By Yusuf Khan
Further support from the government in both financing and regulation is needed to boost lithium supply, as demand for the battery metal is expected to surge over the coming decade.
Speaking at the Mines and Money conference in London, industry figures said that lithium supply is currently lacking and would continue to do so without help from global governments.
“Nobody is thinking about where the supply of commodities is coming from,” said Anthony Viljoen, chief executive of AfriTin Mining Ltd. during a panel discussion.
“There is a lack of understanding what it takes to build a mine from scratch,” Mr. Viljoen added, saying that little is known about how long and what resources are needed to develop lithium mines.
Estimates from Benchmark Mineral Intelligence show that lithium production currently stands at roughly 678,000 tons a year in 2022 but by 2035, 4 million tons will be needed to meet demand from the growing battery sector.
“Lithium is abundant and investors are coming,” said Roland Chavasse, secretary general of the International Lithium Association. He added that political awareness was finally arriving in the form of the U.S. Inflation Reduction Act but said that this was still in its infancy.
Mr. Chavasse referred to the European Commission being one of the governmental actors that wasn’t currently helping to grow lithium supply despite having ambitious targets for renewable energy, noting that lithium may be reclassified as toxic by the commission, with deliberations currently continuing.
“There is a lack of understanding at a political level and this is already having ramifications in mining,” Mr. Chavasse said. “We need to explain to the public what the requirements of mining are [to the green transition.] You can’t have an omelet without breaking some eggs.”
Mr. Viljoen also said that original equipment manufacturers and car makers were likely to move more to vertical integration within the mining sector to help secure supply, noting that offtake agreements between car makers and mining companies was becoming more common.
Write to Yusuf Khan at yusuf.khan@wsj.com
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