Prospect Resources narrows the lithium supply gap

Europe will need three times its current lithium supply by 2030 to meet surging demand for electric vehicle batteries, placing it at risk of deficits unless new sources are found.

Europe will need three times its current lithium supply by 2030 to meet surging demand for electric vehicle batteries, placing it at risk of deficits unless new sources are found.

Already, electric vehicles comprise 20% – 50% of all new vehicle sales across the continent, and Sam Hosack, Managing Director of lithium miner Prospect Resources (ASX: PSC), highlighted this market segment will continue to grow.

“As of 2021, Europe is the largest consumer of electric vehicles. Previously that was held by China. That’s largely driven by green energy policy,” he said on Reach Markets’ fortnightly The Insider: Meet the CEOs webcast.

“With bottlenecks in the supply chain and demand continuing to rise during 2020, the lithium market quickly moved from balance and into a supply shortage.”

Mr Hosack expects this shortage will drive a lithium boom over the coming decades.

“From 2022 onwards, we’re going to start to see massive gaps in lithium supply. While there has been some consolidation in the last few years – we’ve seen increased mergers and acquisition activity in the sector.” he said.

Prospect Resources’ key asset, the Arcadia Lithium Project, is one of the most well-developed lithium projects in Africa. 

Located close to Harare, the capital of Zimbabwe, the mine has easy access to established road networks and infrastructure including power and water. 

The project has also benefited from a number of government incentive programs in Zimbabwe.

“In the last three to four years we’ve seen a massive transformation from the Zimbabwean government. We’re starting to see a real positive and engaging attitude to investors such as ourselves,” Mr Hosack.  

The Arcadia Lithium Project is unique in that there are two lithium-bearing minerals available to mine. They have applications not only in the electrical vehicle market but also the glass ceramics industry.

“The glass ceramics market pays a premium over the price paid by the battery sector,” Mr Hosack said. 

“There’s a massive reduction in our costs by utilising both minerals. For us it’s a key differentiation and a massive opportunity we feel for our shareholders, and our industry competitiveness.” 

Mr Hosack believes these signs all point to a “massive commodity upswing” which are expected to come over the coming decades.

 “We see this as a real long-term play with some very short-term and immediate goals that we need to achieve,” he said. 

“This is all in service of allowing us to increase our seed to commercial production, and to complete the project funding.” 

Currently, the company’s main goal is to complete the pilot plant project through its staged development – of which 70% is already complete. 

“We’re in a very strong position. There is a supply shortage and Prospect is in a position to take advantage of this rising market,” Mr Hosack said. 

Mr Hosack recently joined us for our fortnightly webcast ‘The Insider: Meet the CEOs’. This article summarises some of the information he shared with us during the session. You can watch a full recording below, or you can click here to book into our next session.


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