Key Development in Lithium Hydroxide Industry

In 2020, Albemarle Corporation finalized the acquisition of Rockwood Holdings, a well-established market leader in the lithium segment. The strategic move provided significant reinforcement to Albemarle's global presence in the lithium sector. Rockwood Holdings possessed a large lithium unit, i.e., lithium hydroxide that was being used in electric vehicle (EV) batteries at the time. Albemarle had diversified by investing in Rockwood assets to enhance its lithium hydroxide manufacturing capacity, boosting its ability to cope with increased demands from energy storage and the EV sector. Albemarle diversified itself too through an acquisition as it bought the ability to access Rockwood lithium technology know-how-based capabilities, hence establishing itself as a participant in burgeoning lithium activities.

In 2020, China's largest lithium producer, Ganfeng Lithium, bought half of Lithium Americas' 50% Cauchari-Olaroz lithium project in Argentina. The strategic partnership was to create one of the largest and most promising lithium brine projects in the world. Ganfeng acquired a secure long-term high-quality lithium source through the acquisition of a holding in the project, which is crucial to satisfying its increasing demands for battery production, particularly in the electric vehicle sector. The deal also fortified Ganfeng's position in the global market for lithium through greater penetration in South America, which is one of the largest lithium-producing areas. The Cauchari-Olaroz project is expected to boost Ganfeng's lithium production and support its global supply chain in the years to come.

In 2018, Sociedad Química y Minera de Chile (SQM), one of the leading lithium producers, bought 50% of Kidman Resources, an Australian lithium mining company. The acquisition was undertaken to help accelerate the advancement of the Mount Holland lithium project in Western Australia, a significant lithium deposit. The alliance aimed to increase the production of lithium hydroxide, which is needed for the manufacturing of electric vehicle and renewable energy storage batteries. Mount Holland is Australia's best lithium resource, and SQM's participation enabled it to make a commitment to supplying guaranteed quantities of high-quality lithium to its increasing number of customers. The acquisition integrated SQM's international lithium network and cemented its position as a leading player in the high-growth lithium sector.

In 2018, Chinese lithium giant Tianqi Lithium acquired a controlling stake in Chilean lithium giant Sociedad Química y Minera de Chile (SQM), one of the world's top producers of lithium. Tianqi acquired a 24% stake in SQM, becoming a major player in the global lithium industry. The takeover gave Tianqi access to SQM's large lithium resources, particularly in Chile's Atacama Desert, one of the richest sources of lithium brine. The strategic investment allowed Tianqi to secure a stable supply of lithium, which was critical in responding to the growing demand from the electric vehicle and battery sectors. By strengthening its partnership with SQM, Tianqi cemented its foothold on the global market and further enhanced its competitive edge in the rapidly expanding lithium market. Moreover, this acquisition aligned with sustainability goals, as it provided Tianqi with more sustainable access to high-quality lithium resources, which are crucial for powering clean energy solutions and advancing the global transition to electric mobility.

The lithium hydroxide industry has experienced significant growth over the years, driven mainly by its usage across industries. According to Coherent Market Insights, demand for lithium hydroxide has mainly been dictated by its application in lubricant grease, which is expected to be sustained in the coming few years.

The growing global demand for electric cars is primarily behind the application of lithium hydroxide since it is required in making NCA cathodes, which are used in EV batteries. Growing solar photovoltaic installations across the globe, as well as growing needs for high-capacity storage batteries, are driving the market for lithium hydroxide. The development of the automotive industry, particularly in emerging economies, is spurring demand for lithium compounds like lithium hydroxide used in battery production.

Sources:

Company: Albemarle Corporation, Tianqi Lithium