Reuters reported that Talison Lithium is set to double production capacity in 2012 as the lithium producer sees demand for the metal outpacing supply over the next few years.
The tight supply has already boosted the price of lithium carbonate, though Talison which sells lithium concentrate into China where it is converted to a carbonate will not see the impact of higher prices until the end of the year when current sales contracts are renegotiated.
Mr Peter Oliver CEO of Talison said that "Clearly we'll be encouraging higher prices. The Toronto listed company which owns the Greenbushes mine in Australia is in the process of doubling production to the equivalent of 110,000 tonnes a year of lithium carbonate. We feel very comfortable that the demand is there to support that growth. The USD 70 million expansions is fully funded.”
Mr Oliver said that driving the market is rising demand for lithium batteries used in a wide range of electronic devices with electric and hybrid autos seen playing a bigger role after 2015. Lithium demand in 2011 is about 150,000 tonnes a year. The company expects that to grow to between 350,000 and 500,000 tonnes annually by 2020. Talison also plans to build a lithium carbonate conversion plant by 2015 which will be fueled by some of the additional production at Greenbushes.
He said that Talison will be able to broaden its industrial customer base and to get more value for its lithium products. There is an improved margin, but it also gives us access to markets outside China. There's big demand from places like Japan and Korea. The 20,000 tonne per year plant will costs around USD 150 million to build and can be expanded to meet higher market demand.
He added that though it would be cheaper to build abroad, the plant will be built in Australia, likely on the Greenbushes site about 250 kilometer south of Perth where the company is based. I think one of the key things is security of supply so the lowest of risk to security of supply would be to build it in Australia.
(Sourced from Reuters)
