You are currently viewing Tianqi Lithium executive expects more industry mergers and acquisitions

Tianqi Lithium executive expects more industry mergers and acquisitions

Tianqi Lithium, a major lithium producer, anticipates further industry consolidation following the recent merger between Allkem Ltd and Livent Corp. The consolidation in the lithium sector has been fueled by the growing demand for the metal in electric vehicle batteries, which is projected to increase significantly by 2030 due to the energy transition.

In response to the surging demand from the electric vehicle battery industry, global companies have been actively seeking to secure lithium ore. This increased demand has led to a significant rise in lithium prices, which increased over 10 times between late 2020 and late 2022. Yasmin Liu, the executive vice president and chief integration officer at Tianqi Lithium, highlighted the industry’s anxiety to develop sufficient lithium material during a seminar. The expansion of lithium carbonate processing capacity, particularly in China, has outpaced the limited growth in lithium ore supply.

According to a report by Susan Zou, an analyst at Rystad Energy, mergers and acquisitions in the lithium value chain have allowed companies to save on capital spending and accelerate project development. This is particularly important for lithium producers as prices are declining and the long-term supply of lithium remains uncertain. Fastmarkets data shows that spot lithium carbonate prices reached an 18-month low in April, dropping 72.4% from the record high in November. However, prices have since rebounded to 245,000 yuan per tonne as buyers with low stockpiles took advantage of the cheaper material.