Lithium hydroxide demand to increase: Tianqi Lithium

Demand for lithium hydroxide is likely to increase steadily in response to the growing use of lithium-ion ternary batteries that contain high amounts of nickel, major Chinese lithium producer Tianqi Lithium said.

The Chinese government in February changed its subsidy programme to promote the use of electric vehicles with longer ranges. This will raise demand for nickel-cobalt-manganese (NCM) lithium-ion ternary batteries and nickel-cobalt-aluminium oxide (NCA) ternary batteries, which typically have higher energy density.

Large automobile manufacturers outside China, including US firm Tesla and Germany's BMW and Volkswagen, are also planning to increase the use of NCM and NCA batteries, which use lithium hydroxide as the main feedstock. Lithium carbonate is used to make lithium iron phosphate batteries with lower energy density.

Tianqi Lithium aims to increase its total lithium output capacity to 100,000 t/yr in 2020 from around 35,000 t/yr at the end of 2017. It is scheduled to increase production of chemical grade lithium concentrate by 600,000 t/yr to around 1.15mn t/yr at its Talison Lithium operations in Australia in the second quarter of 2019.

Talison Lithium, which operates the Greenbushes lithium mine in Western Australia, is a joint venture between Tianqi Lithium and US-based firm Albermarle. Talison sells lithium concentrate to the two shareholders.

Tianqi Lithium shareholders have approved plans by the company to acquire the majority of shares in SQM, the largest South American producer of potash fertilizer, from Canada-based fertilizer producer Nutrien. Tianqi has filed an overseas investment request with China's top planning body the NDRC and is pushing ahead with securing other approvals.

The company is also expanding its business in solid state batteries. It paid $12.5mn in 2017 to acquire a 11.72pc stake in US manufacturer Solid Energy, which develops and produces ultra-thin lithium metal batteries, electrolyte and anode materials that are related to solid state batteries.

Prices of 99.5pc grade lithium carbonate fell to 108,000-113,000 yuan/t on 24 July, their lowest level since December 2016, from Yn113,000-118,000/t on 19 July because of a slowdown during the summer period. Prices of 56.5pc grade hydroxide were assessed stable at Yn136,000-141,000/t.