The US' battery and electric vehicle industries will face major lithium hydroxide supply shortfalls by the middle of the decade as the buildout of domestic battery-making capacity outpaces reliable raw material production growth in North America, Piedmont Lithium CEO Keith Phillips said March 30.
"If you look at [domestic] lithium hydroxide supply by 2025, you can see massive shortages, and we are not going to have nearly enough," Phillips said during an investor presentation at the NWR Near Term Producers Conference.
Phillips said domestic battery producers in the US will require over 500,000 mt/year of lithium hydroxide supply in the second half of the decade, based on the current slate of gigafactories that have been announced.
"That number will grow as more plants are announced," he added. "The US will remain reliant, unfortunately, on places like China, but anybody who can produce domestically will be exceedingly well positioned."
The US' domestic lithium hydroxide capacity will only reach an estimated 151,500 mt/year by 2025, according to Phillips. The country currently has about 15,000 mt/year of lithium hydroxide conversion capacity, but Piedmont could become the largest domestic producer with its plans to build 60,000 mt/year of capacity by 2030, he added.
"We are in conversations with potential strategic investors, and they are very excited about the scale of our business because 60,000 mt/year of hydroxide is a lot," he said. "It would be by far the biggest in the US, and if you are building a car plant or a battery plant in the US, having Piedmont as a supplier will become very important to those companies."
The Belmont, North Carolina-based company is developing two lithium hydroxide conversion plants and a spodumene concentrate mining operation in the US. The company also has partnerships to develop spodumene assets in Quebec and Ghana to supply its conversion capacity.
"We want to control the spodumene because we don't want to be exposed to the market like the Chinese convertors are," Phillips said.
Spodumene concentrate is a raw material feedstock for lithium hydroxide production.
Production timelines
Phillips said Piedmont could begin producing lithium hydroxide in the US by late 2024 or early 2025.
The prospective lithium producer has been developing its flagship Carolina Lithium asset near Bessemer City, North Carolina, where it will establish the US' first integrated spodumene concentrate and lithium hydroxide conversion operation.
However, Phillips said Piedmont's first lithium hydroxide output is expected to come from its recently announced second lithium hydroxide facility.
"With the second lithium hydroxide plant, we expect site selection hopefully by June and the [definitive feasibility study] by September, and then the permitting process should be quite quick," he added. "We think this should be funded and in construction by early next year and production by the end of 2024 or early 2025."
Phillips said the timeline for the second facility is much shorter than the timeline for Carolina Lithium, as the latter has a more complex permitting process due to the proposed spodumene mining operations that will occur at the site.
Changes expected for pricing norms
Phillips said the pricing structure of lithium contracts will likely change in the coming years as the industry matures with the EV market, with contract prices becoming more closely linked to spot prices.
"I expect increasingly that contracts signed by lithium majors will be rebased from a pricing perspective on a regular basis rather than annually," he said. "I think it'll be quarterly or even monthly with reference to spot indices. I think that's where the industry is going."
Unlike the approaches taken by competitors in recent years, Phillips said Piedmont does not intend to include price ceilings in long-term contracts but will "see how things go with each of our customers." - Platts -