Benzinga - by Matt Whittaker, Mining Editor.
WASHINGTON — Lithium prices could rise by more than 60% to hit $20,000 per metric ton, privately held mining exploration and services company GeoXplore Corp.'s CEO Clive Ashworth said at a mining conference this month.
After reaching a record around $80,000 per metric ton in China in 2022, lithium carbonate prices have profoundly slumped amid tempered expectations for global electric vehicle demand. Recent prices were around $12,500.
That price is too low to sustain mine production and will get to $15,000 to $20,000 per metric ton over the next two years, Ashworth told Benzinga on the sidelines of a recent Benchmark Mineral Intelligence battery metals conference in Washington, D.C. A move from $12,500 to $20,000 would be a 62.5% gain.
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In a November 2023 blog post, Morningstar analyst Seth Goldstein said he views $20,000 as the marginal cost of production based on all-in sustaining costs.
Low prices are not ideal for producers whose margins shrink as prices decline, or explorers who are less able to secure financing for drilling in lower-price environments.
But low prices aren't all bad for the industry as a whole, as they can lead to a weeding out of weak companies.
"They knock out the chaff," he said.
Ashworth is no stranger to the lithium market. His company has optioned lithium claims in Nevada to Pure Energy Minerals Ltd. (OTC:PEMIF) and ACME Lithium Inc. (OTC:ACLHF).
GeoXplor's business model is to find properties that could be developed into producing mines, lease them and then option the claims to junior mining companies who will carry on more intensive exploration, which could include the use of GeoXplor's services.
That model—which involves getting out to a property with handheld equipment used to evaluate its potential—means the company needs to lease properties that contain minerals that will be in demand in the future.
"As exploration people, we have to get ahead of the commodities," he said.
One commodity Ashworth has his eye on is vanadium. It's often used in stainless steel, but it is also an ingredient in an emerging type of battery technology Ashworth thinks will get traction.
Although there are technologies that will eventually begin competing with lithium in certain applications, Ashworth said he sees the demand for lithium remaining strong for decades.
"Lithium is here to stay, at least for the next 20 or 30 years," he said. "We're in the beginning of a new age here. It's the end of fossil fuels."
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Image created using artificial intelligence via Midjourney.
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