Falling Prices Do Not Halt Investments in Lithium Projects
Despite a significant drop in global lithium prices over the past two years, investment in lithium development projects continues in various regions. For instance, in October 2023, US car manufacturer General Motors announced plans to invest $625 million in the Thacker Pass project, a joint venture with Lithium Americas. Following this, Sayona Mining and Piedmont Lithium agreed to a $625 million merger to consolidate their lithium assets.
In November, Rio Tinto committed up to $2.5 billion to the Rincon project in Argentina, aiming to produce 60,000 tonnes of battery-grade lithium carbonate annually. Additionally, the company previously acquired Arcadium Lithium, further solidifying its position in the lithium market.
These substantial investments, despite low lithium prices, reflect expectations of a future deficit. The International Energy Agency estimates that the global lithium shortfall could exceed 150,000 tonnes by 2030. This projection might even understate the reality, given the rising demand for lithium driven by hybrid vehicle production. US electric car manufacturer Tesla’s newly launched lithium plant, capable of producing batteries with a combined capacity of 50 GWh, highlights the ongoing demand surge.
EVelution Energy to Loosen China's Grip on Cobalt
US-based EVelution Energy has received a letter of interest from the Export-Import Bank of the United States for a $200 million loan. If finalized, the funds will support the construction of a cobalt plant in Arizona, powered by its own solar energy facility. The plant, slated for completion by 2027, will have the capacity to produce 7,000 tonnes of cobalt annually and create over 3,000 jobs.
In April 2024, EVelution Energy secured a supply agreement with Glencore and plans to hedge cobalt prices. The new facility will meet 40% of domestic cobalt demand in the US, a significant improvement for a country that mined only 500 tonnes of cobalt in ore and produced 2,100 tonnes of secondary metal in 2023. Currently, the majority of cobalt processing is concentrated in China, which sources its raw materials from the Democratic Republic of Congo. EVelution’s project is a critical step toward reducing US reliance on imports.
NATO Raises Concerns About Critical Metals
NATO has identified 12 materials critical to the defense industry, including aluminium, beryllium, cobalt, gallium, germanium, graphite, lithium, manganese, platinum, rare earth elements, titanium, and tungsten. These materials are essential for producing advanced military equipment, and supply disruptions could impact NATO’s technological edge.
The list forms part of a roadmap approved by NATO defense ministers in June 2024 to safeguard supply chains. For instance, tungsten is vital for artillery shell cores and gyroscope rotors, while cobalt is indispensable for rocket and submarine engine superalloys. Aluminium plays a key role in the construction of military aircraft and missile hulls.
NATO members are heavily reliant on imports, particularly from China, which produced 240,000 tonnes of rare earth metals and 63,000 tonnes of tungsten in 2023. Europe, in contrast, produced only 5,000 tonnes of tungsten and no rare earth metals. While measures to boost domestic production are expected, NATO’s dependence on Chinese imports is unlikely to change drastically within the next five years.
Cuba Strives to Maintain Nickel Production
The Cuban government is working to stabilize nickel production despite challenges, including an energy crisis, US sanctions, and weak global nickel prices. Cuba operates two major laterite nickel ore mines. The Ernesto Che Guevara mine, a state-owned facility, produces up to 30,000 tonnes of nickel concentrate annually. The Pedro Sotto Alba mine, jointly operated by the Cuban government and Canada’s Sherritt International, plans to produce 32,000 tonnes of nickel concentrate this year, with raw materials processed in Canada.
Cuba’s nickel reserves are estimated at 5-6 million tonnes, making the country attractive to Chinese investors. In 2005, China Minmetals considered investing $600 million in a nickel mining and processing facility. Given Cuba’s pressing economic needs and geopolitical tensions between China and the US, Chinese companies may increase their activities in Cuba’s nickel sector in the coming years.
China to Boost Copper Raw Material Imports by Year-End
China’s imports of copper ores and concentrates grew by 2.14% to 25.654 million tonnes in January-November 2024. However, November imports fell by 2.98% from October and were 8.1% lower than in November 2023, due to smelter shutdowns for maintenance. These facilities, with a combined capacity of over 2.3 million tonnes of copper, have since resumed operations, and December imports are forecast to rise by 4.7% to 2.35 million tonnes. Overall, annual imports are expected to increase by 1.5% to 28 million tonnes.
China’s copper cathode production reached 10.964 million tonnes in January-November 2024, a 5% year-on-year increase. Total production for the year is expected to exceed 12 million tonnes. While China’s copper consumption is forecast to grow at an annual rate of 1.1% in the coming years, competition with cheaper aluminium could curb demand growth by 2030.
