Lithium prices surged in 2021, but new technology should help alleviate supply issues, said Ken Hoffman, Co-Head EV Battery Materials Research Group/Basic Materials, Senior Expert at McKinsey & Company.
Hoffman spoke to Kitco on Friday.
Since the lithium trough in 2020, prices for spodumene concentrate are up 500% and BG lithium carbonate gained 700%.
Miners are keen to supply the market but some have faced challenges from local communities. Ioneer's and Lithium Americas' projects in North America are both facing backlash due to habitat concerns. Rio Tinto had to write down its $2.4 billion Jadar lithium project in Serbia after its license was revoked.
But Hoffman said that new tech is reducing lithium's footprint.
"There's a lot of money flocking into the lithium industry right now for new supply to come on. Some new technologies are coming onto the market that are really exciting and will do a number of things: they'll increase production capacity, and they'll drop the cost of production, and they'll be better for the environment," said Hoffman.
"With the mining industry, in general there is a lot of reticence for local communities to want mines built. These new technologies should have much smaller footprint."
Ken, 2021 was a pivotal year for battery metals. What was the highlight event for you? Serious money investments by the major car manufacturers, shifting consumer sentiment or high battery metal prices?
0:20 - Most significant event in battery metal space in 2021.
1:10 - Major EV investments by major automakers.
2:10 - How will Russian sanctions impact battery metal space?
3:00 - How tech can help lithium supply constraints
4:40 - Given M&A action last year, Australia is much more bullish on the whole battery metal space compared to North America?
5:40 - Do we lack capacity mid-stream for developing nickel mines in Canada? If we start mining it, do we also lack the ability to process the ore in the amounts needed?
7:55 - How does a retail investor navigate battery metals? I hear a lot throw up their hands and just invest in copper.
10:45 - Now, Ken. You go a long way back with Kitco and used to help us out with precious metals before you specialized with EVs. Any parting thoughts on gold? The metal hit a 20-month high?