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April 2018

Growth in lithium demand

I have received quite a bit of feedback and interest in my column on lithium (March 2016 issue, p. 34) in which I gave rough estimates for the cost of lithium production from brines and spodumene ore. One of the main conclusions was that production from hard rock, spodumene, which is widely distributed in the pegmatite rocks of Western Australia, is energy intensive and would require a low-cost energy supply of either coal or gas.

The growth in demand for lithium for batteries has continued apace and is seeing year-on-year growth of 12% or more for lithium carbonate. The growth in lithium demand is in step with the growth in electric vehicles sales. With more vehicle manufacturers introducing new electric vehicles or hybrids over the past two years and outlining plans for major expansions in the coming years, growth in lithium demand could become even higher. If (and it still somewhat a big ‘if’) electric vehicle penetration is 4.5% of the new vehicle fleet, then lithium carbonate demand may approach 200 000 t/year by 2020. Furthermore, issues with supply have seen the price of lithium carbonate escalate above US$10 000 per tonne with similar price escalation for intermediates such as spodumene ore.

In response to this demand, there have been several developments of note. Several Australian-based companies have mined or are about to start mining and exporting spodumene ore in WA and one is well on the way to producing lithium from a brine lake in Argentina.

Through a facility at Greenbush in WA, Talison Lithium is the largest producer of hard rock lithium, which is exported as the beta-form through the Port of Bunbury. The US company Albermarle is in the process of building a lithium hydroxide plant near Bunbury with a capacity of 20 000 t/year. Another company (Altura Mining) has published the results of a feasibility study for the mining of alpha-spodumene and concentrating the raw ore to a 6% lithium content. The company has embarked on developing a project to export upgraded alpha-spodumene. This would avoid the energy requirements in converting the alpha-spodumene to the beta-form from which lithium can be readily extracted. Another company (Neometals) has stated its intention to upgrade alpha-spodumene to the beta form and then to produce lithium hydroxide in a processing plant in WA.

Unfortunately for the smaller players, although the short term seems rosy, the long-term future of lithium supply would seem to be in the hands of owners of Tier 1 lithium resources.

Rio Tinto is continuing its development of the large jadarite deposit in Serbia. Jadarite is a lithium borosilicate discovered in 2004 in the Jadar basin near the town of Loznica in Serbia. Having already had $90 million spent on it, the project is in the prefeasibility phase with the aim to bring the mine and upgrading facilities on-stream in 2023. The size of the resource is very large with resources of 2.5 Mt Li2O and 21 Mt B2O3. The technology for extracting lithium has been developed by Rio Tinto’s laboratory at Bundoora in Melbourne. If this development goes to completion, Rio Tinto could supply up to 10% of expected world lithium demand by the mid 2020s.

The largest producer of lithium is SQM (Sociedad Quimica y Minera de Chile S.A.), who has announced that it has settled a long-running royalty dispute with the government of Chile that will allow it to increase production from about 63 000 t/year of lithium carbonate to over 163 000 t/year in 2024. SQM is said to be in talks with Tesla to lock in supplies of the battery material.

SQM’s principal business is supplying chemical supplements to the agricultural industry – sodium nitrate, potassium and sulfates – and in recent years it has rapidly developed lithium production from brines.

SQM was founded in 1968 to reorganise the Chilean nitrate industry. It was at one time nationalised but since 1983 has been privatised. SQM produces a range of products from caliche ore (which contains sodium nitrate and iodine) and lithium, potassium and borates from brine lakes in the Atacama desert of Chile.

Lithium is produced from brines of the Salar de Atacama, a brine lake formed by natural leaching of the Andes mountains. The large BHP/Rio Tinto Escondida copper mine lies to the south. The brines are pumped from beneath the saline crust in two different areas. One area produces boric acid and the other area produces high levels of potassium and lithium (the lithium concentration is said to be 2700 ppm), and with low magnesium content extraction costs are low. The high concentration of lithium in the Chilean lake is said to produce lithium cheaper than the larger salt lake Salar de Uyuni in Bolivia, which is thought to contain more than 50% of the world’s lithium resources.

After extraction, the brines are evaporated in ponds with an evaporation index of 3.2 metres, and with precipitation of only 15 mm/year this leads to very efficient salt recovery. This is in contrast to brines in colder parts of the continent that have much lower evaporation rates.

The caliche ore contains the only known nitrate and iodine deposits in the world. The ore is covered by a small amount of overburden (0.4–2.5 metres), which is removed by an excavator. The ore body is then broken with explosives and the broken rock is crushed and leached to produce sodium and potassium nitrate and sodium iodide.

The caliche ore beds were first exploited in the 1830s and rapidly replaced older methods for making nitrate for gunpowder by the controlled oxidation of mainly horse urine. Carlyle (History of the French Revolution) tells a story that it was common for the citizens of Paris to dispose of their waste in the house cellars; over the years, the waste became oxidised to produce nitrate in sufficient quantities that the revolutionaries of the 1790s dug up the cellar spoil to extract sodium nitrate to produce gunpowder independently of the royalist arsenals.

In the approach to World War I, Germany realised, that in the event of war, they could be denied access to the Chile saltpetre (as it was widely known) by a British blockade, and strenuous efforts were made by German scientists to produce synthetic ammonia. The main discoveries were made by Fritz Haber, who was awarded the Nobel Prize in 1918. This successfully led to the Bosch–Haber process for producing synthetic ammonia, which in modified and improved forms is still used today to produce first ammonia, which is then oxidised to nitric acid for explosives manufacture.

The invention of the synthetic ammonia process led to the demise of the Chilean saltpetre industry. There was some demand for the sodium nitrate for fertiliser, which maintained the industry in Chile in the early decades of the 20th century.

Because current battery technology uses various cobalt compounds as one of the electrodes, and because cobalt is scarce, in recent years there has been a large increase in the value of cobalt and cobalt ores. In fact, the scarcity of cobalt may force a reconsideration of the current approach to battery manufacture. 

Duncan Seddon FRACI CChem is a consultant to coal, oil, gas and chemicals industries specialising in adding value to natural resources.

If this development goes to completion, Rio Tinto could supply up to 10% of expected world lithium demand by the mid 2020s.
The high concentration of lithium in the Chilean lake is said to produce lithium cheaper than the larger salt lake Salar de Uyuni in Bolivia, which is thought to contain more than 50% of the world’s lithium resources.

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