Although Australia and Chile together produce more than three-quarters of the world’s lithium content, the market is dominated by American and Chinese companies.
Lithium is seen as a strategically important mineral due to its role as the main component of rechargeable batteries used in electric vehicles. Lithium concentrate is mainly produced from two sources: concentrated brines from underground lakes; and minerals, namely spodumene. The United States and China both have ample lithium resources but together hold less than 5% of proven, economically viable deposits.
Albemarle, from the U.S., and Tianqi Lithium, from China, have become the two largest lithium producers by going where the viable deposits are. Tianqi, in particular, has been increasing its share of output through a combination of joint ventures and acquisitions abroad.
For various reasons, calculating the attributable production of each lithium miner is a difficult task. Companies listed only in mainland China are not held to the same reporting standards as their peers. The output of all the major miners overlaps with each other in one way or another through joint ventures. And lithium production from brine and mineral deposits is reported differently.
This article looks at the top three miners by lithium carbonate equivalent as reported by SQM, the world’s third-largest producer, in its 2018 annual report. It gives an estimated share of total global production, which stood at around 260,000 tons LCE in 2018 and has been forecast to rise to around 300,000 tons LCE in 2019.
Top Three Lithium Miners by Share of Output
1. Albemarle (NYSE: ALB), US, 28%
Albemarle, (NYSE:ALB, Market Cap: $7.45b), headquartered in Charlotte, NC, is a vertically integrated specialty chemicals company with positions in lithium, bromine, and refining catalysts. It produces lithium brine through solar evaporation of ponds at two locations: at the Salar de Atacama salt flat in northern Chile; and at Silver Peak in Nevada, the only producing lithium mine in North America.
Additionally, Albemarle owns 49% of Talison Lithium in Australia, the largest producer of lithium concentrate in the world. Tianqi Lithium owns the remaining 51% of the joint venture. Talison sells some of its production on the open market, but most of it is converted into basic lithium chemicals by Albemarle and Tianqi.
Albemarle’s attributable lithium production will continue to increase in the coming years, due in part to a process it claims will boost its Chilean lithium production by 30% without extracting more brine, and in part to acquisitions such as the buyout of 60% of Mineral Resources Limited’s Wodgina hard rock lithium mine in Western Australia.
2. Tianqi Lithium Corp. China, N/A
Tianqi Lithium (SHE: 002466, M/C: $3.81b), a subsidiary of China’s state-owned Chengdu Tianqi Group, is a vertically integrated lithium miner and lithium chemicals producers. It has a 51% stake in the Talison Lithium joint venture, which operates the Greenbushes lithium mine in Western Australia. Last year, Tianqi purchased a 23.8% stake in SQM, the world’s third-largest lithium producer, from Canadian fertilizer company Nutrient for $4.066 billion. This brought its total stake in SQM to 25.9%. It also has mines in China.
Exact figures are hard to come by, but it’s clear Tianqi is among the world’s three largest producers and will become the biggest – if it isn’t already. Greenbushes represented approximately 26% of total lithium chemical demand in 2018 and Tianqi is investing around $380 million to increase output there. According to a GF securities analyst, its SQM stake could bring Tianqi’s market share to the equivalent of 46% of the world’s 2017 ore output.
SQM (NYSE: SQM), Chile, 17%
Speaking of SQM (NYSE: SQM, M/C: $3.44b), full name, Sociedad Química y Minera de Chile S.A, this Chilean company sold 45,100 metric tons of lithium carbonate equivalent in 2018, giving it a 17% market share of lithium chemical demand. Listed on the Santiago and New York stock exchanges, SQM’s has production facilities in the Atacama Desert in northern Chile. It is also involved in specialty plant nutrition, iodine and derivatives, industrial chemicals, and potassium.
Like Albemarle and Tianqi, SQM has looked outside its home country’s borders for growth. In 2016 it entered into a 50/50 joint venture to develop a lithium project in Argentina. In 2017, it acquired 50% of the Mount Holland Lithium project in Western Australia, which could double SQM’s lithium production when operations begin in 2021.
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