It’s one of the world’s hottest commodities, and now Rio Tinto wants to join the lithium party.
Prices for lithium are soaring as traditional demand from ceramics and glass manufacturers coincides with rising demand from lithium ion battery and electric vehicle manufacturers.
Lithium prices rose from $US4900 ($6774) per tonne to $US5900 per tonne in the year to October 2015, and since then the price has almost doubled to $US10,000 per tonne.
Citi analyst Matthew Schembri said the onset of the northern winter had crimped production of lithium in China and duly created a shortage, and he predicted the price could continue rising over the next six months.
“Chinese suppliers have been prioritising existing customers on term contracts leading to a very competitive market for any remaining spot material. We see the potential for further spot price upside in the first and second quarter of 2016 before a supply driven retraction in the second half of 2016,” he said in a note.
None of the major diversified miners sell lithium, yet Rio Tinto has declared itself as a potential player in the lithium industry through a lithium-borate project in Serbia.
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