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Lithium price a ‘gold rush’ boon for Australia

  • Spodumene concentrate has risen 45.45% in a month to US$2,400 per tonne in January.
  • The price of battery-grade lithium carbonate grew sixfold over the past year to US$59,333 this week.
  • Western Australia is the world’s leading producer of spodumene and also hosts the largest hard-rock lithium mine.

Resources-rich Australia, and Western Australia in particular, is set for a massive windfall as surging electric vehicle (EV) sales send lithium prices soaring to record levels as global battery manufacturers stockpile the commodity.

London-based Benchmark Mineral Intelligence, which is a specialist information provider for the lithium-ion battery to EV supply chain, said spodumene concentrate had risen to US$2,400 per tonne in January, up from US$1,650/t in December.

The price of battery-grade lithium carbonate grew sixfold over the past 12 months from US$9,600/t at the start of last year to a whopping US$59,333 today (February 8), according to Trading Economics.

Last year alone, the prices for lithium carbonate, lithium hydroxide, and lithium salts, soared between 400% and 500% demand outstripped supply.

The China Association of Automobile Manufacturers forecasts EV sales to reach some 5 million in 2022, up from 3.4 million in 2021.

The world’s battery manufacturers are driving up prices as they enter panic buying mode on the back of labour shortages, mine closures, and general malaise caused by COVID-19.  

Nexport, which is Australia’s largest producer of zero emission buses, is accelerating expansion plans as it seeks capacity to produce 200 electric buses a year and 100 hydrogen vehicles that are specifically designed for ports and mines. At present, the company produces 75 vehicles. 

Western Australia, in particular, is in a prime position to reap the rewards. The state is the world’s leading producer of spodumene, with the pyroxene mineral generally containing about 6% lithium which most often is shipped offshore for processing, mainly to China. 

WA also hosts the Greenbushes lithium mine, which is an open-pit mining operation and the world’s largest hard-rock lithium mine.

As the world moves away from fossil fuels and petroleum-related products to a more sustainable green energy, the EV sector is only going to expand.

In order to meet demand, mining companies need to ramp up production and bring more operations online. ASX-listed lithium miners include, but are not limited to, AVZ Minerals (ASX:AVZ), Novonix (ASX:NVX), Pilbara Minerals (ASX:PLS), and Venus Metals Corporation (ASX:VMC).

It’s critical to mine these minerals to achieve a net zero emissions future.

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