Roskill Expects Flat Global Lithium Demand in 2009, Recovery From 2010

LONDON - The Economics of Lithium (11th Edition)
www.roskill.com/reports/lithium

- New Report From Roskill Analyses Worldwide Lithium Supply and Demand

Lithium consumption, driven primarily by the battery sector, experienced
growth of >8%py between 2003 and 2007. The lithium market is not, however,
immune to the global economic downturn and total consumption in 2008 was only
4% higher than the proceeding year. Total consumption in 2009 will probably
be similar to, if not lower than, 2008, with consumers both reducing
purchases and running down inventories.

Tightness in available brine production capacity in South America in the
mid-2000s, and problems with ramping-up production from brines in China,
prompted a rejuvenation of the conversion of lithium minerals to compounds.
Prices responded accordingly, with lithium carbonate rising from US$2,000/t
in 2004 to just under US$5,500/t in 2008, reflecting the higher costs
involved in the mineral conversion process and the raw materials required.

Global GDP and industrial production are expected to enter a recovery
phase in 2010/11. Roskill forecasts that demand for lithium will pick up in
2010 and quickly return to a strong growth trend. Current lithium producers
are well-placed to supply the world’s lithium needs for the period to 2013
and beyond. The major lithium brine producers in South America are planning
capacity expansions and the potential for increased production and improved
product quality from brine-based lithium producers in China cannot be ruled
out. Potential new producers of lithium compounds from minerals can expect
strong competition from lower cost brine sources of lithium and it is
possible that existing supply from lithium mineral conversion in China may
decline, particularly if prices come under pressure as growth in demand
stagnates.

Lithium demand to be driven by automotive battery uses

The recent large increases in lithium consumption have come both from
traditional and high-tech applications. The major industrial markets for
lithium - ceramics and glass, greases, aluminium and rubber - are widely used
in both construction and in the manufacture of consumer and industrial goods,
market segments that have benefited from high levels of industrialisation and
urbanisation in developing countries, particularly China. Growth in demand
for lithium in these end-uses will improve in line with GDP, which is
forecast to recover from 2010/2011. With the ongoing drive to reduce energy
demand and decrease CO2 emissions in basic industries, consumption of lithium
in ceramics, glass and aluminium could benefit from regulatory controls given
its use as an energy-saving additive.

Although tempered by current low oil prices and declining sales of
existing models, legislation to reduce CO2 and particulate emissions will see
demand for hybrid and electric vehicles increase in the early-2010s, aided by
fiscal stimulus packages. Most of the major automotive manufacturers are now
in the late stages of development and/or early production of lithium battery
powered hybrid and electric vehicles. Production of large, high-power,
lithium batteries used to power the latest generation of hybrid and electric
vehicles is forecast to increase markedly from 2010.

Demand for lithium in portable batteries for consumer goods such as
mobile phones and laptop computers is also expected to show strong growth in
demand over coming years, although growth will be considerably less than the
>20%py increase seen in the mid-2000s because of lower consumer confidence in
the current economic climate. Other areas of growth for lithium are in the
synthesis of pharmaceuticals and fine chemicals and, perhaps towards the
mid-2010s, from aluminium-lithium alloys for aerospace.

Lithium prices to come under pressure

In the early 2000s, the average export value for Chilean and Argentinean
lithium carbonate remained around US$2,000/t. That changed in 2005, when
prices for lithium carbonate began to increase sharply. Average export values
for lithium carbonate reported by major producing countries in 2008 were more
than double those seen in 2004. Prices for lithium hydroxide and lithium
minerals also increased over this period, however average values of lithium
chloride actually declined following the start of production in Chile.

The key characteristic of the lithium market in the mid-2000s has been
the resurgence of mineral conversion, a process which had been rendered
unprofitable in most instances following the emergence and dominance of brine
production of lithium in the late 1990s.

Roskill’s view is that the increase in lithium carbonate prices is due to
the higher cost of mineral conversion.

Stagnating demand in 2009 is likely to put downward pressure on lithium
carbonate prices and competition between producers could increase. The
producers of lithium from brines in South America will are likely to increase
their market share and any increased supply from brines in China, if the
quality of Chinese lithium carbonate produced from brines improves, could
provide additional competition in the market and put further downward
pressure on prices. Lower prices are likely to negatively impact the amount
of lithium carbonate produced by mineral conversion going forward, given the
higher costs involved.

Table of Contents

1 Summary 1

2 Lithium mineralogy, occurrence and reserves 7
2.1 Occurrence of lithium 7
2.1.1 Lithium minerals 7
2.1.2 Lithium clays (hectorite) 8
2.1.3 Lithium brines 9
2.2 Lithium reserves 10

3 Lithium mining, processing and grades 12
3.1 Extraction and processing of lithium brines 13
3.2 Mining and processing of lithium minerals 16
3.3 Production of lithium compounds from minerals 17
3.4 Lithium compounds and chemicals 19
3.5 Production costs 21

4 Production of lithium 22
4.1 Production of lithium by source 24
4.1.1 Production of lithium minerals 25
4.1.2 Production of lithium from brines 27
4.1.3 Production of lithium compounds from minerals 29
4.2 Production of downstream lithium chemicals 31
4.3 Outlook for the production of lithium to 2013 31
4.3.1 Outlook for the production of lithium from brines 31
4.3.2 Outlook for the production of lithium minerals 33
4.3.3 Outlook for the production of lithium compounds from 34
minerals
4.3.4 Forecast capacity for lithium production to 2013 35
4.3.5 Forecast production of lithium to 2013 36

5 Review of lithium producing countries 39
5.1 Afghanistan 39
5.2 Argentina 39
5.2.1 Minera del Altiplano SA 41
5.2.2 Sentient Group 43
5.2.3 Orocobre Ltd. 45
5.2.4 Other prospects for lithium production in Argentina 45
5.3 Australia 46
5.3.1 Talison Minerals Pty. Ltd. 47
5.3.1.1 Resources 48
5.3.1.2 Mining and production 48
5.3.1.3 Product specifications 49
5.3.2 Galaxy Resources Ltd. 50
5.3.3 Other prospects for lithium production in Australia 52
5.4 Austria 52
5.5 Belgium 52
5.5.1 Umicore 54
5.6 Bolivia 55
5.6.1 Salar de Uyuni 55
5.6.2 New World Resource Corp. 56
5.7 Brazil 56
5.7.1 Reserves of lithium in Brazil 57
5.7.2 Production of lithium in Brazil 57
5.7.2.1 Cia Brasileira do Litio (CBL) 58
5.7.2.2 Arqueana de Minerios e Metais Ltda 59
5.7.3 Potential producers of lithium in Brazil 59
5.7.3.1 Cia Industrial Fluminense 59
5.8 Canada 59
5.8.1 Resources of lithium in Canada 60
5.8.2 Trade in lithium to/from Canada 61
5.8.3 Producers of lithium in Canada 62
5.8.3.1 TANCO 62
5.8.3.2 Limtech Lithium Industries Inc. 63
5.8.3.3 ToxCo Canada 64
5.8.4 Potential producers of lithium in Canada 65
5.8.4.1 Avalon Rare Metals Inc. 65
5.8.4.2 Canada Lithium Corp. 67
5.8.4.3 GlobeStar Mining 68
5.8.4.4 Pacific Iron Ore Corp 69
5.8.4.5 Raymor Industries Inc 70
5.8.4.6 Other potential deposits 70
5.9 Chile 73
5.9.1 Reserves of lithium in Chile 74
5.9.2 Production of lithium in Chile 74
5.9.2.1 SQM 75
5.9.2.2 SCL 81
5.9.3 Exports of lithium from Chile 82
5.10 China 86
5.10.1 Reserves of lithium in China 86
5.10.1.1 Mineral reserves 86
5.10.1.2 Brine reserves 87
5.10.2 Production of lithium in China 88
5.10.2.1 Production of lithium minerals 88
5.10.2.2 Production of lithium from brines 90
5.10.2.3 Production of lithium compounds from minerals 91
5.10.2.4 Production of lithium metal 92
5.10.3 Trade in lithium to/from China 92
5.10.4 Producers of lithium minerals in China 95
5.10.4.1 Sichuan Ni&Co Guorun New Materials Co. Ltd. 95
5.10.4.2 Xinjiang Non-ferrous Metals (Group) Ltd. 95
5.10.4.3 Sichuan Jinchuan Lithium Minerals Co. Ltd. 96
5.10.4.4 Sichuan Province Mining Ltd. 96
5.10.4.5 Jiangxi Ningdu Taiyu Lithium Industry Co. Ltd 97
5.10.4.6 Dexin Mining Resources Ltd. 97
5.10.4.7 Other producers and traders of lithium minerals in China 98
5.10.5 Potential producers of lithium minerals in China 98
5.10.6 Producers of lithium from brine in China 99
5.10.6.1 Tibet Zabuye Lithium Industry High Technology Co. Ltd. 99
5.10.6.2 Qinghai CITIC Guoan Science and Technology Co. Ltd. 100
5.10.6.3 Qinghai Salt Lake Industry Group Co. Ltd. 101
5.10.7 Potential producers of lithium from brine in China 102
5.10.7.1 Qinghai Salt Lake Lanke Lithium Industry Co. Ltd 102
5.10.7.2 Sterling Group Ventures 102
5.10.8 Converters of lithium minerals in China 103
5.10.8.1 Sichuan Shehong Lithium Industry Co. Ltd. 103
5.10.8.2 Sichuan Ni&Co Guorun New Materials 104
5.10.8.3 Pan-Asia (Nantong) Lithium Co. Ltd. 104
5.10.8.4 Xinjiang Lithium Salt Plant (XLSP) 105
5.10.8.5 Aba Guangsheng Lithium Co. Ltd., 105
5.10.8.6 Jixiang Lithium Salt Plant 105
5.10.8.7 Xinyu Ganfeng Lithium Co. Ltd. 106
5.10.9 Producers of lithium chemicals in China 106
5.10.10 Producers of lithium materials for batteries 107
5.10.11 Producers of lithium bromide 109
5.10.12 Producers of lithium metal 110
5.11 Democratic Republic of Congo 110
5.12 Finland 111
5.12.1 Keliber Oy 111
5.13 France 112
5.14 Germany 113
5.14.1 Chemetall GmbH 113
5.15 Greece 115
5.16 India 115
5.17 Ireland 117
5.18 Israel 118
5.19 Japan 118
5.20 Kazakhstan 120
5.21 Mali 121
5.22 Morocco 121
5.23 Mozambique 121
5.24 Namibia 122
5.25 Netherlands 122
5.26 New Zealand 123
5.27 Portugal 123
5.28 Russia 125
5.28.1 Reserves of lithium in Russia 125
5.28.2 Production of lithium in Russia 127
5.28.2.1 JSC Krasnoyarsk Chemical Metallurgical Plant 128
5.28.2.2 JSC Novosibirsk Chemical Concentration Plant 130
5.28.3 Trade in lithium to/from Russia 130
5.29 Serbia 131
5.30 South Africa 132
5.31 South Korea 132
5.32 Spain 132
5.33 Taiwan 133
5.34 Tajikistan 134
5.35 Turkey 134
5.36 UK 134
5.37 Ukraine 135
5.38 USA 135
5.38.1 Trade in lithium to/from the USA 136
5.38.2 Producers of lithium in the USA 138
5.38.2.1 Chemetall Foote Corporation 138
5.38.2.2 FMC Lithium 139
5.38.2.3 SQM 140
5.38.2.4 ToxCo Inc 140
5.38.2.5 Tronox Inc. 141
5.38.2.6 Southern Clay Products 141
5.38.3 Potential producers of lithium in the USA 142
5.38.3.1 Canada Lithium Corp. 142
5.38.3.2 Simbol Mining 142
5.38.3.3 Western Lithium USA Corporation 142
5.39 Uzbekistan 143
5.40 Zimbabwe 143
5.40.1 Bikita Minerals (Pvt) Ltd 144

6 International trade in lithium 145
6.1 Trade in lithium carbonate 145
6.2 Trade in lithium chloride 149
6.3 Trade in lithium oxide and hydroxide 150

7 Consumption of lithium 155
7.1 Consumption of lithium by country 155
7.2 Consumption of lithium by end-use 156
7.3 Consumption of lithium by form 158
7.4 Outlook for consumption of lithium by end-use 161
7.5 Outlook for consumption of lithium by form 166

8 Use of lithium in glass and ceramics 167
8.1 Action of lithium in glass-ceramics 167
8.2 Action of lithium in glass 169
8.3 Action of lithium in ceramics 171
8.4 Production and consumption of glass-ceramics 172
8.4.1 Producers of heat-proof glass-ceramics 173
8.4.2 Producers of other glass-ceramics 173
8.4.3 Consumption of lithium in glass-ceramics 174
8.5 Production and consumption of glass 174
8.5.1 Container glass 177
8.5.2 Flat glass 179
8.5.3 Fibreglass 184
8.5.4 Speciality glass 186
8.5.5 Consumption of lithium in glass 188
8.6 Production and consumption of ceramics 188
8.6.1 Sanitaryware 189
8.6.2 Ceramic tiles 190
8.6.3 Tableware 193
8.6.4 Glazes and enamels 193
8.6.5 Consumption of lithium in ceramics 193
8.7 Consumption of lithium in ceramics, glass and 194
glass-ceramics
8.8 Outlook for consumption of lithium in glass and ceramics 196

9 Use of lithium in batteries 200
9.1 Types of batteries 200
9.2 Lithium primary batteries 200
9.2.1 Production of lithium primary batteries 205
9.2.2 Producers of lithium primary batteries 207
9.2.3 Trade in lithium primary batteries 208
9.2.4 Consumption of lithium primary batteries 209
9.2.5 Consumption of lithium in primary batteries 210
9.2.6 Outlook for consumption of lithium in primary batteries 212
9.3 Lithium secondary batteries 214
9.3.1 Lithium-ion batteries 215
9.3.1.1 Lithium-ion battery cathodes 216
9.3.1.2 Lithium-ion battery electrolytes 217
9.3.1.3 Lithium-ion battery anodes 218
9.3.2 Lithium metal polymer batteries 218
9.3.3 Lithium sulphur batteries 219
9.3.4 Production of lithium secondary batteries 219
9.3.5 Producers of lithium secondary batteries 221
9.3.5.1 Producers of lithium secondary battery materials 222
9.3.6 Demand for lithium secondary batteries 225
9.3.6.1 Demand for lithium secondary batteries for portable goods 226
9.3.6.2 Demand for lithium secondary batteries for transport 227
9.3.6.3 Demand for lithium secondary batteries for other 231
applications
9.3.7 Lithium content of lithium secondary batteries 231
9.3.8 Consumption of lithium in lithium secondary batteries 232
9.3.9 Outlook for consumption of lithium in lithium secondary 235
batteries

10 Use of lithium in lubricating grease 241
10.1 Types of lubricating grease 241
10.2 Production of lithium grease 243
10.3 Producers of lithium grease 246
10.4 Consumption of lithium greases 248
10.5 Consumption of lithium in greases 249
10.6 Outlook for consumption of lithium in greases 251

11 Use of lithium in aluminium smelting 253
11.1 Aluminium smelting 253
11.2 Production of aluminium 256
11.3 Consumption of aluminium 258
11.4 Outlook for aluminium production 260
11.5 Consumption of lithium in aluminium smelting 261
11.6 Outlook for consumption of lithium in aluminium smelting 263

12 Use of lithium in rubbers and thermoplastics 265
12.1 Types of rubbers and plastics 265
12.2 Production of synthetic rubber 267
12.3 Producers of synthetic rubber 269
12.4 Consumption of synthetic rubber 270
12.5 Consumption of lithium in rubbers and thermoplastics 274
12.6 Outlook for consumption of lithium in rubbers and 275
thermoplastics

13 Use of lithium in air treatment 279
13.1 Absorption chillers 279
13.1.1 Production of absorption chillers 280
13.1.2 Producers of adsorption chillers 282
13.1.3 Consumption of lithium in absorption chillers 284
13.2 Dehumidification 286
13.2.1 Production of desiccant dehumidification systems 287
13.2.2 Producers of desiccant dehumidification systems 288
13.2.3 Consumption of lithium in desiccant dehumidifiers 288
13.3 Air purification 288
13.5 Outlook for consumption of lithium in air treatment 289

14 Use of lithium in pharmaceuticals and fine chemicals 291
14.1 Pharmaceuticals 291
14.1.1 Producers of lithium-based pharmaceuticals 291
14.1.2 Production and consumption of lithium-based 292
pharmaceuticals
14.2 Fine chemicals 293
14.3 Consumption of lithium in pharmaceuticals and fine 294
chemicals
14.4 Outlook for consumption of lithium in pharmaceuticals and 296
fine chemicals

15 Use of lithium in continuous casting 297
15.1 Continuous casting mould fluxes 297
15.2 Consumption of lithium in mould powders 299
15.3 Outlook for consumption of lithium in mould powders 299

16 Minor end-uses for lithium 301
16.1 Aluminium-lithium alloys 301
16.1.1 Types of aluminium-lithium alloys 301
16.1.2 Production of aluminium-lithium alloys 303
16.1.3 Producers of aluminium-lithium alloys 303
16.1.4 Consumption of aluminium-lithium alloys 305
16.1.5 Consumption of lithium in aluminium-lithium alloys 307
16.1.6 Outlook for consumption of lithium in aluminium-lithium 308
alloys
16.2 Electronics 309
16.3 Construction 310
16.4 Water treatment and sanitisation 312
16.5 Nickel secondary batteries 313
16.6 Analytical agents 313
16.7 Dyestuffs 314
16.8 Metallurgy 314
16.9 Photographic industry 314
16.10 Welding fluxes 314
16.11 Other speciality lithium inorganics 315

17 Prices of lithium 317
17.1 Lithium mineral prices 317
17.2 Lithium carbonate prices 318
17.3 Lithium hydroxide prices 320
17.4 Lithium chloride prices 322
17.5 Prices of lithium chemicals and lithium metal 322
17.6 Outlook for lithium prices to 2013 323
17.6.1 Lithium minerals 323
17.6.2 Lithium compounds 323

The Economics of Lithium (11th Edition 2009) is available at GBP2400 /
US$5000 / EUR4000 from Roskill Information Services Ltd, 27a Leopold Road,
London SW19 7BB, England. E-mail: info@roskill.co.uk

Source: Roskill Information Services

The Economics of Lithium (11th Edition 2009) is available at GBP2400 / US$5000 / EUR4000 from Roskill Information Services Ltd, 27a Leopold Road, London SW19 7BB, England. Tel: +44-20-8944-0066 / Fax +44-20-8947-9568 / E-mail: info at roskill.co.uk