Explore the new challenges faced by lithium battery manufacturers
Following the high nickelization and the recycling of power batteries, lithium battery manufacturers have encountered a new challenge: lack of funds. With the surge in demand for new energy vehicles, various manufacturers have gone to raw material producing areas to purchase lithium raw materials.
According to Bloomberg News, Altura Mining Co., Ltd. is hurrying to transport raw materials from Australia to the world's largest electric vehicle market. While lithium prices continue to be high, Brown, the managing director of Altura Mining, is also raising money around the world to fund new lithium mines. Castlelake LP, a private equity firm based in Minneapolis, helped arrange a $110 million bond. But it should be noted that the interest rate for this financing is as high as 15%, which is almost twice the interest rate that banks usually charge traditional mining companies. Brown, who has worked for a coal company for 22 years, said that for banks, lithium projects are not their first choice for financing. If it is a coal, gold or iron ore project, there is no problem in finding financing. Although the world is optimistic about the lithium demand side, with the acceleration of electric vehicle production, the lithium industry will inevitably have financing problems. Regarding the financing of funds, banks still maintain a cautious attitude towards the lithium industry. They cited the bad cases in the early days of the industry as examples, especially in small and opaque markets. Market participants believe that if there is no investment to enter the market, the problem of tight supply of lithium products will still exist, and the prosperity trend that prices have tripled since 2015 will continue. According to the Australian manufacturer Galaxy Resources Ltd. The data show that the company needs to invest about 12 billion U.S. dollars to increase production five times in 2025 and keep pace with the world's growing battery demand. But so far, the project has not received enough funds to achieve this goal.
NemaskaLithiumInc. The CEO Guy Bourassa said that battery manufacturers and automakers do not have a clear idea of u200bu200bhow long a mining project will take to operate. It is reported that the company spent about 18 months investigating a mine and processing plant worth 1.1 billion Canadian dollars (about 830 million U.S. dollars). Richard Sevier, CEO of Orocobre Ltd., headquartered in Brisbane, Australia, stated that the company started to sell lithium batteries in northern Argentina in 2015, but the lack of funding made it difficult to increase production and the lack of funding delayed The original project development process. He said: “Because these projects are not easy to carry out, so the bank does not want to invest.” The Commonwealth Bank of Australia (Commonwealth Bank of Australia) said in an August report that the financing difficulties of lithium battery companies are actually partly due to the lenders’ concerns about commodities. There is a risk of price plummeting, so the lithium industry is still cautious. However, there was no specific comment on the lithium market in the report. According to data compiled by Bloomberg, although the scale of financing including loans and bonds was US$255 billion and project financing was US$13 billion in 2017, it still dropped by more than 70% compared to 2014. This year's data shows that the total amount of projects issued so far is 6.1 billion U.S. dollars.
