'Increasingly difficult to justify' - iLiMarkets' Daniel Jiminez on lithium producer expansion

Slowing electric vehicle sales and new tech are both contributing to lithium sector woes, said Daniel Jimenez, partner at iLiMarkets. Last week Jimenez spoke to Kitco Mining. iLiMarkets is a business consulting firm, specialized in the lithium industry. Jiminez worked 28 years at SQM, one of the world's biggest lithium producer. Jiminez was responsible for production and commercialization of lithium carbonate and lithium hydroxide to Asia, Europe and North America, as well as developing SQM's commercial offices. After the lithium market was up 10x at the start of the decade, the market is now experiencing a downturn. Prices have fallen 80% over the past two years. Overcapacity and declining electric vehicle sales have led to a significant drop in lithium prices.Jiminez said there are other factors adding to depressed lithium prices: increasing popularity of plug-in hybrid electric vehicles, which have smaller batteries than full EVs, and growing use of LFP cathode material, which requires less lithium than NMC.Some of the large lithium giants are cutting. Lithium giant Albemarle announced job cuts deferred spending. Other miners have been expanding despite the slump. SQM is ramping up its refinery in northern Chile. The investment would take the facility to 300,000 tons, according to Reuters. In August Pilbara Minerals announced plans to acquire Latin Resources for $369 million. Jiminez was critical of the West's efforts to build its own critical mineral supply chain, namely through Biden''s two-year old Inflation Reduction Act. Focusing on developing battery manufacturing capabilities is crucial for establishing a competitive supply chain.Disclaimer: The views expressed in this podcast 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 podcast do not accept culpability for losses and/ or damages arising from the use of this publication.