Galaxy Resources Ltd., aiming to be the world’s fourth-biggest lithium carbonate producer, said demand for the metal used in batteries may gain 18 percent this year as consumption rebounds after the global economic crisis.
Global demand may rise to about 100,000 metric tons this year, from 85,000 tons last year, Iggy Tan, managing director of the Perth-based company, said in an interview at Bloomberg’s Melbourne bureau.
Lithium demand is being driven by President Barack Obama’s bid to push automakers into building more fuel-efficient cars and get 1 million plug-in hybrid-electric vehicles on U.S. roads by 2015. Prices may gain 10 percent by 2015 as Chinese demand increases, Tan said.
“The world is changing, Obama is driving his green policies and China is driving its green policies,” Tan said in an interview yesterday.
Galaxy shares rose 12 percent to A$1.36 at the 4:10 p.m. Sydney time close on the Australian stock exchange.
Lithium carbonate is used in batteries, electric vehicles, mobile phones, computers, ceramics and pharmaceuticals.
The company said yesterday it signed sales accords with 13 unnamed Chinese lithium cathode producers for the balance of its planned 17,000 tons output of lithium carbonate. It signed an accord in February with Mitubishi Corp. for 30 percent.
Galaxy is spending A$145 million ($135 million) to build a mine at Mt. Cattlin in Western Australia and the processing plant in the Zhangjiagang Free Trade Zone in Jiangsu province. The mine is scheduled to start in August and the plant in China in December, Tan said.
The price of lithium carbonate, privately agreed by sellers and buyers, may reach $6,757 a ton in 2015, from $6,120 now, Tan said. Demand may increase three-fold to 300,000 tons in the next decade, he said. Chinese demand is about 20,000 to 25,000 tons a year, he said.
To contact the reporter on this story: Rebecca Keenan in Melbourne at email@example.com