New challenges for lithium-ion battery manufacturers: financing difficulties?

Following the high-nickelization and the recycling of power lithium batteries, lithium-ion battery manufacturers have encountered a new challenge: lack of funds. With the surge in demand for new energy vehicles, 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 provide funds for 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 of 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 as far as banks are concerned, 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 demand side of lithium, 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 regarding the lithium industry. They cited the bad cases in the early days of the industry as examples, especially those 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 processor 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 rising battery demand. But so far, the project has not received enough funds to achieve this goal. NemaskaLithiumInc. CEO Guybourassa said that battery processors and car manufacturers have no 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 production 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-ion batteries in northern Argentina in 2015, but the lack of funding made it difficult to increase production and lack of funding. Delayed the original project development process. He said: 'Because these projects are not easy to carry out, so the banks do not want to invest.' The Commonwealthbank of Australia (Commonwealthbank of Australia) stated in an August report that part of the reason for the financing difficulties of lithium battery companies is actually that lenders are worried 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.