Original Report: www.bbc.com(full story)
Australia, the world’s largest producer of lithium ore, has seen a significant drop in lithium prices due to falling electric vehicle sales and an oversupply of lithium ore. As a result, the main lithium compound’s cost has plummeted over 75% since June 2023, leading to mine shutdowns, such as Core Lithium’s suspension of operations at its Finniss site, which resulted in 150 job losses. Additionally, US firm Albemarle and Arcadium Lithium also announced cutbacks and mothballed operations due to the low prices. Despite the downturn, some companies are expanding their production, believing demand for lithium will eventually recover. Pilbara Minerals plans to increase lithium ore production by 50%, while Liontown Resources recently began production at its Kathleen Valley mine, which uses solar energy, reducing costs associated with diesel. Australia’s lithium extraction is more energy-intensive compared to countries like Chile and Argentina, where lithium is produced through brine evaporation. This energy-intensive process results in higher emissions. The lithium that Australia exports is primarily spodumene concentrate, which has also seen price declines. In an effort to capitalize on the price disparity between spodumene and refined lithium, Australian firms are building their own lithium refineries. The first commercial lithium hydroxide production began in 2022 at IGO’s Kwinana Refinery. Building refining capacity is viewed as a way to decrease dependence on Chinese dominance in the lithium market, although some analysts suggest that Australia should remain open to Chinese investment in this sector. Research is also ongoing to develop more environmentally friendly lithium refining processes to reduce chlorine gas emissions associated with traditional methods. Meanwhile, companies like Lithium Australia are working on recycling lithium from used batteries to bolster Australia’s battery manufacturing capabilities and ensure sustainability in the lithium supply chain.
