The market for lithium is growing rapidly, driven by a rising need for renewable energy and strong demand for green mobility. The European electric vehicles (EV) production alone is expected to grow 22% per year until 2035. Push policies of leading industry nations as well as announcements of the major automotive manufacturers to only sell EV from 2030 onwards are creating further tailwinds for EV, as is the EU law banning internal combustion engines in passenger cars from 2035. This development drives the required amount of battery-grade lithium hydroxide in the EU market by 2030 to an estimated 600,000 kMT (kilo metric tons). Battery-grade lithium hydroxide is globally the fastest growing lithium chemical product with an average annual growth rate of nearly 25%.
Intelligence in Lithium
AMG will be the first European battery-grade lithium hydroxide producer serving the growing EU cathode material market. The lithium growth strategy of AMG is centered on the company becoming vertically integrated across the entire lithium value chain, from spodumene production at the Mibra Mine in Brazil via production of technical-grade lithium carbonate in Brazil, to production of battery-grade lithium hydroxide. The engineering team of AMG Lithium, a subsidiary of AMG, has more than a decade of operative expertise in the production of battery-grade lithium hydroxide. By 2028 AMG will become the number one supplier for the battery market in Europe with the highest quality and next generation high-performance battery materials.
AMG currently operates its spodumene processing plant in Brazil. AMG Lithium Brazil is expanding the spodumene production at its mine in Mibra from 90 kMT yearly to 130 kMT annually. The objective is to be at full capacity in the first half of 2023. The current 90 ktpa is sold through long-term offtake agreements through 2028, at which point AMG’s spodumene will be shipped internally to ultimately produce lithium hydroxide. This intermediate step downstream encompasses a technical-grade lithium precursor plant, effectively creating the intermediate product that can later be upgraded to battery-grade lithium carbonate or hydroxide. Bringing this intermediate process in-house is an important step in AMG’s plan to create a full lithium value chain. AMG Lithium Brazil plans for the technical-grade lithium precursor plant to be running in the second quarter of 2026, achieving total independence from the Chinese market. Construction in Brazil is projected to start in June 2024. The target capacity is 16.5 kMT annually.
The next stage of extracting further value from the lithium supply chain comes from AMG’s planned production of battery-grade lithium hydroxide. AMG Lithium is investing 215 million euros in the refinery in Bitterfeld-Wolfen, Saxony-Anhalt in East Germany. Bitterfeld and Wolfen are important chemical sites in Germany. The ground breaking for AMG Lithium’s first European lithium refinery was in May 2022, and commissioning for the first module of the battery-grade lithium hydroxide upgrader will commence in the fourth quarter of 2023. The plant is the first of five planned modules at the site, expanding the capacity to 100 kMT per year by 2028 to serve the growing EU cathode material market. Under AMG’s published plan, Modules 2 and 3 would come online through 2025-2026, followed by Modules 4 and 5 in 2027-2028.