5 min

Mining Giants downplay Net-Zero Industry, now racing to boost Lithium production

AN EXCLUSIVE INTERVIEW WITH:
Go to website
Go to website

Mining Giants downplay Net-Zero Industry, now racing to boost Lithium production

The precipitous fall in Lithium prices has not dampened medium and long-term incentives, as the Lithium trend is both secular and irreversible.

However, multinational mining companies and a significant group of investors initially lagged behind. Since then, the strategies of major mining companies to engage in Lithium have been substantial.

Rio Tinto

Rio Tinto has resolved to become a major Lithium producer. In this regard, it paid USD 850 million at the end of 2021 for the Salar Rincón project in Argentina's Salta province. In January 2024, Salta province granted the socio-environmental permit for a Lithium carbonate processing plant with an initial capacity of 3,000 tonnes per year, potentially scalable to 20,000 tonnes per year.

Glencore

Mining giant Glencore has announced its ambition to become one of the largest Lithium producers in the coming years. In addition to being the second-largest partner of Li Cycle Holding (a recycling company), the company made its first investment in a Lithium mine through Tantalex. The Swiss miner will hold 30% of the company for a project in the Democratic Republic of the Congo (DRC).

Anglo American

Anglo American has indicated it is actively seeking Lithium procurement deals. "We don’t have a Lithium mine, but we are looking for Lithium," stated Paul Ward, head of base metals, in late December 2023.

Vale S.A.

"Brazil will become a global Lithium powerhouse," declared an executive of Vale S.A., following the South American country's opening of its market this year.

What causes Lithium price volatility?

One reason mining giants hesitate to enter the Lithium market is the suspicion that price volatility is due to its highly speculative nature.

Moreover, Lithium market dynamics are influenced by geopolitical decisions (such as the IRA Law in the USA), which can distort any price forecasts.

Short-term Lithium prices are volatile because it is produced in limited quantities, raising fears of supply interruptions and leading countries like China to accumulate excessive inventories.

No industrial-scale project currently exists worldwide that uses Direct Lithium Extraction (DLE), despite numerous startups claiming to have a solution. News of supposed breakthroughs causes their stock valuations to rise.

These giants should consider that their large-scale processing capabilities have become obsolete; Lithium represents a battle of technological innovations.

Perhaps they should pay attention to the leaders at the forefront of the energy paradigm's turning point. After all, as Warren Buffett said,

"The risk comes from not knowing what you're doing."

RELATED POSTS

July 2, 2024
Interview

Exclusive Interview with MSU

In this exclusive interview for Argentina Energy Week (AEW) 2024, leaders from MSU Green Energy discuss their leadership in Argentina's energy transition, highlighting significant investments in solar projects and sustainable initiatives. Discover their commitment to community impact, technological innovation, and overcoming market challenges.
June 28, 2024
Article

Transportation in Cuba: Challenges in the transition to Renewable Energy

The transportation system in Cuba faces numerous challenges that impact both the economy and the quality of life of its citizens. From 2010 to 2022, the country invested $27.386 billion in importing machinery and transportation equipment, according to the National Office of Statistics and Information (ONEI). Despite this investment, it has not been sufficient to address the sector's structural issues, which currently transports 50% fewer passengers than it did five years ago.
June 25, 2024
Interview

Exclusive Interview with Edenor

In this exclusive interview for Argentina Energy Week (AEW) 2024, EDENOR’s leaders discuss their role as Argentina’s largest electricity distributor, highlighting their transition to clean energy and technological innovations. Learn about their sustainability initiatives and community programs, and discover their strategic vision for the future, including smart grid development and renewable energy projects.