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