The unit will have capacity for 2,000 short tons per year, scalable to 9,000 tons per year in 2024.

From that point onward, depending on exactly when it starts up and how well it performs, the US company foresees a first phase of commercial output at 90,000 tons per year in mid-2026. Capital expenditures for that were expected to be spread through 2024-26, totaling $373 million.

Capex for that first phase, however, would start slowly, with around $37 million scheduled for next year.

“It will be a combination of government-funded facilities, with either low interest [loans] or grants, plus non-dilutive prepayments and royalty structures,” Starzecki told Fastmarkets in an earlier interview on September 18. “All else would be via equity.”

Forward-looking plans

When a group of investors acquired the Fort Cady project in 2016, the company, was known at the time as American Pacific Borates, and was listed on the Australian Securities Exchange (ASX). It was later rebranded to 5E Advanced Materials and the primary listing was moved to the Nasdaq.

The intention is to develop the company into a relevant participant in the boric acid market, which is currently dominated by two companies, and to focus on sales to the US domestic market, Starzecki said. This would go well with the country’s plan to develop more critical materials in-house and to put 5E in a strong position for further development.

After phase 1, the company plans on investing to develop capacity for 270,000 tons per year in a second commercial phase of the project. The last step would be to achieve 450,000 tons per year in phase 3. The life of mine has been calculated at 31 years, but “should actually be longer,” Starzecki said in September.

Extracting boron from colemanite ore will leave 5E with calcium chloride, from which it can produce lithium carbonate as a byproduct. In the initial, small-scale facility, the company expects to produce around 110 tons per year of lithium carbonate.

According to a company presentation published in August, phase 1 would yield around 1,100 tons per year of lithium carbonate, and this volume would be expected to rise to 5,500 tons per year in phase 3, Starzecki said on September 18.

Construction work at Fort Cady started in the fourth quarter of 2022. With the plant ready, the company only requires authorization from the US Environmental Protection Agency (EPA) to inject acid and commence production.

“We expect that to be [happen soon] because we’ve now completed our step rate testing,” Starzecki said on Friday.

Boron, boric acid and derivatives

Boron can be used in a wide range of applications, ranging from fertilizers to glasses and ceramics, but also in alloys which make up neodymium-iron-boron (NdFeB) that can be used, for example, in permanent magnet motors in electric vehicles (EVs) and wind turbines.

In EVs, it can also be added to bodies and frames, as well as being used in liquid-crystal display (LCD) screens and as a stabilizer in lithium-ion batteries.

Kernite, ulexite and colemanite can be used as input for boric acid production, albeit yielding different results – 5E’s colemanite deposit has one of the highest grades for that. Boric acid and boron oxide go into magnets, solar panels and wind turbines, while further refining into carbides and nitrides can serve the aerospace, fiber optics and satellites industries.

Going further downstream significantly reduces traded volumes, but also raises prices accordingly, Starzecki said. The difference could range from $1,000 per short ton to $10,000 per short ton or even $100,000 per short ton in some cases, according to sources in the industry.

Currently, Fastmarkets does not assess boric acid prices.

Supply/demand trends

Market participants estimated that around one-third of demand for boron currently comes from agriculture and ceramics – the same proportion of consumption that is concentrated in China.

That was expected to change to show more demand from North America and Europe under government incentives such as critical material plans and re-shoring efforts, and for use in EVs and decarbonization projects.

In a late 2021 report from Credit Suisse, frequently mentioned by 5E, analysts with the investment bank wrote that demand for boron arising from decarbonization projects could comprise 75% of the total demand by 2050, or even 90% in the case of an exponential consumption increase.

According to that Credit Suisse report, in a worst-case scenario, demand in 2050 would be around four times higher than in 2020, when it was slightly below 800,000 tonnes. And it would almost grow tenfold in the bank’s most positive estimate.

“We strongly believe that energy transition can bring a demand event to the boric acid market,” 5E’s Starzecki first told Fastmarkets on July 26. “And we have a good opportunity with re-shoring in the US that could help the current market, in which processing is dominated by China.”

The US Geological Survey (USGS) has not included boron in its critical minerals list, where materials are ranked according to scarcity and their importance for energy transition technologies. But 5E has been arguing that it is not only key to processing and manufacturing several materials that were included, but is also rare worldwide. It would sit at 19th place on the USGS list, just below the light rare earth element praseodymium, for example.

Currently, the world’s largest boric acid producers are Turkish state-owned company Etimine (close to 65% of global supply) and Rio Tinto’s US Borax operations in California (around 20%). If the forecast demand event does happen, 5E believes that new projects will be essential to secure supply.

“We’ll use our small-scale facility to optimize the efficiency of the well field, understand what purity we can refine and the crystallization process,” Starzecki told Fastmarkets in September. “Then, we’ll take it for offtake discussions.”

In the future, the company intends to operate with about half of its production going to meet offtake agreements, to sell 25% in the spot market, and to use the remaining 25% in making its own advanced materials.

Keep up to date with the latest news and insights on our dedicated battery materials market page.

The post US 5E Advanced Materials ready to start up small-scale boric acid plant appeared first on Fastmarkets.

Planned phase 1 output is large by industry standards, at around 5,000 tonnes per year of rare earth oxides contained in concentrate. Importantly, this will include both the light rare earths neodymium and praseodymium and the heavy rare earths dysprosium and terbium, which are all needed for high-performance neodymium iron boron (NdFeB) magnets for the engines of electric vehicles (EVs).

Neodymium and praseodymium are used in the largest amount in NdFeB magnets, but trace quantities of dysprosium and terbium are critical for maintaining the performance of these magnets at high temperatures inside an EV engine.

Global production of heavy rare earth ores is concentrated in Myanmar, and supply is frequently disrupted. This is accelerating the search for new sources of supply to meet growing demand from the automotive sector.

Serra Verde’s plant, located in Minaçu, a city at the Brazilian midwestern Goiás state, has a mine life of about 25 years at around 5,000 tpy. The company may advance to a second phase of production, which could double the run of mine output by the end of the decade.

A Serra Verde spokesperson told Fastmarkets that offtake agreements have already been concluded for a large share of phase I production in the coming years.

The company has not disclosed the identity of its largest customer, but market participants point out that China is currently the only major commercial producer of refined heavy rare earth products. That said, new heavy rare earth refining projects are expected to come online around the world – including in the US and Canada – in the next 2-5 years.

A sleeping rare earth giant

Brazil has the third largest reserves of rare earths in the world according to the US Geological Survey (USGS), with 21 million tonnes. The latest USGS report puts China first, with 44 million tonnes, followed by Vietnam, with 22 million tonnes. Russia shares the third spot, also with 21 million tonnes.

China is currently the only country with a fully vertically integrated supply chain for rare earths magnets and is also the largest consumer of rare earth raw materials. Japan is the only other nation with a large, highly developed magnet industry.

The introduction of Chinese export controls on semiconductor metals gallium and germanium in August this year has raised concerns about security of supply, in part because gallium metal is also an important additive in high performance NdFeB magnets.

It has also revived memories of a political dispute thirteen years ago that resulted in severe disruption to exports of Chinese refined rare earth materials and triggered a global market panic.

Current production in Brazil is a fraction of its potential. The USGS estimates that Brazil produced 80 tonnes of rare earth raw materials last year out of total global supply of 300,000 tonnes.

Mineral research requests have soared in recent years according to Brazil’s National Mining Agency – up by 70% from the number in 2021 to 155. Most were for rare earths exploration in Goiás, but there were also several in the southeastern Minas Gerais state and in the northeastern Bahia state.

But financing is not flowing into the region to match. The International Energy Agency estimates that just 7% of global exploration budgets for nickel and rare earth elements have been allocated to Latin America. The problem could also be a lack of geological mapping, according to the Julio Nery, head of sustainability and regulatory affairs at Brazilian mining association IBRAM.

Less than a third of Brazilian territory has been surveyed on the 1:100,000 scale, which is better suited to initial assessments of potential resources. A significant portion of that is in indigenous territories or Amazon protected reserves, making exploration difficult.

“I think this is a conversation Brazil will need to have if it really wants to be a significant player in new commodities,” an industry source said. The mining association is developing a strategic minerals plan, which it intends to present to the federal government.

More projects in Goiás

Canadian explorer Appia Rare Earths & Uranium Corp is completing phase 1 exploration drilling at another ionic clay deposit on the so-called Brasília Fold Belt orogen. The PCH project – formerly Cachoeirinha, located near the city of Iporá – is expected to publish a mineral resource estimate by the end of this year. Appia purchased 70% of the project in June.

“The regional mineralogy has very similar lithologies to Serra Verde, demonstrating the classic model of ionic clay structures,” Don Hains, consulting geologist and senior advisor to Appia, said in April, adding that the locations are both among the relatively few deposits of this type found outside of China.

Another Canadian rare earth explorer, Aclara, is looking at developing an ionic clay heavy rare earths deposit in Goiás. Dubbed the Carina Module project, the first drilling results were published this past week, and a maiden resource estimate is scheduled to be released by the end of 2023.

More projects in Brazil

In Minas Gerais, Australia-based Meteoric Resources is close to a pre-feasibility study of its Caldeira project, located near the city of Poços de Caldas. Metallurgical tests ended in the third quarter of 2023 confirmed potential high recovery rates for ionic clay in the area, the company said.

“I look forward very much to the additional results available in the next quarter and beyond this phase of work, to the precipitation of mixed rare earth carbonate phase of the program due early in 2024,” Nick Holthouse, Meteoric’s chief executive officer, said last month. Meteoric completed the purchase of Caldeira in April and signed a non-binding cooperation agreement with the Minas Gerais state government in August.

UK-listed junior miner Rainbow Rare Earths is developing a rare earth project near the city of Uberaba, also in Minas Gerais, together with US-listed phosphate and potash producer Mosaic, an owner of a nearby phosphogypsum stack – a by-product of phosphoric acid production.

“Our approach is to target secondary sources of rare earths that can be brought into production quicker and at a lower cost than traditional hard rock mining projects,” George Bennett, Rainbow Rare Earths’ CEO, told Fastmarkets. The next steps for Uberaba would be a resource drilling campaign and a preliminary economic assessment, he added.

Also in Minas Gerais, but 116 km away from Uberaba, large Brazilian niobium producer Companhia Brasileira de Metalurgia e Mineração (CBMM) has been looking at extracting rare earths from tailings.

“CBMM already owns the technology needed to produce rare earths, and continues to track market trends,” Rogério Ribas, the company’s executive manager for battery products, told Fastmarkets. “However, current prices in the global markets are making investments needed to bring those to a commercial scale unfeasible.”

Sofia Okun in London contributed to this article.

Keep up to date with the latest news and insights on our dedicated battery materials market page.

The post Brazil starts to tap its rare earth reserves appeared first on Fastmarkets.

Those proposals were currently being analyzed, the company said.

The third-parties involved in these offers have not been disclosed.

“The companies and the project have attracted interest from potential strategic partners, including global industry leaders in the energy, automotive, batteries and lithium refining industries,” the announcement said.

A decision will be taken at a shareholder meeting with “the majority of minority shareholders,” Sigma said, although no specific timeframe was given. It could involve bringing in a strategic partner or agreeing another type of transaction, the company added.

“Now as a fully-fledged global producer, Sigma Lithium’s board of directors is conscious of its fiduciary duty and the responsibility involved in selecting our strategic partner, enabling Sigma Brazil to continue to take our country to the next level in securing its vital position within the global lithium supply chain,” chief executive officer and co-chair of the board Ana Cabral said in a written statement.

Sigma came to the seaborne market at a time when lithium prices were under pressure due to weak demand and an overall poor market sentiment in China, with minimal spot activity being reported.

For example, Fastmarkets’ latest price assessment for spodumene, min 6% Li2O, spot price, cif China was $3,000-3,500 per tonne on August 31, widening downward by 2.99% from $3,200-3,500 per tonne a fortnight earlier and 5.80% lower than $3,300-3,600 per tonne at the start of that month.

The price has tumbled by 60.12% in 2023 so far, compared with $8,000-8,299 per tonne on December 22, 2022.

And Fastmarkets most recently assessed the lithium carbonate, 99.5% Li2CO3 min, battery grade, spot prices, cif China, Japan & Korea at $27.00-29.00 per kg on Wednesday. This was stable from the day before but down by 5.08% from $28.00-31.00 the previous week and down by 15.15% from $32.00-34.00 per kg on August 16.

In 2023 to date, the price has come down by 65% compared with $79-81 per kg on December 30, 2022.

Sigma currently has capacity for 36,700 tonnes per year of lithium carbonate equivalent (LCE) at Grota do Cirilo, in what it has called phase 1 of that project. Phases 2 and 3 could increase production to 104,200 tpy.

In July, it shipped 30,000 tonnes in a 50:50 ratio between spodumene concentrate and lithium oxide hypofine byproducts, with a second 45,000-tonne cargo (33:66 ratio) shipped in September. During an earnings conference call on September 5, Cabral said that another shipment was expected by the end of September.

“We see potential for a fourth line to be installed, and should be announcing steps for phase 4 soon,” she said at the time. She also mentioned that phases 2 and 3 could be ready in 2024.

Despite tougher market conditions putting pressure on prices, Fastmarkets research forecasts that the market will be in deficit this year and in 2024.

According to its latest research report, published on September 12, Fastmarkets expects LCE production to reach 897,300 tonnes in 2023 and 1.13 million tonnes in 2024, while apparent demand is projected at 969,700 tonnes and 1.21 million tonnes respectively.

The deficit would, then, be 72,400 tonnes in 2023 and 82,690 tonnes the next year.

Fastmarkets research also forecasts lithium carbonate prices to average $33.99 per kg on a CIF China, Japan & Korea basis during the third quarter, down from $36.00 per kg in April-June this year. The price would then fall to $29.83 per kg in the last quarter of 2023.

In July, Sigma’s CEO had already told news agency Reuters that the company was working alongside Bank of America to negotiate a potential merger, acquisition or partnership. In February, Bloomberg reported that US electric car maker Tesla had considered making an offer.

Keep up to date with all the lithium price changes and data on our dedicated lithium price page.

The post Brazil’s Sigma Lithium looking at M&A proposals after first shipments appeared first on Fastmarkets.

The Brazil-based company is investing $80 million in building its first industrial-scale niobium oxide refining plant, intending to supply battery makers with the additive. The first production from this 3,000-tonnes-per-year facility was expected in the second quarter of 2024, Ribas said.

“If all of that new capacity coming online next year is sold out, we are talking about something near 5% of our annual revenues,” Ribas said on Tuesday. “By 2030, we hope to have 25% of our revenue coming from battery raw materials.”

Achievement of that goal by the end of this decade would mean selling around 35,000 tpy of battery-grade niobium oxide. This would compare with around 270 tonnes in 2022, which was purchased mostly by Chinese customers for applications in battery cathodes, Ribas said.

Those volumes would be equivalent to 40,000 tpy of ferro-niobium by 2030, compared with 400 tonnes last year. Ferro-niobium is CBMM’s main product, and is an alloy used mostly in steelmaking to improve strength and to prevent corrosion in steel products.

“Our idea is to put this new capacity into the market and see what the reaction to it will be,” Ribas said. “Then, we’ll establish what would be the triggers for any future expansion investment.”

CBMM currently has capacity to produce around 150,000 tpy of ferro-niobium, making it the main global supplier by far. More than 80% of the world’s output comes from the company. Its facilities are located in Araxá, a city in Brazil’s southeastern state of Minas Gerais.

Fastmarkets’ latest weekly price assessment for ferro-niobium 63-67%, delivered consumer works, dp, Europe, was $47.80-48.20 per kg Nb on August 23. This was unchanged since August 2, when it fell by 0.27% from $48.10-48.15 per kg Nb a week before.

So far in 2023, the price assessment has risen by 7.31% from $44.25-45.20 per kg Nb on December 28, 2022.

Niobium in battery anodes

The new refining plant being built by CBMM in Araxá will focus on niobium oxide applications in battery anodes, although it will have capacity to make some speciality grades meant for cathodes too, Ribas said.

Niobium in anodes for battery chemistries with high graphite content could help with durability and fast charging, he added, taking carbon out of the equation. Although its application in anodes is more niche than in cathodes, for example, niobium volumes would be much higher in the former.

“For anodes, we can produce a mixed oxide with titanium or tungsten in powder form, which will then be used in a paint product that will coat the anode, and niobium content can be around 60-95% of it,” Ribas said. “For each kilowatt-hour [kWh] of capacity, 1.5kg of niobium would be needed.”

CBMM aims to capture markets such as heavy duty, last-mile delivery trucks, ships, rail transport and some uninterruptible-supply energy storage systems (ESS) with that application in anodes.

“For example, a hybrid truck that needs 3-5kWh in capacity, in general, uses 10-15kWh battery packs for fast charging. With niobium, a 3kWh battery would be possible,” Ribas said.

Cathodes and the future

On the other hand, niobium oxide usage in cathodes is more niche, and would mean a much lower volume of the metal was needed, Ribas told Fastmarkets. Niobium content per kWh, for example, would be weighed in grams, he added.

It can act as a powder additive going into any battery chemistry – such as nickel–cobalt-manganese (NCM) or lithium-iron-phosphate (LFP) – to help with stability and durability via coating or doping as a ready-for-use stabilizer.

In China, which is by far the country with the largest battery manufacturing capacity at the moment, the Brazilian company expected the rise of LFP batteries with manganese added (so, LMFP) because this would make energy density higher, and it was seeing some development on that front.

There was talk, Ribas said, that LMFP batteries could substitute around 60% of LFP chemistries in the future, with at least half of lithium-manganese oxide users adding niobium to the mix.

CBMM also believed that adoption of high-nickel NCM batteries would grow rapidly.

“And niobium usage in cathodes is especially good for high nickel content due to its issues when reacting to the atmosphere, affecting performance. Niobium reduces that risk,” Ribas said.

Niobium content in this case, although with much more widespread use than in more specific markets than would be the case for anodes, would be significantly smaller: less than 1%.

Fastmarkets has similar expectations for the use of high-nickel NCM and LFP chemistries in batteries, albeit not in detail regarding LMFP.

The forecast from Fastmarkets research is for LFP to represent 43% of the market by 2033, compared with 25% last year, while high-nickel NCM would reach 34% a decade from now, compared with 1% last year.

At the same time, usage of NCM 811 batteries (8:1:1 ratio nickel:cobalt:manganese) would fall to 9% over that period, from 21%, and NCM 622 market share would go to 2%, from its dominant position at 41% in 2022, according to Fastmarkets research. The projection was that high-manganese NCM battery use would be at 9% in 2033, from nil currently.

According to Ribas, competitors to niobium in terms of helping with fast charging and durability in cathodes would be principally boron, but also tantalum, zirconium, titanium, tungsten and even aluminium.

Niobium prices could be high in comparison with those other materials, he acknowledged, but added that it could be used alone – unlike zirconium, for example, which must be applied in tandem with boron or tantalum.

Ribas said that in future niobium could also be used in the battery electrolyte, but only in solid-state units.

“We are working on its usage for that next generation of solid-state batteries,” he told Fastmarkets. “We might see that market start to grow in five or ten years’ time for specific applications, but it will definitely be more than 10 years for the mobility sector.”

The post Brazil’s CBMM expects niobium for batteries to make 25% of revenues by 2030 appeared first on Fastmarkets.

“Argentina is currently the second-largest in terms of lithium reserves, but we are only the fourth-largest in output,” the president of Argentina’s Chamber of Mining Companies (CAEM), Franco Mignacco, said on August 9 in Salta. “A lot of work has been done in the past 10 years and much more needs to be done [in future].”

Provincial rules

Three governors at the conference – who administer the Salta, Jujuy and Catamarca provinces – were very vocal about maintaining the country’s provincial model of resource exploration, instead of going national. Not only would it ensure that their influence stayed strong, but they believed that it made private-sector partnerships easier and licensing more streamlined.

On the sidelines of the Lithium in South America conference, Mignacco told Fastmarkets that foreign exchange controls currently in place in Argentina would need to be loosened if the country were to secure more than the $7 billion that would be needed in capital expenditure for the first three lithium projects in Argentina to boost capacity.

“The road to higher production will be very capital-intensive, and we need the private sector to work together with governments,” the CAEM president said.

Throughout the conference, not only executives but analysts and politicians acknowledged that Argentina could find it difficult to attract foreign private investment, depending on the exploration model for lithium.

“We need to differentiate ourselves from [the model in] Bolivia or Chile,” Jujuy governor Gerardo Morales said during the conference. This sentiment was echoed by the governor of Salta, Gustavo Sáenz, and the governor of Catamarca, Raúl Jalil.

“I think it takes absolute political maturity for these three governors from different parties and different ideologies to work toward a common goal like this,” Sáenz said.

In April this year, Chilean President Gabriel Boric said that his country intended to nationalize lithium resources. In theory, mining rights are already under national control in the South American country and must be granted by the central government, but in practice, state-run copper giant Codelco was selected to spearhead new ventures.

Ahead of the presidential election in Argentina later this year, the local press has reported that the ruling left-wing Justicialist Party (PJ) would have plans for a similar “lithium nationalization” – although this has since been denied.

The first round of voting took place in Argentina on August 13, with PJ taking fourth place. Far-right candidate Javier Milei was in the lead with 30.0% of the vote, followed by Patricia Bullrich with 28.3% and Sergio Massa with 27.3%.

Argentina’s race to the top

The outlook from Fastmarkets research is that, by 2029, Argentina will have taken over as the world’s third-largest lithium producer behind China and Australia, while Chile will have fallen to fourth place. The forecast was for lithium carbonate equivalent (LCE) mine supply from Argentinian producers to reach 428,100 tonnes per year, compared with only 38,459 tonnes last year.

Over the next decade, the average compound annual growth rate was calculated at 28% for Argentina, one of the fastest globally, but only 5% for Chile.

“With such large growth, we expect Argentina to overtake its neighbor, Chile, where supply expansion is almost solely attributable to the incumbents already operating,” Fastmarkets’ battery raw materials analyst Jordan Roberts said on Wednesday, August 16. This would mean that no significant project was expected to start producing in Chile during that 10-year period.

Fastmarkets research’s longer-term outlook, to 2033, was for Chinese supply of LCE to reach 893,800 tpy; Australia, 779,625 tpy; and Argentina, 589,350 tpy. Chile’s output would fall to 376,000 tpy, with Canada in fifth place, 158,223 tpy.

“Argentina has the resources, such as lithium, that will be key to a greener world,” Argentinian national mining secretary Fernanda Ávila said on August 9. “Now what we need is to move toward being a mining country, such as Chile is today.”

Fastmarkets’ assessment of lithium carbonate 99.5% Li2CO3 min, battery grade, spot prices, cif China, Japan & Korea, was most recently at $30.00-34.00 per kg on August 18. This compared with $36.00-38.50 per kg eight days earlier amid a seasonal market lull.

The price was also down from $38.00-42.50 per kg on July 20.

Fastmarkets research forecasts a 72,400-tonne market deficit this year, with carbonate prices in China, Japan and Korea expected to average $45.00 per kg during the year, compared with $71.24 per kg in 2022. The lithium price was expected to fall to $39.00 per kg on average in the last quarter of this year, however, which would mean a recovery from recent spot levels.

Trade deals with Argentina

During the conference in Salta, company executives and experts warned that Argentina could face a more political obstacle to becoming a global lithium supply leader. Although Chile has no new significant projects coming online, it does have something that Argentina does not: a free trade agreement with the US.

“The US and Europe do not have currently, nor are expected to have, the production necessary for their ambitions amid recent geopolitical rearrangements,” Rio Tinto’s managing director in Argentina, Guillermo Caló, said on August 9. “But Argentina has no free trade deal with the US, so benefiting from the [conditions set out in the US Inflation Reduction Act] is more difficult.”

The IRA, as it is known, was signed into law in August 2022 and was designed to help secure critical materials supply to the US. In the year since then, there have been no real material developments, and qualifying for its tax credits, for example, has proven to be tough, as noted by market participants in Salta.

“What Argentina needs to do is to prove itself as a reliable lithium supplier,” Ignacio Celorrio, the Latin America regional president for Lithium Americas, said. “It can be at the center of a largely sophisticated global development.”

In terms of supplying the US with lithium for batteries, Argentina could work around not having a fully fledged free trade deal if it can show that it is not a “foreign entity of concern” – and executives and authorities are wary that changes in regulations, for example, could see the country added to that list.

“This is a key moment,” Livent corporate affairs director Ignacio Costa said on August 9. “The US is trying to secure its [lithium] supply and take leadership [in the Western battery space] from China. Argentina can do it.”

The post Argentina wary of neighbors’ lithium regulations affecting bid to supply world demand appeared first on Fastmarkets.

“Our board of directors has authorized the constitution of both these companies, allowing the state to join the development of this industry, which, together with copper, is seen as key to link Chile’s progress with the transition to a global green economy,” Codelco chairman Máximo Pacheco said in a written statement.

On Wednesday May 17, Chilean mining minister Marcelo Hernando said in a meeting with the country’s copper commission Cochilco that the creation of a state-owned lithium company that will act alongside Codelco was being readied for a Congress vote in the second half of 2023.

Chile’s boost to lithium exploration

Designing this new Empresa Nacional del Litio – or National Lithium Company – was one of the steps announced by Chile’s president Gabriel Boric in April, when he revealed intentions to nationalize lithium resources.

Codelco is the world’s largest copper producer and is now paving the way to also potentially explore lithium assets, together with Empresa Nacional de Litio or the private sector. Pacheco was nominated by the company board to be the person responsible for negotiating and considering a stake in the business in Atacama.

“This board believes that entering the lithium business will allow Codelco to diversify risks, improve revenues and even generate a positive impact on global electrification,” the company said in a letter on Wednesday.

“Currently, supply of this mineral is a limiting factor to electric transportation. To close that gap would positively affect copper demand as well, something that would also benefit the company,” it added.

Chile has forecast that demand for lithium will grow more than sixfold from 2020 levels, while mine output is set to increase only four times.

Lithium demand to outpace supply

In 2022, copper commission Cochilco – a body under the mining ministry responsible for mining market studies and supervision of state-owned organizations related to those markets – published its largest lithium paper to date, showing not only those numbers, but also its projection that Chile will lose ground as an important lithium producer in the future.

According to Cochilco, global demand for lithium carbonate equivalent is set to grow to 2.11 million tonnes in 2030, compared with 327,000 tonnes in 2020. Consumption for electric vehicle production would represent 73% of total demand, up from 41% in 2020.

Meanwhile, brownfield and greenfield capacity expansions already in development would boost mine output to 1.64 million tonnes of lithium carbonate equivalent by 2030 from 384,000 tonnes in 2020.

“We expect that today’s market balance will remain relatively stable until 2027 but with supply tightness,” Cochilco wrote in its report last year. “That means any disruption or delays in operation ramp-up… would send the market into a deficit.”

In that same study, the commission said that projects in Australia would cause that country to become the world’s largest producer by 2030, with Argentina poised to at least match Chile’s output – effectively reducing Chilean contribution to global lithium supply to 15% from 32% in 10 years.

At the time the paper was published, Albemarle and SQM were producing lithium in Chile. Now, the government intends on boosting that capacity with its own companies.

Fastmarkets Research’s own forecast is for available lithium carbonate equivalent around the world to reach 1.12 million tonnes by 2024, up from 417,000 tonnes in 2020. Apparent demand is expected to hit 1.21 million tonnes, up from 378,000 tonnes in the same comparison.

Cochilco’s outlook was for 838,000 tonnes in aggregate global demand and 803,000 tonnes in mine output by 2024.

Lithium carbonate prices start to rebound

A long-lived downtrend that left lithium carbonate prices at their lowest level in Asia since late 2021 was recently reversed, with recovering lithium-iron phosphate battery cathode output boosting demand – and prices – for carbonate.

Fastmarkets’ latest assessment of lithium carbonate 99.5% Li2CO3 min, battery grade, spot prices cif China, Japan & Korea was $32-36 per kg on Friday, down by 2.86% from $32-38 per kg the day before, but 9.68% higher than $30-32 per kg a month before and17.26% higher from the 1.5-year low of $28-30 per kg on May 4.

Fastmarkets Research forecast that lithium carbonate prices will average $34 per kg in the second quarter of 2023, rising to $44 per kg in the third quarter and $48 per kg in the final three months of 2023. In 2024, the average price is forecast at $50 per kg.

Chile in search of more funds from mining

That more lithium will be needed for electric vehicles usage to become more widespread is a fact that has been well-known for years. But now the Chilean state wants it “in-house” too as part of a myriad of actions aimed at tackling inequality and mounting public dissatisfaction, mainly due to the cost of living.

In 2019, demonstrations in Chile due to higher costs and insufficient government investments led to at least one mining workers’ standstill. That movement turned into an assembly to draft a new constitution, which was ultimately denied by voters.

Sentiment among part of the population and politicians, mainly left-wing representatives with views close to President Boric, remained that the country needs to benefit more from mining. With that in mind, a proposal for larger mining royalties in the country was approved on Wednesday by the Chilean lower house of Congress.

In addition, an ad valorem tax and a variable tax over operating margins, investment funds aimed at supporting regional communities and capacity expansions in Chile were also approved.

Felipe Román Briones, president of the mining workers’ union federation in Chile, FMC, told Fastmarkets in August 2022, “it’s time that more profits from mining went into investing in Chile itself.”

Keep up to date with global market insights, lithium data and predictions for 2023 and beyond.

The post Codelco takes new step into lithium exploration in Chile’s Atacama salt flat appeared first on Fastmarkets.

“We bought this plant, which is in pristine condition, and plan on making use of some 70% of the equipment,” Wave Nickel chief executive officer Gustavo Emina said in an interview on April 17. “But the Caron-process furnace will be switched for our own microwave process.”

The company signed a deal on April 13 to acquire a mine, a processing plant and all operating infrastructure of Niquelândia, a nickel unit owned by Brazilian aluminium producer Companhia Brasileira de Alumínio (CBA) in a city with the same name located in the Midwestern Goiás state, for 20 million Reais ($4 million).

Originally a subsidiary of Brazilian industrial group Votorantim SA, Niquelândia, was put under care and maintenance in early 2016 due to falling nickel prices. It was later reorganized from Votorantim Metals – which became Nexa Resources to go public – into CBA.

The nickel mine has some 55 million tonnes in resources, with around 20,000 tpy in nickel carbonate capacity. But that is not what Wave Nickel intends to do.

“The deposits are laterite ore, typical of tropical areas. Brazil doesn’t produce MHP, or class I intermediates in general, and carbonate is costlier, it has higher carbon emissions,” Emina said. “Our [microwave] process is competitive and more sustainable, cheaper and with lower energy usage.”

According to the CEO, the new technology – yet to be tested on industrial scale – would be able to cut carbon dioxide emissions by roughly 28% for nickel alone. He added that the potential is even larger than that, because byproducts would be net zero carbon.

Nickel market remains under pressure

The Asian MHP market has been under pressure amid decreasing costs and lower nickel sulfate prices.

Fastmarkets assessed the nickel mixed hydroxide precipitate outright price, cif China, Japan and South Korea at $16,000-17,000 per tonne on May 5, stable week on week but down by 3.79% from $17,000-17,300 per tonne a month before and 7.56% lower than $16,700-19,000 per tonne on December 30, 2022.

And Fastmarkets’ assessment of the nickel sulfate premium, cif China, Japan and Korea was $1,000 per tonne on May 5, stable from the week before, when it fell by 16.67% from $1,200 per tonne on April 21.

The first phase of the Niquelândia reopening, scheduled to start up by the end of 2024, will be comprised of one plant to test engineering parameters of the process, a spokesperson told Fastmarkets on April 26. Wave Nickel expects to reach full commercial scale by 2029.

Emina believes this would further help Brazil to be on the map for the global energy transition. If the technology is successful at the recently-acquired site, it could be replicated in the country.

“In the past year or so, there has been a drastic change in where new projects are taking place, with the Western world pitching in to get capital outside of China to do it,” the executive said. “The United States has recently changed regulation to accelerate adoption of electric vehicles. There is not enough raw material for that.”

Wave Nickel is part of a larger group called New Wave, focused on research and development of technologies aimed for sustainability and bioeconomy efforts. Besides Wave Nickel, the group has Wave Aluminium, which recently signed a deal with Norsk Hydro to build a plant in Brazil that will process bauxite waste.

The acquisition of the Niquelândia nickel plant is still subject to approval from Brazil’s antitrust watchdog CADE and the country’s electrical power regulator, ANEEL. On top of 20 million Reais, CBA will receive 3% royalties over the unit’s net revenue, up to $10 million a year.

Keep up to date with the latest news and insights on our dedicated battery materials market page.

The post Wave Nickel buys Brazil ops to make Ni-Co MHP with microwaves appeared first on Fastmarkets.

Fastmarkets received no feedback since the consultation started on March 22.

Brazil’s import market for P1020A aluminium weakened significantly in 2023 after the Alumar smelter in the northeastern Maranhão state, restarted operations, which led the country to give up on its duty-free import quota.

Market participants were already anticipating in late 2022 and early 2023 that the import market would be less relevant this year.

The decrease in the frequency affects the following premium assessment:

MB-AL-0022 – Aluminium P1020A premium, cif dup Brazilian main ports, $ per tonne

To provide feedback on this assessment, or if you would like to provide price information by becoming a data submitter to this price, please email pricing@fastmarkets.com. Please add the subject heading “FAO: Renato Rostás, re: Brazilian aluminium premium assessment.”

To see all of Fastmarkets’ pricing methodology and specification documents, go to: https://www.fastmarkets.com/methodology.

The post Amendment to frequency of P1020A aluminium import premium in Brazil: pricing notice appeared first on Fastmarkets.

Domestic output became more prevalent after producers Alcoa and South32 decided to restart operations at their Alumar smelter, in northeast Brazil.

Fastmarkets expected that both these changes could slow down deal-making for aluminium imports, and that has been confirmed throughout the first quarter of 2023.

During January and February – according to the latest data published by Brazil’s industry and foreign trade ministry, MDIC – the country imported 25,867 tonnes of unalloyed aluminium.

This was down by 36.58% from 40,787 tonnes in the corresponding period a year before, and 58.63% lower than 62,528 tonnes in January-February 2021. It was also the lowest volume since 2013, before the quota was introduced, when the country imported only 3,371 tonnes in that same time window.

The proposed decrease in the frequency of assessment will affect the following premium:
MB-AL-0022 Aluminium P1020A premium, cif dup Brazilian main ports, $ per tonne

Fastmarkets currently assesses the Brazilian import premium once a fortnight, on a Tuesday, at 3-4pm London time. This premium assessment was launched in September 2014.

The consultation period for this proposed amendment starts on Wednesday March 22 and will end on Monday April 24.

The amendment will then take place, subject to market feedback, on Monday May 1, with the first assessment under the new frequency being published on Tuesday May 30 and every last Tuesday of the month thereafter.

To provide feedback on this assessment, or if you would like to provide price information by becoming a data submitter to this price, please email pricing@fastmarkets.com. Please add the subject heading “FAO: Renato Rostás, re: Brazilian aluminium premium assessment.”

To see all of Fastmarkets’ pricing methodology and specification documents, go to: https://www.fastmarkets.com/methodology.

The post Proposal to amend frequency of P1020A aluminium import premium in Brazil appeared first on Fastmarkets.

“We are thinking [Mexican steel demand] will continue to increase in the future, with growth over time. We are seeing all investments that our customers are doing… and we expect demand will grow for several years,” Ternium’s chief executive officer Máximo Vedoya said during a conference call with analysts to discuss full-year 2022 earnings on Wednesday.

New investments in capacity

Ternium said it will invest $2.2 billion in a new EAF and a direct-reduced iron (DRI) plant in North America with installed capacity of 2.6 million tonnes per year and 2.1 million tpy, respectively. The project also includes a port facility for raw material handling, it added.

The company is also investing in a new push pickling line, with the possibility of expanding cold-rolling and galvanizing capacity on site.

“This new demand from nearshoring will come in the long run, in late 2023, 2024 and 2025. So, in a couple of years,” Vedoya said. “We were able to make more steel products with the new hot-strip mill, and there is a certification process going on with industrial customers, which will be mostly completed next year,” he added.

Vedoya did not confirm where the new EAF and DRI plants will be located but said that “Pesquería would make sense” because it is close to the company’s newest facilities in Mexico. “The exact location will be disclosed soon,” he added.

Ternium started operations of a 4.4-million-tpy hot-rolling mill in mid-2021 in the city of Pesquería, in Mexico’s northern Nuevo León state.

Possibilities with new EAF

With the EAF, Ternium will make slab with an input ratio of 65:35 DRI to scrap, and the company assured quality would be the same as the semi-finished steel produced in its Brazilian operations, from two blast furnaces, especially for the automotive industry.

“Regarding costs per tonne, it’s difficult to say, depends on raw material costs… but with today’s slab market price of $700 [per tonne], costs would be around $550 [per tonne],” Vedoya said.

Fastmarkets’ latest price assessment for steel slab export, fob main port Brazil was $810-830 per tonne on February 10, up by $80-90 per tonne from $720-750 per tonne the week before and up by $150-190 per tonne from $620-680 per tonne a month earlier.

Mexican scrap prices, which will influence Ternium’s EAF input costs, have also increased recently.

Fastmarkets assessed the price for steel scrap No1 busheling, consumer buying price, delivered mill Monterrey at 9,400 pesos per tonne on Tuesday, a 4.44% weekly increase from 9,000 pesos per tonne and 12.57% higher than 8,350 pesos per tonne a month before.

The CEO also said the new EAF could allow for more slab sales to Usiminas, one of Brazil’s main flat-rolled steel producers — Ternium is part of its controlling group alongside Nippon Steel.

Ternium would have rolling capacity at around 7.5 million tpy globally and similar slab capacity but would continue to buy the semi-finished product from third parties and increase shipments to Usiminas, Vedoya said.

A previous plan of having two EAFs installed in North America could still be pursued in the future, the executive said. Capacity would, then, be larger than expected, because originally the two furnaces would be smaller than the 2.6-million-tpy one Ternium has chosen.

“We changed the configuration a bit, but, in the long run, we could fairly easily put a second [EAF to operate],” Vedoya said.

Near-term demand rising

In the meantime, the steelmaker has been enjoying a sales increase coming in part from import substitution in Mexico and also from weaker competition, according to Vedoya.

Altos Hornos de México (Ahmsa) has reportedly halted production for several weeks due to financial issues. This led customers to place more orders with Ternium and ArcelorMittal, Ahmsa’s main competitors in Mexico.

“Ahmsa is producing fewer tonnes, that much is true,” Vedoya said. “[But] right now we are gaining market share from imports, making our facilities work at much higher utilization rates,” he added.

According to the Ternium CEO, operations at the Churubusco facility — in the heart of Mexico’s industrial hub of Monterrey, 40 km away from the newest Pesquería hot-rolling mill — were intensified in light of more orders coming in, increasing capacity usage.

Felipe Peroni, in São Paulo, contributed to this report.

The post Higher steel demand from North America nearshoring to come until 2025 appeared first on Fastmarkets.