By James Attwood
Chile, the second largest lithium supplier, expects to lose more market share to Australia and Argentina over the next decade, relegating it to third place in the world lithium production ranking.
According to a report released Tuesday, state-run Cochilco forecasts that Chilean production of the key ingredient in electric car batteries will double by 2035 to 336,000 tonnes, while Argentina will increase to 415,000 tonnes.
Much of the additional capacity cited in the report will be built later this year at operations run by SQM and Albemarle Corp, raising concerns about the pace of growth in brine projects.
To be sure, Cochilco’s figures only cover SQM and Albemarle expansions and potential production by Codelco-led companies in the Maricunga salt flat.
Future public-private projects under the government’s new model for the industry could swell the figures.
In the short term, Cochilco believes that the lithium market will remain relatively tight over the next year before moving into surplus as new supply comes on board after rising prices over the past two years.
However, the first half of the 2030s will be characterized by a growing deficit, it predicted.
While Chile’s projections for the next few years are broadly in line with other forecasters, its longer-term outlook is less bullish than those of BMI and S&P Global, which project significant deficits by 2030.
Industry demand for electric vehicles is forecast to grow steadily at an average of 16% annually through 2035 as the world moves away from fossil fuels, according to Cochilco’s presentation.
With information from Bloomberg
News Chile, English news Chile, Chilean lithium