LCE) is forecast for each region in 2035, according to Chandler.

"For example, the Thacker Pass lithium project in Nevada, which is already under construction, has a larger contained lithium resource than all of the European projects combined, and there are many other deposits of significant scale in the US alone," he said.

"Only if there is not sufficient lithium refining or cathode active material production capacity in Europe, or the US, by the mid-2030s, Dobra's owners may be forced to look elsewhere, including China," said Chandler.

Small but high-grade

Envisaging Dobra's production volume, which is very difficult given the limited information available, the analyst recalled that the closest European lithium project, in terms of resource size and grade, is planning to produce 26,000 mt/year of LCE over a 14-year period, covering roughly 6% of the estimated European EV demand in 2035.

Commenting on Dobra's resource, preliminarily estimated at 1.26 million mt of LCE, he noted it is very small on a global scale and not particularly large by European standards, equating to about 3% of Europe's current lithium resources.

"However, it is believed to be of quite high grade compared to most European projects, which may help minimize operating costs and increase competitiveness," said Chandler.