Global Lithium Market Poised for Rebound Amid Growing Demand and Strategic Developments
Despite the current oversupply in the global lithium market, signs of a potential rebound are emerging. Industry analysts, including Statista and Fastmarkets, forecast a significant growth in global lithium demand, with Fastmarkets predicting a 30% increase in supply for 2024 and a near 500% surge in US lithium demand by 2030. This optimistic outlook is reflected in the strategic moves by major lithium miners, such as Lithium South Development Corporation (TSXV:LIS) (OTC:LISMF), Sociedad Química y Minera de Chile S.A. (SQM) (NYSE:SQM), Piedmont Lithium Inc. (NASDAQ:PLL), Lithium Americas Corp. (NYSE:LAC) (TSX:LAC), and Rio Tinto Group (NYSE:RIO).
Lithium South Development Corporation has recently bolstered its development strategy with a new Preliminary Economic Assessment (PEA) for a 15,600 tonnes per year lithium carbonate plant. The PEA showcases a robust financial model, projecting a Net Present Value (NPV) of US$938 million and an impressive Internal Rate of Return (IRR) of 31.6%, with a rapid 2.5-year payback period. Adrian F.C. Hobkirk, President and CEO, highlighted the robust economics and potential for expansion as key drivers for the company's future.
The company also expanded its production well drill program at the Alba Sabrina claim block, enhancing operational capacity with a new 80-kilowatt pump and completing a long-term pump test to better understand the capacity potential of this area of the salar.
In collaboration with POSCO, Lithium South is moving forward with a cooperative development agreement on the HMN Li Project, marking significant progress towards production. An updated NI 43-101 technical report released late in 2023 indicated a substantial 175% increase in lithium resources, reinforcing the project's viability.
SQM, another major player in the lithium market, remains optimistic about stable lithium prices despite the current supply glut. CEO Ricardo Ramos anticipates a robust year of growth in 2024, driven by increased electric vehicle sales and demand for battery materials, although he acknowledges that excess capacity could continue to pressure market prices.
