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Battery storage, EV demand may prompt more US lithium mines

Houston — Growing demand for storage and electric vehicle batteries is prompting companies to consider opening lithium mines in Nevada and elsewhere in the US that could increase lithium production in the US over the next several years by multiples of two to three, according to observers. Currently, there is just one lithium mine operating in the US, the Silver Peak facility in Nevada owned by Albemarle, which has a production capacity of 5,500 st/year.

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A mine in Nevada that could come online by 2022 is being developed by Lithium Americas and could have annual production capacity of 10,000 st/year.

Meanwhile, Blue Eagle Lithium is analyzing data from a property near Tonopah, Nevada, the Railroad Valley project, that it has said shares geological similarities with Albemarle's Silver Peak site. 46% of 2017 mine production went to batteries

According to the US Department of Interior's US Geological Survey, lithium production from seven countries, not including the US, totaled 43,000 st in 2017, an increase of 13% over 2016 levels. According to the USGS' commodity report, the increase in lithium production came "in response to increased demand for battery application."

About 46% of the global-end use of lithium was for batteries, the rest for ceramics and glass, lubricating greases, polymer productions and other products, the USGS said. That report also said that US imports of lithium in 2017 were 3,430 st, with 49% coming from Chile and 48% from Argentina.

Albermarle says its Silver Peak mine production of lithium carbonate is shipped from its Nevada mine to Kings Mountain, North Carolina, where it is converted to lithium hydroxide. From there, the company says, it is sold to Asian companies, who use it to produce cathodes, which are used to manufacture batteries and battery packs.

Analysts note that even as Tesla and Panasonic are making batteries and battery packs at the Gigafactory in Storey County in Nevada, the lithium used for those batteries still has to go to Asia for cathode production.

Available conversion capacity is also an issue central to the worldwide lithium supply equation. China's Tianqi Lithium is expected to have its 48,000 st/year Kwinana spodumene converter in Australia online by mid-2019, which is expected to ease capacity constraints.

A $93.1 billion battery market by 2025: report On Tuesday, San Francisco-based Grandview Research released a report saying the global lithium-ion battery market is projected to reach $93.1 billion by 2025, representing a 17% compounded annual growth rate.

"The rapid growth of the market is attributable to the increased usage of lithium-ion batteries in consumer electronics, grid storage systems and the rise of electric vehicles," the report said.

"The push by automotive original equipment manufacturers and battery manufacturers to continually reduce battery pack costs continues," the report quotes William Tokash, senior research analyst with Navigant Research, as saying. "This effort, led by improving battery manufacturing processes and maturing supply chains, is anticipated to yield a market driven by battery electric vehicles, where both large and small capacity Lithium-ion battery-pack-equipped vehicles have markedly improved driving ranges."

The USGS report said the security of the US' lithium supply "has become a top priority for technology companies in the US and Asia."

It noted, for example, that brine mining operations were under development in Argentina, Bolivia, Chile, China and the US, while spodumene mining operations were under development in Australia, Austria, Canada, China, Finland, Mali, Portugal, and Spain. 'Money to be made'

In addition to the Nevada facilities that Lithium Americas and Blue Eagle are developing, a number of smaller development firms are also looking at projects.

Standard Lithium, a so-called junior lithium mining company based in Vancouver, Canada, has been working to develop a project in the Smackover Formation in Arkansas.

Robert Mintak, CEO of Standard, said last week in an interview that projects will come online "and there will likely be a glut" of lithium.

Mintak noted that roughly a decade ago the price of lithium was roughly $6,000/mt, but has climbed to the current price of $12,000/mt to $16,000/mt.

"Even if the price fell to $10,000/mt, there is still money to be made," Mintak said. --Jeffrey Ryser, jeffrey.ryser@spglobal.com

--Edited by Matt Eversman, matthew.eversman@spglobal.com