Pointers at Glance
- On 8th Mar 2023, BHP Group Ltd reiterated its commitment to expanding its copper and nickel projects while stating that it has no interest in the lithium market, which it believes is sufficiently supplied.
- This announcement follows a decline in lithium prices due to concerns about demand.
- Analysts predict that lithium prices will drop by 25% this year, primarily due to the expected slowdown in China’s EV market as government subsidies are reduced.
Sonia Scarselli of BHP Xlpor, the company’s division that invests in junior mining firms, stated at the Prospectors and Developers Association of Canada (PDAC) mining conference in Toronto, that they still don’t see the demand-supply equation of lithium to be as fundamental as copper and nickel. Lithium will remain flat for them.
This decision is somewhat unusual among BHP Group’s global mining peers. For example, Rio Tinto Ltd purchased a lithium project in Argentina for $825 million in late 2021 and is attempting to build a lithium mine in Serbia. Li-Cycle Holdings Corp, a recycler in which Glencore Plc is the second-largest shareholder, is set to become one of the largest US lithium producers by next year. Sibanye Stillwater Ltd has agreed to assist ioneer Ltd in developing a Nevada lithium project.
Global Nickel and Copper Supplies Will Be Deficient
BHP Group anticipates global copper and nickel supplies will remain below demand since few new mines for either metal are expected to come online soon. To explore nickel and copper deposits worldwide, the company has invested $500,000 each in Nordic Nickel Ltd, Tutume Metals, Asian Battery Minerals, Impact Minerals Ltd, Red Ox Copper, Bronzite Corp, Kingsrose Mining Ltd. It is helping Rio to develop a huge Resolution Copper mining project in Arizona.
BHP has also committed to investing C$12 billion ($8.7 billion) in a potash mine in Canada’s Saskatchewan province as global population growth drives demand for fertilizer.