Lithium Prices to Drop in 2023

This week in mining: Lithium price will drop in 2023, which may benefit electric vehicle makers. On the back of a halt in concession granting for mining, the investment in exploration works grew 28.2 percent in 2022. 

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2022: A Year Full of Uncertainty and Challenges
 

Mexico's mining industry faced multiple challenges in 2022 that affected its performance and earnings. Experts say that even though Mexico continues to host key mining projects, uncertainty is expected to linger throughout next year. In addition, experts warned of the main problems that mining companies will face in 2023.

Investment Counters Lack of Concessions

Due to President López Obrador's policy of not granting new mining concessions, companies operating in Mexico have increased their exploration works in the already granted territories. The industry reports that the energy transition will pressure them since certain minerals will face more demand in the coming years.

Lithium Sees 25 Percent Price Drop

After two years of high prices, lithium is expected to become cheaper, benefiting electric vehicle producers. The drop in prices will be driven by the emergence of more supply. Wang Pingwei, President, Sinomine Resource Group, predicts a drop of over 25 percent from current levels. 

Financial Guarantees for the Closure of Mines

Adrián Juárez, CEO, CTA Consultoría y Tecnología Ambiental, says that it is challenging for companies to restore the land after a mining project is completed since they need to restore endemic flora the damages in surrounding areas, as well as prevent chemical contamination. this process could be risky for companies as mineral prices could affect their cashflows or their main exploitation plans could be altered. 

Lithium Production to Grow 80 Percent in 2024

In a recent research report, the Australian Government’s Department of Industry, Science, Energy and Resources (DISER) said world lithium production is forecasted to double in 2024 surpassing 1 million tons. However, despite this increase, it might not be sufficient to meet the demand for the mineral.

Tesla, Piedmont Amend Deal Over Lithium Supply

The US-based lithium producer Piedmont Lithium agreed to deliver 125,000t of lithium concentrate to Tesla beginning in 2H23 through the end of 2025. Piedmont believes this agreement reflects the importance and growing demand for a North American lithium supply chain.