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Metals & Mining Theme, Non-Ferrous
December 17, 2024
HIGHLIGHTS
Expansion comes amid weak lithium markets
Chinese lithium prices to remain rangebound in near term
China's leading lithium producer, Ganfeng Lithium, kicked off the first phase of its Goulamina lithium project in Mali on Dec. 15, expanding its footprint in the African country at a time when lithium markets have been facing a supply glut.
Ganfeng said in a statement late Dec. 16 that the first phase of the Goulamina project boasts a production capacity of 506,000 mt of spodumene per year. The company plans a second phase that would double the mine capacity to 1 million mt/year.
Ganfeng's expansion comes at a time when several mining operations have either scaled back production or paused expansion plans due to declining global lithium salt prices amid a supply surplus.
Ganfeng said the project initiated its crushing product line and completed the final stages of its dressing product line in late September.
The Goulamina mine is estimated to contain lithium oxide reserves totaling 211 million mt, with an average grade of 1.37%. This equates to approximately 7.14 million mt of lithium carbonate equivalent.
The first phase of the Goulamina project is anticipated to boost Ganfeng Lithium's supply chain by providing a steady and high-quality source of lithium resources.
As competition intensifies within the lithium-ion battery industry, driven by a projected increase in demand for battery metals due to the rise of electric vehicles and energy storage solutions, a consistent supply of upstream ore resources is crucial.
Despite the current downward trend in global lithium salt prices, Ganfeng Lithium has sought to secure deals and projects with upstream capabilities, including hard rock lithium ore, brine, lithium clay and recycled materials.
Looking ahead, Ganfeng Lithium said it aims to achieve a lithium carbonate equivalent production target of a minimum of 600,000 mt/year by 2030 in response to anticipated growth in downstream demand.
In the short term, Chinese lithium salt prices are expected to remain rangebound, as domestic supply remains robust while downstream consumers purchase on a need basis as the year ends.
Platts, part of S&P Global Commodity Insights, assessed battery-grade lithium carbonate at Yuan 75,000/mt ($10,296/mt) on a DDP China basis on Dec. 16, down Yuan 4,000/mt from a month earlier.
Market participants expect the spot market in China to remain quiet in the next two weeks, with only sporadic procurement taking place before the Lunar New Year holidays in January 2025.
Regarding lithium carbonate supply, sources reported that monthly production of lithium carbonate rose by about 10% month over month in November, and supply is expected to increase further in December due to the resumption of production at some domestic refineries.
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