Hydroxide market@Deboss and as a follow up to the discussion...

Hydroxide market
@Deboss and as a follow up to the discussion about hydroxide above, certainly the forecasts are showing an increasing role of hydroxide in the market (which best comes from hard rock deposits as I stated above as well, especially around the area of needing low iron in the deposit). Thought you'd be interested in this graph from this link, albeit the question is whether the graph is understating that takeup but time will tell:

https://www.benchmarkminerals.com/lithium-supply-revisited/

GWh capacity
The following link is interesting, purely as we are starting to see a lot of forecasts talking about GWh battery capacity, and probably right now installed capacity is probably bigger than actual battery production (not surprising because you generally have a lump sum investment where you can't match your capacity incrementally to match demand growth). You can't install capacity in incremental lots to perfectly match demand. Of interest and detailed in the link below, and assuming the article is correct, at 190 GWh battery production capacity in 2018 China accounted for 2/3rds of the world's total capacity of 286 GWh at that time and is expected to maintain that share going forward.

Within that link - https://cleantechnica.com/2019/02/24/china-ev-forecast-50-ev-market-share-by-2025-part-3-ramping-production/ I thought I would simply highlight these statements, in part to also provide the conversion for getting from GWh to Lithium Carbonate Equivalent (LCE) demand and from there indicative spodumene equivalent demand (noting that you can't assume it will be all spodumene because obviously some of this will come from brine deposits).

The statements are in italics:

"China is charging full speed ahead into electric vehicles, on track to sell over 2 million electric vehicles this year, from 1.1 million in 2018."

"If, as of today, China is already planning to have 630 GWh of annual battery production capacity online by 2023, 800 GWh by 2025, and 1021 GWh by 2028, how much annual EV production capacity does that provide?"

"China’s 800 GWh of annual capacity in 2025 allows for an EV production volume of 15.9 million units, which is well above 50% of new auto sales. It also easily accommodates the EV production ramp that we looked at above. Even if the average battery size increases to 60 kWh, the 800 GWh by 2025 still translates to 13.3 million EVs (and ~50% of market share)."

The last statement mathematically is not difficult to show. The battery size in the initial 15.9 million unit estimates is 50kWh each. Without repeating the conversions in the first post in this thread essentially the following is occurring - I have done it in excel:




Components of lithium demand
Following on from this post in this thread, refer Post #: 37831794, the data we generally see for lithium demand is based on the passenger EV market. As the embedded post shows, EV applications related to trucks and buses and scooters and bikes don't seem to appear in the sales data - i.e the 2 million sales of EVs sold in 2018, often quoted in the literature, are passenger car based - for example. A lot of the data we see doesn't even look at other appliances and their needs which we use lithium for such as ipads etc.

When we talk batteries, which is essentially what most of the articles posted on this thread are about, we are essentially referring to chemical grade lithium.

The other lithium type, loosely defined, is what some call technical grade lithium, which is not often discussed in the literature. Technical Grade is used in greases, glass and ceramics for example. Ironically technical grade lithium has a lower iron content than chemical grade lithium and that means that technical grade can also be used in battery applications, but chemical grade lithium cannot be used in say the glass and ceramics industry because it has a slightly higher iron content for that application (only technical grade can be used in that market). My understanding is the biggest source of technical grade lithium is Greenbushes ) and I suspect AVZ can also supply this market as it is iron content in the lithium is pretty good). My understanding is the majority of the world's technical grade lithium comes from Greenbushes, but ironically AVZ has not really spoken too much about the technical grade market in the past. Prices paid for technical grade lithium are not that easy to find either.
http://www.talisonlithium.com/projects

I yabbered about technical grade lithium a while ago in this post as did some other posters as well a while back in that thread: Post #: 30120371

The interesting fact is that in 2015, non battery uses of lithium accounted for around 60% of demand. With the increase in EV's this share obviously will fall but is still predicted to be a sizeable area of demand going forward.

Whilst this is a January 2017 article, and the growth projections for chemical grade applications have been superseeded, the article itself is interesting because at least it seeks to show lithium demand forecasts in their entirety, rather than what we see been often associated with the EV passenger car vehicle market only.
http://www.mining.com/web/lithium-supply-demand-story/

??????? If there is a Cliff Note I wonder whether VB Scarpa on HC will be referenced LOL.

Finally, the interesting thing for me is the swag of battery capacity been installed which means too me the converters are expecting significant demand for EV's (and I suspect whilst many of the numbers quoted in the various articles posted on this thread are passenger vehicle based, also in other potential types of EVs like buses, trucks, scooters and bikes IMO etc etc). Refer here for reported GWh battery upgrades etc to 2025 to 2030:
https://www.visualcapitalist.com/battery-megafactory-forecast-1-twh-capacity-2028/

Obviously in terms of AVZ there is potential to enter the market but it depends on i.) demand growth, ii.) whether supply from exiting mines/brine deposits in production through expansions can meet that demand growth, and iii,) obviously if not there is scope for AVZ to enter the market between 2022 - 2025 as I posted previously in this thread at an initial 2mtpa ore feed capacity configuration before increasing production as more GWH capacity comes onstream etc etc.

Obviously growth in GWh battery capacity bodes well for existing players in production already, but provides opportunity for others to enter the market in time, and on this front whilst we, as holders here, all expect AVZ's mine to be in production in time, the question is will it be in production between 2022 and 2025. I think if AVZ get its act together they will be, but it does depend on the demand/supply imbalance (especially that imbalance in the hydroxide market). I think given the capacity installations at the GWH level there is scope for AVZ to enter the market in the required period IMO.

All IMO IMO