latest-news-headlines Market Intelligence /marketintelligence/en/news-insights/latest-news-headlines/lithium-majors-to-ramp-up-m-a-as-they-hedge-bets-on-developing-demand-52692154 content
Log in to other products

Login to Market Intelligence Platform

 /


Looking for more?

Contact Us

Request a Demo

You're one step closer to unlocking our suite of comprehensive and robust tools.

Fill out the form so we can connect you to the right person.

If your company has a current subscription with S&P Global Market Intelligence, you can register as a new user for access to the platform(s) covered by your license at Market Intelligence platform or S&P Capital IQ.

  • First Name*
  • Last Name*
  • Business Email *
  • Phone *
  • Company Name *
  • City *
  • We generated a verification code for you

  • Enter verification Code here*

* Required

Thank you for your interest in S&P Global Market Intelligence! We noticed you've identified yourself as a student. Through existing partnerships with academic institutions around the globe, it's likely you already have access to our resources. Please contact your professors, library, or administrative staff to receive your student login.

At this time we are unable to offer free trials or product demonstrations directly to students. If you discover that our solutions are not available to you, we encourage you to advocate at your university for a best-in-class learning experience that will help you long after you've completed your degree. We apologize for any inconvenience this may cause.

In This List

Lithium majors to ramp up M&A as they hedge bets on developing demand

Essential Metals & Mining Insights July 2020

COVID-19 Mining Impacts — Mining Projects With At-Risk Production

Mining Insights Newsletter June 2020

A Decade of Underperformance for Gold Discoveries


Lithium majors to ramp up M&A as they hedge bets on developing demand

Confusion around the future makeup of the global battery supply chain to meet electric vehicle demand and lithium producers' desire for diversification of the resource will prompt companies to seek further acquisitions, experts said.

Speaking at the Australasian Institute of Mining and Metallurgy's Lithium 2019 conference in Perth, Australia, Minerals Research Institute of Western Australia CEO Nicole Roocke said July 3 that uncertainty in the supply chain for critical raw materials is present across several fronts.

These include how many, when and which type of critical raw materials will be needed, when and to what extent will mass deployment of electric vehicles emerge, and how the technologies impacting the type and quantity of critical raw materials needed per vehicle are evolving.

Mining and geological advisory MinEx Consulting strategist John Sykes said on the conference sidelines that with such uncertainty, and the close cost comparison between Latin American brines and West Australian hard-rock projects, lithium majors are hedging their bets by investing in both.

This is being seen in Albemarle Corp. building a hydroxide plant associated with the Greenbushes mine in Western Australia while also having hydroxide operations at Salar de Atacama in Chile, which Sykes said is the American company "giving themselves flexibility in the supply chain to see how things work out."

Sociedad Quimica y Minera de Chile SA also produces hydroxide in its Salar del Carmen plant in Chile from lithium carbonate that is also produced there. The company is also in a joint venture with Kidman Resources Ltd. in Mount Holland, a 100% lithium hydroxide operation based on hard-rock spodumene in Western Australia.

Sykes said batteries rapidly moving from historically being a small part of lithium demand to a large chunk seems to be driving a preference for lithium hydroxide over carbonate raw material. But that contention was challenged by an expert during a July 2 pre-conference workshop.

Majors are also losing market share with more producers springing up, particularly in Western Australia, so "instead of making one big company bet and potentially losing out, they'll make lots of bets and one of them will pay off," Sykes said.

"The next stages of M&A will be more about taking out the winners, once it emerges who the winners are," Sykes said, though he cautioned that those winners would not necessarily mean all the small companies that go into production, but those that have been proven to be commercially viable.

Pilbara Minerals Ltd. CEO Ken Brinsden had told another lithium conference in Perth in 2019 that the unlikelihood of there being another substantial lithium deposit in Western Australia, in particular, could prompt majors to consider more acquisition activity.

Independent Canadian consultant Don Hains said in an interview on the conference sidelines that lithium majors' rising investment in Western Australia was not so much driven by supply chain uncertainty but by diversification of resource given regulatory and political issues in Latin America.

Hains cited Chile's system, where state agency CORFO owns the resource and imposes an "absolute limit" on the total production, and said that while those permits are likely to get extended, increasing production is difficult due to "severe limitations" on water supply in the Atacama Basin.