Lithium: Supply, Demand, Applications, Price, Outlook

Global Geoscience Limited (ASX:GSC) Chairman James D Calaway addresses the most popular questions about the lithium market: Is there enough lithium, the outlook for electric storage and electric propulsion, where supply is going to come from and where the price is headed. Speaking with The Capital Network’s Lelde Smits.

Lelde Smits: Hello, I'm Lelde Smits for the Capital Network and joining me from Global Geoscience Limited (ASX:GSC) is its Chairman, James D Calaway. James, welcome.  

James Calaway: Great to be with you.  

Lelde Smits: We are always asked about the top questions in the lithium market. First up, is there enough of lithium in the world? 

James Calaway: I think there is enough lithium in the world. In fact, I know there is. The real question is, "At what cost? At what price do people need to pay in order to stimulate the supply?” And, I feel confident that the industry will ultimately respond. There may be shortages that come up on a short-term basis but as the price reflects the need for supply, we'll get a balance and I think the world will have enough lithium. 

Lelde Smits: What is your outlook for electric storage and electric propulsion? 

James Calaway: I am much more optimistic about the growth rate for electric cars. These lithium batteries are uniquely positioned when you start talking about mobile applications. It's light and it's very high density so it works much better.

When you get into mass storage I think that there will be important applications, but I think it'll be a longer-term process. But the explosion in investment in electric propulsion is really staggering.

The public policy that is developing around the world to support it is also remarkable. And so, I think that everyone that's involved is having to increase their projections of demand coming from this and we're certainly seeing a scramble around the world by people involved in battery making for the automobile industry, seeking out secure and affordable supply. 

Lelde Smits: So James, an explosion of demand. Where is all the supply going to come from? 

James Calaway: Part of it will come from the continued development of the brine resources like my old company Orocobre Limited (ASX:ORE) is going to be doubling production. There will be some increase at Atacama and there will be a few others but I think that you're certainly going to have to have a lot of coming from spodumene conversion – we're certainly seeing that and there's a number of projects coming on stream. 

But, there is an issue about conversion capacity and I think it's definitely going to be at a much higher price. And then of course there are going to be the things like Rhyolite Ridge which is the big surprise in my opinion in the industry.

You have sedimentary deposits that are special that will allow us to expand. But I think that the big thing is going to be expansion of the brines. Some new developments, we're going to have a lot of spodumene production that's going to have to come on stream. And then projects like Rhyolite Ridge are going to be the things that drive the supply.  

Lelde Smits: Final question James, the question that everyone really wants to know, where is the price headed? Can you put a number on it?  

James Calaway:  I think that it’s going to be variable depending upon the balance but in a general direction, there's no question, it's up. And, I think that's going to be for a foreseeable time and it just has to do with how long it takes to really respond to demand, and demand is growing so rapidly now that I think you are going to be seeing stuff indefinitely north of ten thousand dollars and you could see spikes considerably higher than that, per tonne.  

Lelde Smits: Certainly exciting times for lithium developers, producers and investors. Thank you for your insights today. 

James Calaway: Thank you very much for having me. 




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