Lithium Investing

VIDEO - Andrew Miller: Lithium Industry Needs More Capital to Support Demand

Andrew Miller of Benchmark Mineral Intelligence says efforts to diversify the lithium supply chain have been slowed by lack of investment.

Interview conducted by Priscila Barrera; article text by Scott Tibballs.

Much more investment is going to be needed in the lithium sector in order for a projected surge in demand for batteries to be met, according to Andrew Miller, who is the head of price assessment at Benchmark Mineral Intelligence.

“The industry is at a point now to meet the demand growth of 2022, 2023, (but) significant amounts of capital need to start going into the market in the next six to 18 months, really, so I think that’s a real challenge for the rest of the world,” he said.

Miller was speaking with the Investing News Network (INN) about securing supply chains and raw materials at the Lithium Supply & Markets Conference in Santiago, Chile.

He said that over the past few years, a lack of investment going into the sector has slowed attempts by countries and operators outside of Asia to develop lithium resources and diversify the supply chain.

“Obviously you do see a push where new electric vehicles are going to be present in markets outside of Asia, and there’s questions about what is the most effective way to manage your supply chain when you’re positioned with downstream capacity outside of China.”

He added that diversifying the sector’s downstream capacity away from China is going to be a continuing issue for the market over the next decade.

On prices, Miller said that trends in 2019 show that demand is continuing to strengthen, while prices are still correcting from 2016 and 2017. “I think the longer-term outlook for the market remains strong.”

He also shared his thoughts on the recently announced London Metal Exchange-Fastmarkets contract.

“We think the lithium industry has an evolution to go through before the introduction of a financial derivative can be useful to the market,” he said.

“We’re still operating in an industry where there’s significant long-term contracts, there’s no formal spot market for lithium at the moment and there’s no accepted industry price. And thats something we’re continuing to work on at Benchmark.”

Watch the video above for INN’s full interview with Miller. You can also click here to watch our full Lithium Supply & Markets Conference playlist on YouTube.

Don’t forget to follow us @INN_Resource for real-time news updates!

Securities Disclosure: I, Scott Tibballs, hold no direct investment interest in any company mentioned in this article.

Editorial Disclosure: The Investing News Network does not guarantee the accuracy or thoroughness of the information reported in the interviews it conducts. The opinions expressed in these interviews do not reflect the opinions of the Investing News Network and do not constitute investment advice. All readers are encouraged to perform their own due diligence.

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The Conversation (1)

Fred Haering

20 Jun, 2019

Andrew Miller’s comments are euphemistic, diplomatic, indeed tactile. The current lithium marketplace is a global show, where West is colliding with East. The entire EV emergence is pitted against ... well China. The long-term contracts by the oligarchic producers are representative of protective measures taken by Titan Fiefdoms. The unified colossal Chinese power focused on State-determined 5-year plans ... well, such powerful forces are comparatively non-existent outside China. The EV market is now entirely Chinese controlled. Battery production, the consumer of end-of-chain elements inputs, is what determines lithium & cobalt prices. Without the kind of open & cooperative lithium trade forum being proposed by the LME, this China-controlled industry will continue. Consumer-age colonisation & conquest is complete now. The market has seen this. So have I. I am pulling the plug as a retail equity investor, as there is less incentive to put money into a clearly-manipulated commodity that will get even more controlled from now on. Game over. China has secured the EV future. The remainder of the world will now squabble over & compete for the remaining battery inputs. Good luck Volkswagen & Northvolt! Good luck GM, Ford. Good luck Panasonic & Honda, Korea, etc. where will you get your inputs when China is approaching 3 million vehicles/year manufacturing levels, with cheaper well-made vehicles composed of China/JV-acquired intellectual property & cheap labour? This cannot end well for everyone, unless China runs the show! A global economy that still finds the “little guy” able to compete, MIGHT happen if such technologies as fusion or hydrogen energy can get stablished before being bought-out or seized & controlled by China’s multiplicity of government investment corporations. How can free-market lithium pricing exist in a free enterprise, capitalist economy, when the profoundly major influencing factor (China) doesn’t operate adherent to such finance, economic & trade paradigms? If each Nation State decided to build batteries for electric cars, then subsidise them, then have really cheap labour inputs to boot, there is NO WAY the could ever compete against this Chinese EV machine. Nobody in the West has ever fully considered yielding individual rights & choices to a hegemonic central planning government probably since German leadership several decades ago. Today, such a powerful force is aided by tightly-harnessed artificial intelligence, information technology, emerging Blockchain & 5G internet. The next Lithium forum MAY well transpire in Beijing. Who will not be present? Game over Andrew...