Lithium Shortfall May Emerge by 2015 on China Demand, Canada Lithium Says
Canada Lithium Corp. (CLQ), building a mine in Quebec, said demand may outstrip global supply by 2015 because China will need more electric-car batteries that contain the metal.
The Toronto-based company will profit from China’s goal of producing 1 million electric vehicles a year by 2015 to reduce carbon-dioxide emissions and gasoline imports, Canada Lithium Chief Executive Officer Peter Secker said. By 2020, the Asian country plans to build 5 million electric cars a year, which would require tripling current lithium production, Secker said.
“If you are a strong believer in the green economy and electric vehicles, then demand is going to exceed supply by 2015-2016,” Secker said today in a telephone interview. “It’s all very much focused on China.”
The cost of lithium, prized for use in batteries because it’s the lightest metal and able to hold more energy per unit of weight than other materials, has increased about 20 percent this year to about $6,000 a metric ton, a level last seen in 2008, Secker said. The price may increase more as demand rises and if the metal begins to be traded on a market, he said. Negotiated contracts set prices now.
Demand for lithium will increase for use in laptops and cell phones as well as for wind-energy and solar-power projects that may incorporate huge batteries to store electricity not immediately needed for the grid, he said.
Mines in South America produce about 55 percent of the world’s lithium supply, while Australia contributes about 35 percent, Secker said. A new mine in Australia is due this year, and one in Argentina by 2014-15, he said.
Construction is due to start at Canada Lithium’s project near Val d’Or, Quebec, in the third week of August, followed by major equipment deliveries by next June. Operations should begin by December 2012, Secker said. Production is to reach full capacity of 20,000 tons a year by 2014.
The company plans to raise $100 million in debt markets this year in addition to the $130 million it raised from shareholders in February, Secker said.
Secker said that while he wants to expand Canada Lithium, the company isn’t in talks about being acquired. In 2009, Mitsui & Co., a Tokyo-based trading house, said it would sell lithium from Canada Lithium to customers in Asia.
Canada Lithium fell 1 cent to settle at 61 cents as of 4:10 p.m. in Toronto Stock Exchange trading. The shares have declined 69 percent this year, giving the company a market value of C$154 million ($159.8 million).
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