Lithium is a key component in a range of innovative industries due to its high energy storage, insulating and heat resistant capabilities.
The increased application of rechargeable lithium-ion batteries, particularly within the automotive industry, is expected to drive demand significantly in the coming years providing an excellent platform for Bacanora’s growth. The global lithium-ion battery market was estimated at $17.5bn in 2013 and this market size is anticipated to quadruple to $70 billion by 2020.
SignumBox (Chile) has provided the Company with their detailed 20 year analysis of the global lithium market, summarised as follows:
- By 2037, SignumBox anticipate global demand for lithium chemicals to reach about 1,700,000 tonnes of LCE in their base scenario, compared to the current 190,000 tonnes in 2017, equating to an average annual growth rate of about 11.5% over the next 20 years.
- SignumBox estimates that the battery segment of the market will continue to grow strongly and by 2037 it would represent 84% of total lithium demand, compared to the current 35% in 2017.
- When considering various pricing scenarios, SignumBox estimates that the lithium carbonate (battery grade) long term price (2030) would range between US$13,700/t to US$20,600/t.
The Company’s lithium pilot plant in Hermosillo continues to produce high quality battery grade lithium carbonate samples for distribution to potential customers in Asia. In April 2017, the Company signed a long term lithium off-take with the Hanwa Co., Ltd. of Japan up to 100% of the Stage 1 lithium carbonate production from Sonora. In addition, Hanwa became a cornerstone 10% shareholder in Bacanora via a private placement at the then current share price of 82.5 pence per share on 2 May 2017.