While opportunities to localize the full lithium supply chain remain limited, producers should instead consider various methods of regionalizing only specific steps of the process to reduce disruptions, Livent CEO Paul Graves said May 13.
"I think regionalization is a great idea and everybody wants to think about regionalization, but the truth is, in an industry like ours, you can't truly regionalize because you are somewhat constrained by the resource and where the resource is located," Graves said during a virtual presentation at the Goldman Sachs Industrials & Materials Conference.
Graves said one link in the supply chain that can be localized is the conversion of feedstock, either spodumene or lithium carbonate, into lithium hydroxide at a facility located near battery production end-users. However, there are various logistics to consider when using different feedstocks and production methods.
"If you're doing it the way we do from lithium carbonate, you have a very different capital need and environmental footprint than shipping spodumene halfway around the world and processing it locally, so there's no simple single answer to the question of what the supply chain looks like," he added.
Regardless, attempting to regionalize even part of the supply chain allows end-users to source lithium "that hasn't traveled three times around the world," the Livent executive said.
Distinct views of supply chain
As more automotive OEMs ramp up electric vehicle production and become more involved in lithium sourcing, Graves said they each have distinct views on how their supply chain should function. He added, however, that recent issues have caused OEMs to look closer at even partial supply localization options.
"The semiconductor debacle has clearly got them all thinking a little bit more," Graves said of the global shortage, "and I think they also fear regulatory intervention perhaps a little bit more as we've heard about carbon taxes around the EU border and what that would mean for materials processed in China using coal-fired power."
"These are all valid questions that they are wrestling with, but there's no single answer."
Ability to adjust is vital
Graves said lithium producers and end-users will need to continue considering different supply chain models and resources to meet needs and adjust to changing market landscapes.
"I will never tell you that one source of lithium is better on an absolute sense than another source, as I think everything has its pros and its cons."
Livent said May 3 it would proceed with completing its 5,000 mt/year lithium hydroxide capacity expansion in Bessemer City, North Carolina, as well as its phase 1 lithium carbonate expansion of 10,000 mt/year in Argentina, according to a statement. The projects, which were paused in March 2020 shortly after the onset of the coronavirus pandemic, are now expected to reach commercial production by late 2022 and early 2023, respectively, the company added.
