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Zhuhai, Guangdong, China
12th World InBiGeGa Forum
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Zhuhai, Guangdong, China
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Interview with Peter Oliver, Chief Executive Officer and Managing Director of Talison Lithium Limited
Talison Lithium is a leading global producer of lithium and is listed on the Toronto Stock Exchange (TSX Code: TLH).
Talison Lithium’s headquarters are in Perth, Western Australia and the Company has over 140 employees located in Australia, Canada, Chile and China.
Talison Lithium currently produces lithium concentrate at its lithium mineral project in Western Australia located in the town of Greenbushes. The lithium orebody at Greenbushes is unique in that it contains large zones of high grade lithium ore. Lithium has been produced from the Greenbushes operations for over 25 years and Talison Lithium currently exports over 350,000 tonnes of lithium products annually to a global customer base.
Peter Oliver: Potentially promising lithium applications in new energy areas help double our lithium concentrates capacity
----Interview with Peter Oliver, Chief Executive Officer and Managing Director of Talison Lithium Limited
Asian Metal: Thank you for accepting this interview. Congratulations on your new expansion project!
Peter Oliver: Thank you very much. The expansion has been running for around two months successfully. We’re thrilled with the completion back in June which was on schedule and within budget, and as I’ve said a few times, this is testament to the strength and expertise of the Talison team.
Asian Metal: Our numerous readers would like to get to know more about Talison Lithium Limited. Would you like to introduce your company briefly?
Peter Oliver: Talison is a leading global producer of lithium and has been supplying a global customer network from the Greenbushes Lithium Operations in Western Australia for over 25 years. In anticipation of sustained growth in lithium consumption, driven primarily by the secondary lithium battery market, Talison has recently doubled its production capacity at the Greenbushes Lithium Operations.
The lithium mineral ore body at Greenbushes is the highest grade in the world, at a grade of 3.1% Li2O. In comparison, most other lithium mineral ore bodies are around 1% Li2O. Greenbushes also has a very long mine life, currently 22 years based on Talison’s newly expanded production capacity.
In addition to Talison’s current production from Greenbushes, the Company is advancing several growth projects including a lithium carbonate plant in Western Australia.
Asian Metal: Please introduce the overall situation of the expansion at Greenbushes.
Peter Oliver: When we began lithium processing at the Greenbushes site in 1983, we were producing lithium concentrate principally for the glass and ceramics industry, this is what we now call “conventional applications”. Since then, we have watched the lithium industry diversify and grow dramatically; particularly in the past decade and now Talison supplies a large amount of lithium concentrate for “new and emerging technologies” such as lithium-ion batteries.
Talison’s belief is that lithium will be a major part of the world’s energy future and so we have built a large expansion at Greenbushes in expectation of a growing demand for lithium concentrate into the future.
The expansion will also provide high quality feedstock for Talison’s own lithium carbonate plant.
Asian Metal: Why do you decide to produce lithium salts instead of selling spodumene solely?
Peter Oliver: As you are aware, Talison is currently undertaking an engineering study into the construction of our own lithium carbonate plant in Australia. The reason Talison is considering the production of lithium carbonate is firstly, to enable Talison to grow its revenue and thus bring further value to shareholders. Secondly, adding to Talison’s product range in the form of lithium carbonate will enable us to provide a secure supply of lithium to customers outside of China. This will provide these customers with confidence that lithium will be available to support the expected future growth in demand.
Asian Metal: Could you tell us some of your plans of lithium salts production, such as what products are you aiming to produce, lithium carbonate or lithium hydroxide, etc.? What is the planned capacity?
Peter Oliver: Talison is continuing to advance its plan to develop a plant to convert lithium concentrate into lithium carbonate. The engineering study is now well underway and we have a location selected in the Kwinana industrial Area, near Fremantle Port in Western Australia. The planned capacity for stage one is production of 20,000 tonnes per annum lithium carbonate. We are targeting production of lithium carbonate from stage one to commence in 2015. There are other products that can be produced over and above lithium carbonate, for example as you mentioned lithium hydroxide, used in battery production, however in the initial stage Talison is focusing only on the production of lithium carbonate.
Asian Metal: What’s the market advantage of producing lithium carbonate in Australia versus in China?
Peter Oliver: Talison believes that it will be able to produce lithium carbonate competitively from a plant located in Australia. In Australia there are higher environmental standards and higher labor costs per person than in China. However, Talison intends to use natural gas not coal as the major energy source and we are planning to build a very automated plant, which will reduce labor costs. In addition, the other advantage Talison has is that we own the mine and will not have the same cost to transport spondumene to a plant in China.
Asian Metal: What’s the technique do you plan to adopt to lithium salts production? Is it sulfuric acid method?
Peter Oliver: Yes, Talison intends to use the sulphuric acid method, similar to the current Chinese plants converting lithium concentrate to lithium carbonate. As we are currently undertaking our engineering study I cannot say any more about the process at the moment.
Asian Metal: It has been reported Talison raised chemical grade spodumene price to USD310-320/t from early July. Do you see any further price hike in the horizon?
Peter Oliver: Our production result update for the fourth fiscal quarter, released in July, reported an average sales price per tonne of lithium concentrate of US$334, a 9% increase over the same period last year. This price is an average over both our technical and chemical grade products for which we don’t disclose the breakdown. With our customers we review chemical grade contracts and pricing every 6 months, and in July we announced we had agreed a 10% price increase for the 6 months ending December 2012. Together with the December 2011 announcement of a 15% increase, this represents an overall increase of 25% for our chemical-grade products for calendar year 2012.
Therefore, that’s a little background on our recent pricing. Our stance on pricing is that we believe that the long-term viability of the lithium market is best achieved by product prices that enable existing producers to justify capital expenditure to maintain a stable, secure and growing supply of lithium, and Talison intends to pursue a pricing strategy for its lithium products on the basis of this objective.
Asian Metal: From the company Annual Report, Talison sold 365,545t of lithium concentrates in the fiscal year of 2012 and China imported about 330,000t of lithium concentrates in calendar year 2011. I guess most of your products are sold to China. Could you inform our readers what’s the proportion of Chinese market accounts for your sales volume?
Peter Oliver: Talison believes that its share of the lithium market in China is around 70-80%. Currently, all of Talison’s chemical-grade lithium concentrates are sold into China, so the Chinese market is important to us.
Asian Metal: What is your short term view of lithium market? How do you see price development for the rest of the quarter?
Peter Oliver: As I’ve stated, we have recently agreed our pricing for chemical-grade lithium concentrate for the balance of 2012. Over the past 6-12 months in the lithium market globally we have witnessed a reduced supply from existing producers in South America due to unfavourable weather conditions. If the global supply of lithium is restricted, then this may result in further price increases.
Asian Metal: How would you relate your experience working in a lithium industry?
Peter Oliver: As I said earlier, the lithium market has changed dramatically, particularly since 2005 with major emerging markets coming online and the mass acceptance of new consumer electronics. I’ve worked with Talison and the lithium industry for 9 years now, which makes me a junior compared to some of the other Talison employees who can safely say they’ve worked with lithium processing for 25 years! They would join me in saying that never has the industry been as exciting as it is now. Talison is a global leader in the production of lithium, and that’s a great spot to be in.
Asian Metal: What are Talison’ plans for the next few years?
Peter Oliver: In terms of milestones, next on the horizon is the completion of our engineering study and the financial investment decision for our lithium carbonate plant. We are targeting completion of this by the end of calendar 2012, with the resulting production target date of 2015.
Talison also aims to continue to work closely with our valued lithium concentrates customers globally by providing a high quality and secure supply of lithium concentrate.
Asian Metal: Are there any other things you want to share with other allied industry players in lithium market, or any suggestion that can help market to improve?
Peter Oliver: Talison is, and remains of the view that lithium will be a major part of the world’s new energy future, not just for mobile electronics such as iPads, but electric vehicles, grid stabilization batteries, and solar storage. The expansion we have recently completed demonstrates Talison’s commitment to this belief and provides these new industries with confidence that lithium will be available to support the new energy future.
Peter Oliver: Thank you very much. The expansion has been running for around two months successfully. We’re thrilled with the completion back in June which was on schedule and within budget, and as I’ve said a few times, this is testament to the strength and expertise of the Talison team.
Asian Metal: Our numerous readers would like to get to know more about Talison Lithium Limited. Would you like to introduce your company briefly?
Peter Oliver: Talison is a leading global producer of lithium and has been supplying a global customer network from the Greenbushes Lithium Operations in Western Australia for over 25 years. In anticipation of sustained growth in lithium consumption, driven primarily by the secondary lithium battery market, Talison has recently doubled its production capacity at the Greenbushes Lithium Operations.
The lithium mineral ore body at Greenbushes is the highest grade in the world, at a grade of 3.1% Li2O. In comparison, most other lithium mineral ore bodies are around 1% Li2O. Greenbushes also has a very long mine life, currently 22 years based on Talison’s newly expanded production capacity.
In addition to Talison’s current production from Greenbushes, the Company is advancing several growth projects including a lithium carbonate plant in Western Australia.
Asian Metal: Please introduce the overall situation of the expansion at Greenbushes.
Peter Oliver: When we began lithium processing at the Greenbushes site in 1983, we were producing lithium concentrate principally for the glass and ceramics industry, this is what we now call “conventional applications”. Since then, we have watched the lithium industry diversify and grow dramatically; particularly in the past decade and now Talison supplies a large amount of lithium concentrate for “new and emerging technologies” such as lithium-ion batteries.
Talison’s belief is that lithium will be a major part of the world’s energy future and so we have built a large expansion at Greenbushes in expectation of a growing demand for lithium concentrate into the future.
The expansion will also provide high quality feedstock for Talison’s own lithium carbonate plant.
Asian Metal: Why do you decide to produce lithium salts instead of selling spodumene solely?
Peter Oliver: As you are aware, Talison is currently undertaking an engineering study into the construction of our own lithium carbonate plant in Australia. The reason Talison is considering the production of lithium carbonate is firstly, to enable Talison to grow its revenue and thus bring further value to shareholders. Secondly, adding to Talison’s product range in the form of lithium carbonate will enable us to provide a secure supply of lithium to customers outside of China. This will provide these customers with confidence that lithium will be available to support the expected future growth in demand.
Asian Metal: Could you tell us some of your plans of lithium salts production, such as what products are you aiming to produce, lithium carbonate or lithium hydroxide, etc.? What is the planned capacity?
Peter Oliver: Talison is continuing to advance its plan to develop a plant to convert lithium concentrate into lithium carbonate. The engineering study is now well underway and we have a location selected in the Kwinana industrial Area, near Fremantle Port in Western Australia. The planned capacity for stage one is production of 20,000 tonnes per annum lithium carbonate. We are targeting production of lithium carbonate from stage one to commence in 2015. There are other products that can be produced over and above lithium carbonate, for example as you mentioned lithium hydroxide, used in battery production, however in the initial stage Talison is focusing only on the production of lithium carbonate.
Asian Metal: What’s the market advantage of producing lithium carbonate in Australia versus in China?
Peter Oliver: Talison believes that it will be able to produce lithium carbonate competitively from a plant located in Australia. In Australia there are higher environmental standards and higher labor costs per person than in China. However, Talison intends to use natural gas not coal as the major energy source and we are planning to build a very automated plant, which will reduce labor costs. In addition, the other advantage Talison has is that we own the mine and will not have the same cost to transport spondumene to a plant in China.
Asian Metal: What’s the technique do you plan to adopt to lithium salts production? Is it sulfuric acid method?
Peter Oliver: Yes, Talison intends to use the sulphuric acid method, similar to the current Chinese plants converting lithium concentrate to lithium carbonate. As we are currently undertaking our engineering study I cannot say any more about the process at the moment.
Asian Metal: It has been reported Talison raised chemical grade spodumene price to USD310-320/t from early July. Do you see any further price hike in the horizon?
Peter Oliver: Our production result update for the fourth fiscal quarter, released in July, reported an average sales price per tonne of lithium concentrate of US$334, a 9% increase over the same period last year. This price is an average over both our technical and chemical grade products for which we don’t disclose the breakdown. With our customers we review chemical grade contracts and pricing every 6 months, and in July we announced we had agreed a 10% price increase for the 6 months ending December 2012. Together with the December 2011 announcement of a 15% increase, this represents an overall increase of 25% for our chemical-grade products for calendar year 2012.
Therefore, that’s a little background on our recent pricing. Our stance on pricing is that we believe that the long-term viability of the lithium market is best achieved by product prices that enable existing producers to justify capital expenditure to maintain a stable, secure and growing supply of lithium, and Talison intends to pursue a pricing strategy for its lithium products on the basis of this objective.
Asian Metal: From the company Annual Report, Talison sold 365,545t of lithium concentrates in the fiscal year of 2012 and China imported about 330,000t of lithium concentrates in calendar year 2011. I guess most of your products are sold to China. Could you inform our readers what’s the proportion of Chinese market accounts for your sales volume?
Peter Oliver: Talison believes that its share of the lithium market in China is around 70-80%. Currently, all of Talison’s chemical-grade lithium concentrates are sold into China, so the Chinese market is important to us.
Asian Metal: What is your short term view of lithium market? How do you see price development for the rest of the quarter?
Peter Oliver: As I’ve stated, we have recently agreed our pricing for chemical-grade lithium concentrate for the balance of 2012. Over the past 6-12 months in the lithium market globally we have witnessed a reduced supply from existing producers in South America due to unfavourable weather conditions. If the global supply of lithium is restricted, then this may result in further price increases.
Asian Metal: How would you relate your experience working in a lithium industry?
Peter Oliver: As I said earlier, the lithium market has changed dramatically, particularly since 2005 with major emerging markets coming online and the mass acceptance of new consumer electronics. I’ve worked with Talison and the lithium industry for 9 years now, which makes me a junior compared to some of the other Talison employees who can safely say they’ve worked with lithium processing for 25 years! They would join me in saying that never has the industry been as exciting as it is now. Talison is a global leader in the production of lithium, and that’s a great spot to be in.
Asian Metal: What are Talison’ plans for the next few years?
Peter Oliver: In terms of milestones, next on the horizon is the completion of our engineering study and the financial investment decision for our lithium carbonate plant. We are targeting completion of this by the end of calendar 2012, with the resulting production target date of 2015.
Talison also aims to continue to work closely with our valued lithium concentrates customers globally by providing a high quality and secure supply of lithium concentrate.
Asian Metal: Are there any other things you want to share with other allied industry players in lithium market, or any suggestion that can help market to improve?
Peter Oliver: Talison is, and remains of the view that lithium will be a major part of the world’s new energy future, not just for mobile electronics such as iPads, but electric vehicles, grid stabilization batteries, and solar storage. The expansion we have recently completed demonstrates Talison’s commitment to this belief and provides these new industries with confidence that lithium will be available to support the new energy future.