Rise of lithium not seen threatening nickel demand

By Luisa Maria Jacinta C. Jocson, Reporter

THE increasing use of lithium in the production of electric vehicles (EV) is not expected to threaten demand for nickel, which is one of the Philippines’ major minerals, with industry officials calling the two metals complementary.

“We’re not worried about the development of lithium because lithium can be complementary to nickel but nickel is still the preferred metal for use in cathodes. All cathodes store energy (and) nickel (has) high energy density,” Rocky G. Dimaculangan, vice-president for communications of the Chamber of Mines of the Philippines, said in a phone interview.

According to the International Energy Agency, an electric car has six times the mineral content as a conventionally fueled car. 

Most batteries used in EVs are lithium-ion batteries that depend on key minerals like cobalt, nickel, graphite, and manganese, among others.

“Nickel can be used in combination with cobalt, manganese, aluminum and also lithium. Nickel will not be replaced,” he added.

In 2021, nickel-based cathodes powered 80% of the battery capacity deployed in new plug-in EVs.

The Philippines accounted for a quarter of mined nickel production in Asia in 2021, according to S&P Global.

The lithium industry is expected to post strong growth amid rising demand from EV manufacturers, according to a report by Fitch Solutions.

“The outlook for the lithium sector on a 10-year horizon is very upbeat, amid fast production and demand growth and plenty of opportunities across a variety of markets,” the report said.

“In fact, the backdrop for lithium, used mainly in lithium-ion batteries for electrification in transportation and grid storage, is as bright as ever, as we are witnessing since 2020 a clear acceleration towards decarbonization, which will be achieved to a great extent via the electrification of autos and energy storage,” it added.

The study found the lithium industry to be fast-growing, fast-evolving and subject to key changes in the coming years as demand and price fundamentals improve.

“The lithium market is seeing the emergence of many new players across a variety of regions, from a geographical production and consumption perspective, as well as from a competitive landscape perspective. Constant technological advancements in the supply and demand sides pose risks to the market outlook,” it said.

“Meanwhile, lithium is now considered a strategic mineral, which will lead to rising government intervention, in its production and sourcing,” it added.

It forecast global lithium production to nearly quadruple between 2022 and 2031, posting 13.6% growth annually over the period.

“Well-established lithium-producing markets will record further growth, while a number of new lithium-producing markets will emerge in the next 10 years,” according to the report.

It said annual lithium consumption by the EV industry is expected to triple between 2022 and 2031 while annual EV sales will grow to 30.3 million units from 11.4 million.

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