Make Kitco Your Homepage

Lithium's advantage over gold - Exploration Insights' Joe Mazumdar on funding critical metal projects

Kitco News

Editor note Get all the essential market news and expert opinions in one place with our daily newsletter. Receive a comprehensive recap of the day's top stories directly to your inbox. Sign up here!

(Kitco News) - While some types of lithium mining can be relatively easy, processing the ore can be a challenge, said Joe Mazumdar, editor and analyst of Exploration Insights.

Mazumdar spoke to Kitco in mid-May.

Mazumdar surveyed the different types of lithium projects: brines, clays and hardrock. He noted that clay projects can be challenging.

"Clay has been held back a while not because of the mining, but because of the metallurgy," said Mazumdar, noting that it may be easy to find clay deposits, but lithium is bound to the rock in "...a way that makes it harder to actually extract so it's going to drive up costs."

Mazumdar noted that lithium prices dropped substantially in 2023, but the selloff has not been surprising. Battery-grade lithium carbonate prices tumbled 72% after China curbed EV subsidies in January, noted Reuters.

"Everybody I talked to when I was looking at lithium last year was expecting a drop in the lithium
carbonate-equivalent prices and that happened—probably a little bit more severe than some people thought," said Mazumdar, adding that lithium still looks good since the energy transition is still in early innings.

Mazumdar noted that large lithium projects in the United States, such as Lithium Americas, has a funding advantage over precious metals due to government support and automakers investing in the sector to secure supply. Earlier this year, Ford made a $650 million investment in Lithium Americas, which is advancing its Thacker Pass project in Nevada.

Disclaimer: The views expressed in this article are those of the author and may not reflect those of Kitco Metals Inc. The author has made every effort to ensure accuracy of information provided; however, neither Kitco Metals Inc. nor the author can guarantee such accuracy. This article is strictly for informational purposes only. It is not a solicitation to make any exchange in commodities, securities or other financial instruments. Kitco Metals Inc. and the author of this article do not accept culpability for losses and/ or damages arising from the use of this publication.