JOHANNESBURG – With nearly every forecast predicting higher battery use in the years ahead, especially lithium-ion batteries to power new and existing technologies, demand for its component metals may be dependent on what some title “the flavour of the month”.
Battery metals include cobalt, nickel, manganese, graphite and lithium.
During a panel discussion at this year’s Junior Indaba, held in Johannesburg, on Wednesday, Industrial Development Corporation of South Africa senior project development manager Bertie Strydom explained that the dynamics around the different mineral resources are dependent on what the market wants.
This has, in turn, led to a market segregation between powertype solutions, which provide energy for up to about four hours, versus energy type solutions, which provide energy storage for up to ten hours.
In simpler terms, this could mean lithium, for power type solutions, versus vanadium, for energy storage solutions.
“What we [the IDC] currently see is that, as the demand for a certain battery metal grows, so does the price for these metals. This is, however, a contradiction to what we see at the end product in terms of these battery solutions, where prices are continuously decreasing”.
Effectively, Strydom notes, the “middle man”, who will be adding value to the mineral and end product, will be sitting in a bottleneck squeeze as the raw material prices will be increasing, while product prices are decreasing.
This means that margins are coming under threat, he warned, adding that the market tendency has been to see end product manufacturers positioning themselves in securing mineral resources through capital investments.
This is a trend that South Africa should not lose out on, Strydom averred, as the country is “rich in minerals and we need to make sure that we benefit from these opportunities”.
To benefit from these opportunities that lithium and vanadium, in particular, present, Montero president and CEO Tony Harwood warns that “timing is absolutely imperative” when working within the battery metals space.
Additionally, he believes the lithium market is about to boom exponentially and the demand for lithium mining production is increasing significantly.
“Lithium isn’t rare, rather the lithium market is underdeveloped in comparison to most other industrial commodities, leaving a value space for a select number of companies to find and develop economic lithium deposits,” he explained.
Lithium is predicted to continue to play an increasingly important role in the battery-powered clean air future for at least the next 20 years.
In terms of vanadium, local producer Bushveld Minerals CEO Fortune Mojapelo noted that the company is riding the wave of an increased vanadium demand from China, while hoping for an upside for the metal in the energy sector.
Citing this choice of commodity as imperative, Mojapelo said on Wednesday that “everything the company looked at in that space, pointed to what was getting into a sustainable structural deficit”.
Going forward, he added, Bushveld will be focusing on where the supply comes from in future, and from which environment, as well as how the company can consolidate these factors while continuing to grow.
“From that point of view, we were confident that we will be fully able to meet the challenges that will present themselves when the time comes,” he added, noting that nobody can fully predict when the turn in prices comes for battery metals.
Commenting on cobalt, however, Opal Mining group executive chairperson Paul Ranamane said that while a very important metal, it is only largely found in the Central African Copperbelt as a mining by-product for base metal mines, which, in turn, are faced with political turmoil in countries such as the Democratic Republic of the Congo.
“The demand for cobalt is massive, and to revive a cobalt project is going to cost you many millions of dollars to explore; the appetite for this commodity is there”.
Opal Mining is currently advancing plans to mine vanadium, coal and platinum-group metals.
In conclusion, CRU Group senior consultant Aleksander Popovic cited the battery market as a “bullish story for cobalt, vanadium and for light acid batteries”.
“There is no question about the market for batteries going bigger than what it is today, but there are going to be different types of batteries that will cater for different types of needs,” he said
This, Popovic stated, will result in all of these commodities and technologies getting some share of the market.