Global lithium demand 'to double' by 2024, driven by EVs
The annual production of electric vehicles (EVs) is set to grow from 3.4 million in 2020 to 12.7 million in 2024, while battery production is predicted to grow from 95.3GWh to 410.5GWh in the same period, a GlobalData report forecasts.
Correspondingly, demand for lithium is expected to rise from a forecasted 47.3kt in 2020 to 117.4kt in 2024, at a CAGR. Global demand for lithium will be driven by growth in manufacturing facilities, particularly in China – where lithium-ion battery manufacturing capacity is expected to increase from an estimated 388.2GWh in 2020 to 575.3GWh in 2024, the report states.
“Lithium metal production is expected to reach 134.7kt versus 58.8kt in 2020. This follows a significant 18.2% decline in 2019 to 78.2kt, resulting from sluggish global EV sales and a steep fall in prices, which, in turn, encouraged reduced production levels," says Vinneth Bajaj, Senior Mining Analyst at GlobalData.
“Lithium production over the next four years will be mainly supported by output from existing Australian mines such as Mount Cattlin and Pilgangoora. Other major mines include Mount Marion, Salar de Atacama and Salar del Hombre Muerto located in Australia, Chile and Argentina, respectively.”
Bajaj adds that nearly 12.7 million EVs are expected to be produced globally in 2024, driven by China, which is determined to boost EV sales.
China is targeting a 20 percent share of new car sales by 2025, versus just 5 percent in 2019. The country’s decision to cut subsidies in a phased manner until 2022, rather than eliminating it in 2020, is expected to provide an essential boost to the domestic market, as well as the overall global EV market, he says.
Telsa is working towards achieving 100GWh of cell production capacity by 2022 (Model Y pictured), and up to 3,000GWh by 2030. This is a far greater figure than any other manufacturer, including China’s BYD, which is expected to expand its capacity to 126GWh in 2024, versus just 40GWh in 2019.
Japan’s Panasonic, a key supplier to Telsa, expects to increase its capacity from 40GWh in 2019, to 63GWh by 2021, while LG Chem will expand from 65.2GWh in 2019 to 172.4GWh in 2024, the report adds.
“Tesla has also announced a revolutionary 4680 cell design, the production of which has already begun with 10GWh of annual capacity expected through 2021. It is expected to completely change the cost dynamics of EVs by reducing the overall cost of its long range and high-performance battery cells,” concludes Bajaj.
Barrick profit beats expectations as copper, gold prices up
Barrick Gold has reported a 78% jump in first-quarter profit, beating analyst expectations thanks to rising gold and copper prices, and said it was on track to meet annual forecasts.
Production in the second half is expected to be higher than the first, the gold miner said, thanks in part to the ramp-up of underground mining at the Bulyanhulu mine in Tanzania and higher expected grades at Lumwana in Zambia, reports Reuters
Barrick’s first-quarter gold production fell to 1.10 million from 1.25 million ounces due partly to lower grades at its Pueblo Viejo mine in Dominican Republic.
Adjusted profit surged 78% to $507mn in the quarter ended March 31, from $285mn a year earlier, and Barrick announced a 9 cent per share quarterly dividend.
Stronger prices helped boost Barrick’s revenue from its copper mines in Chile, Saudi Arabia and Zambia by 31% from the fourth quarter. Overall earnings per share were $0.29, ahead of analysts’ estimate of $0.27.
“We expect a positive stock reaction to the earnings beat and strong cash flow,” said Credit Suisse analysts.
Potential for South Africa merger
Barrick CEO Mark Bristow, who has championed mergers across the gold industry, said he backed the idea of South Africa-listed miners Goldfields and AngloGold Ashanti combining.
Speculation has been swirling around the two companies and Sibanye-Stillwater, whose CEO Neal Froneman floated the idea of a three-way merger.
“I’m a South African, and this country has such a great mining history and it would be great to see a real gold business come out of the many failed discussions that we’ve seen,” said Bristow.
Goldfields declined to comment. In a statement, AngloGold Ashanti said it was focused on delivering on its growth plan to unlock value from its portfolio of gold assets.
Bristow also said he had met with the Democratic Republic of Congo’s new mines minister and other officials and was continuing to work on getting $900mn belonging to its Kibali mine joint venture out of the country.
“We have a solution, it just needs to be sanctioned by the appropriate authorities which haven’t been around for a while,” he said, referring to a recent government overhaul by President Felix Tshisekedi.