Lithium Industry: Outlook and Perspectives - www.signumbox.com Fidel Oteíza 1921, oficina 1001 - Providencia, SanDago, Chile ...
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Lithium Industry: Outlook and Perspectives info@signumbox.com www.signumbox.com Fidel Oteíza 1921, oficina 1001 – Providencia, SanDago, Chile 562-‐9460407 1
Lithium: A mineral that is in everyone’s life
• Lithium reserves are abundant and spread over the world
o Currently produced in countries with stable economies and governments
• Lithium is a green mineral:
o Production from brine is based on solar energy
o Lithium can be recycled from used batteries
• Lithium in energy storage/ batteries is strategic: without lithium, there is no battery.
o However the cost of lithium in a battery is negligible: it represents less than 3% of
the total cost. Hence, minimal risk of being replaced.
• Future perspectives are interesting: demand growing at 10%+ per year, with new
technologies and greener processes supporting this trend into the future.
2
Agenda • Demand growth drivers • Where can we find lithium? • Why is lithium unique? • Demand projections • Applications
Three demand growth drivers
#1: Oil Dependency
• Iraq is the largest source of oil supply growth (IEA 2012)
• Crude prices have remained high in historical terms
• Rising transportation demand and upstream costs reconfirm the end of cheap oil
• Big concern over security of supply à Urgent need for new sources of energy such
as electricity (hybrid and electric vehicles)
UAE
2% World Oil Production 2010
Nigeria
2%
Brazil Others
2% Iraq 15% Others
OPEC
2%
33%
Venezuela
2%
Mexico
3%
Russia
Canada Iran 10%
3% 3% US
7%
China Europe Saudi
4% 4% Arabia
8%
4
Source:
InternaDonal
Energy
Agency,
February
2012
Three demand growth drivers
#2: Global Warming
• Transportation is the sector with the highest final energy consumption rate and
contributes to about 23% of world CO2 emissions.
o China is the world’s largest energy consumer and is the world largest annual
emitter of energy-related CO2.
o International Energy Agency (IEA) estimates that cumulative CO2 emissions over
the next 25 years will increase long-term average temperature by 3.5°C.
World CO2 Emissions by Sector in 2009 World CO2 Emissions by Country in 2009
Others
10%
Residential
6%
China
24%
Electricity
and Heat Others
Industry 41% 49%
20% US
18%
Transport
23%
Japan India
4% 5%
5
Source:
InternaDonal
Energy
Agency,
2011
Worldwide emissions must be reduced.
Electrifying transportation is one of the main factors.
6
Source: International Energy Agency, World Energy Outlook 2011
Oil Dependency and Global Warming are driving demand for
new low-carbon fuels à electrifying transportation
❏ India has proposed tax exemptions for lithium-ion batteries used in electric-hybrid vehicles.
(Bloomberg, March 2011)
❏ China adopted a fuel economy target of 6.7 l/100 km for 2015, considering further
increasing to 4.5 l/100 km by 2025. (International Energy Agency, 2011)
❏ China will have 150 million electric bikes by 2015, compared with 120 million in 2010.
(Bloomberg, December 2011)
❏ Chinese government set an ambitious goal: by the end of 2011, the nation would be able to
produce at least 500,000 hybrid and/or electric buses a year. (New York Times, December
2011)
❏ President Obama Launched the EV-Everywhere Challenge Program in order to enable
companies in the United States to be the first in the world to
produce a 5-passenger affordable American electric
vehicle with a payback time of less than 5 years by 2022.
(US Department of Energy, March 2012)
7
Three demand growth drivers:
#3: Mobility and Consumerisation
• Mobility is a major new force in the world of consumer electronics
o Growing markets: smartphones, tablets, laptops, among others
• Gadgets are increasingly more affordable
• Population effect in emerging economies such as China, India and Brazil
• Almost 95% of the batteries used in electronic devices are based in lithium
q “Demand for consumer technology will continue to advance in 2012 with record
numbers of smartphones and tablets likely to be sold and demand from emerging
markets, including the Middle East.” (Deloitte, February 2012)
q “By 2020 and within the course of one decade, real consumption in China will have
doubled to $4.8 trillion and China will then be the world’s second-biggest consumer
market after the United States.” (Mc Kinsey&Company, October 2011)
8
Agenda • Demand growth drivers • Where can we find lithium? • Why is lithium unique? • Demand projec;ons
Lithium is abundant and spread all over the world- more than 180
million tones of Lithium Carbonate Equivalent (LCE) are found in
Hard Rock Minerals (Pegmatite) and Brine (Salt Flats) deposits.
Rusia
Larritta, Finland
Quebec, Canada
Manitoba, Canada
Alberta, Canada
Ontario, Canada Karalpa, Austria
Nevada, US Serbia
California, US North Carolina, US
Texas, US Tibet, China
Sichuan Province, China
Baja California, Mexico
Manono, Zaire
States of Minas Gerais and Ceará, Brazil
Symbology Salar de Uyuni, Bolivia Salta, Argentina
Catamarca, Argentina Zimbabwe
Pegmatite
Salar de Atacama, Chile Western/South Australia
Continental Brine
Jujuy, Argentina
Geothermal Brine
Oilfield Brine
Jadarites
LCE: Lithium Carbonate Equivalent 10
*As of December 2011The majority of lithium reserves are found and produced
in countries with stable economies and governments.
• Even though 65% of lithium reserves concentrate in Bolivia and Chile’s continental
brines, lithium is also abundant and economically viable in hard rock minerals.
o Australia, which only has hard rock deposits, has become the second largest
producer of lithium after Chile.
• Largest lithium resources are contained in seawater but at low concentrations.
Lithium Reserves by Country
Lithium Supply by Country 2001
Australia Others
US Others
3% 5% 5%
Argentina China 3%
6% 10%
US Bolivia Chile
8% 34% 38%
Argentina
13%
China
13%
Chile Australia
31% 31%
Source: signumBOX estimates, January 2012
11Agenda • Demand growth drivers • Where can we find lithium? • Why is lithium unique? • Demand projec;ons
Lithium: A metal with unique characteristics
• Has the highest specific heat capacity among solids
• Has a high electrochemical potential
• Has a low atomic mass
• Has a low density
Widely used in heat-resistant glass and ceramics, aluminum
alloys and lubricating greases, and energy storage / batteries.
13Due to the unique combination of several favorable
properties, lithium is used in various applications:
Lithium in Glass and Ceramics: Lithium favors the melting process because it decreases
viscosity, thermal expansion and the melting point of glasses and ceramics.
Lithium in Batteries: Primary (non rechargeable) and secondary (rechargeable)
• Almost 95% of the batteries used in electronic devices are based in lithium
• Electrifying transportation: hybrid and electric vehicles, electric bicycles, electric
scooters, among others
• New uses as grid storage energy
Lithium Consumption by Application (2011) Lithium Consumption in Batteries (2011)
Polymers Grid storage
Aluminum Hybrid and
3% 1%
4% Electric
Continuos bikes/
Casting Medical Others
scooters
Powders 3% 9%
10%
5% Battteries
29% Hybrid and
Air Electric cars
conditioning 9%
Portable
4% Portable
Frits devices
devices non
16% rechargeable
Glass rechargeable
Lubricating 72%
13% 8%
greases
14%
14
Source: signumBOX estimates, January 2012Since Sony introduced the first lithium-ion cell at the beginning
of the 1990’s, manufacture of lithium ion batteries in Japan has
increased at rates above 30% per year (on average).
Manufacture of Rechargeable Batteries in Japan (Th. units)
2500000
2000000
Small sealed-type
1500000 batteries
Lead acid
Others
Other alkaline
1000000
Nickel Metal Hydride
Lithium ion
500000
0
1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011
Source: Battery Association of Japan 15Agenda
• Demand
growth
drivers
• Where
can
we
find
lithium?
• Why
is
lithium
unique?
• Demand
projec;ons
16Batteries for portable devices: A promising future
Laptops:
Mobile Phones: -Lithium Content in the battery: 30 – 40 grams LCE
-Lithium Content in the battery: 1 – 3 grams LCE -Total lithium consumption 2011: 14,000 tones LCE
-Total lithium consumption 2011: 4,300 tones LCE -Total lithium consumption 2025: 44,000 tones LCE
-Total lithium consumption 2025: 9,800 tones LCE -CAGR 2011 – 2025: 8.5%
-CAGR 2011 – 2025: 6.1%
Tablets:
-Lithium Content in the battery: 20 – 30 grams LCE
-Total lithium consumption 2011: 1,200 tones LCE
-Total lithium consumption 2025: 17,000 tones LCE
Smartphones:
-Lithium Content in the battery: 2 – 3 grams LCE -CAGR 2011 – 2025: 20.8%
-Total lithium consumption 2011: 1,700 tones LCE
-Total lithium consumption 2025: 9,600 tones LCE
-CAGR 2011 – 2025: 13.2%
Powertools:
-Lithium Content in the battery: 40 – 60 grams LCE
-Total lithium consumption 2011: 1,100 tones LCE
-Total lithium consumption 2025: 8,000 tones LCE
-CAGR 2011 – 2025: 15.2%
LCE: Lithium Carbonate Equivalent
CAGR: Compound Annual Growth Rate
17
Source: signumBOX estimates, January 2012Batteries for hybrid and electric vehicles:
Driving the future
• In hybrid electric vehicles the amount of lithium varies between 0.8 to 2 Kg
• In plug-in electric vehicles the amount of lithium ranges between 1 to 10 Kg
• In pure electric vehicles the amount of lithium varies from 8 Kg to 40 Kg
Toyota Prius Plug-in Hybrid: 3.6 Kg LCE Mitsubishi i-MiEV: 10 Kg LCE
Tesla Roadster: 40 Kg LCE
LCE: Lithium Carbonate Equivalent
Source: signumBOX estimates, January 2012
18Batteries and other applications will drive lithium demand
growth to 10%+ per year for the next 13 years
Lithium Demand Forecast 2011 – 2025 (tones LCE)
600,000 Application / Tones LCE 2011 2025 CAGR 2011 - 2025
Batteries for portable devices 30,416 111,176 9.7%
Batteries for grid 500 7,500 21.3%
Batteries for hybrid and electric
500,000 6,967 204,901 27.3%
vehicles
Other lithium applications 91,400 174,994 4.7%
Total Lithium Demand 129,282 498,571 10.1%
400,000
Other lithium applications
Batteries for hybrid and electric vehicles
300,000 Batteries for grid
Batteries for portable devices
200,000
100,000
0
2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025
LCE: Lithium Carbonate Equivalent The above graph’s predictions of demand growth should not be considered reflective of the
CAGR: Compound Annual Growth Rate Fund, which is subject to significant fluctuation and may lose value. 19
Source: signumBOX estimates, January 2012.The upward trend in prices is expected to
continue into the future…..
20Lithium Industry: Outlook and Perspectives Neither the fund nor SEI were involved in the preparation of the presentation and they have not adopted the article as their own material. info@signumbox.com www.signumbox.com Fidel Oteíza 1921, oficina 1001 – Providencia, Santiago, Chile 562-9460407
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