TELF AG explores Australian potential in the lithium sector

Natural abundance

Over the last few years, Australia’s position in the global lithium market has progressively acquired a specific weight of importance, in particular due to the natural abundance of this raw material in the western portion of the Australian territory. It is certainly not the first time that we have heard of lithium coming from this part of the world: at the moment, around half of global supplies of raw lithium depend on Australia, but its strategic importance in this particular sector could be destined to grow further, particularly in the short and medium term. 

In order to give an idea of the Australian prospects linked to lithium, it will be sufficient to cite data contained in a report prepared by an Australian economist: the study states that the value of lithium exports in the next five years could exceed that of coal, which for several years has played a role of considerable importance in the mechanisms of the Australian economy. 

Among the most interesting aspects, from this point of view, is certainly the fact that Western Australia, after having represented for years an excellent source of extraction for raw materials such as gold, nickel, and ferrous minerals, is now finding a renewed centrality due to its abundance of lithium, which in all respects represents one of the resources most involved in the global energy transition (and not only for its use in the production of batteries for electric vehicles). 

Over the course of the last few months, not entirely surprisingly, some portions of Australian territory have, in fact, begun to stand out for the fervent mining activity taking place within them, in particular with regard to the attempts to acquire those areas in which the lithium is more concentrated. Some of these dynamics seem closely reminiscent of what happened in Australia in the 1960s or 1970s when various international players began to set their sights on the reserves of nickel and iron minerals present in its subsoil. Something similar is happening today, but with a clear difference: what drives multinationals to dedicate themselves to Australian lithium reserves is the driving force of the global energy transition, of which lithium is one of the major protagonists. 

A rather eloquent signal, from this point of view, arrived last September when the American company Albermarle found itself on the verge of acquiring Liontown Resources, an Australian producer specialized in minerals for batteries. The acquisition was later canceled due to the unexpected inclusion of Australia’s richest person, Gina Rineheart, who surprisingly built a 19.9% acquisition in the Liontown project. One of the most interesting aspects, in this sense, is that the rush for Australian lithium is attracting the attention of global players, even local small-scale explorers, in the belief that as time passes, new opportunities can always open up in this specific sector. 

The enthusiasm characterizing the race for Australian lithium has been rather surprising for many observers, for the peculiar economic situation that characterizes this raw material: lithium prices have recently suffered collapses of up to 70%, a truly singular if we consider the peaks recorded the previous year. These declines – also caused by the decline in expectations on the demand for electric vehicles in some nations such as China – do not, however, seem destined to extinguish the interest shown by global players in Australia’s lithium, particularly if the discovery of new reserves were to continue to repeat itself with a certain regularity.