Mining giant BHP Billiton said Wednesday it remains committed to expanding its portfolio of copper and nickel projects, but is not interested in lithium because it believes the market is well supplied.
Sonia Scarselli, vice president of BHP's Xlpor, said the company believes lithium is not as scarce as copper and nickel and that the lithium market will remain flat. Xlpor is a new division of BHP Billiton focused on investing in smaller mining companies.
Lithium prices have been sliding recently on concerns about slowing demand. Analysts expect lithium prices to plunge 25% this year amid an expected slowdown in the main electric vehicle market.
BHP expects global copper and nickel supply to remain below demand, as few new mines for the metals have come on stream recently.
Analysts had expected the global copper market to remain short for several years, largely because of slowing supply in Latin America and rising global demand.
On the nickel side, Indonesia, the world's largest supplier of nickel, has repeatedly imposed bans on mineral exports. Indonesia is the world's largest nickel producer, accounting for 38 per cent of global refined nickel production, according to CRU, a consultancy. Indonesia also has the world's largest nickel reserves, about a quarter of the world's proven reserves.
While BHP is not interested in lithium, its peers are betting on the key battery metal. Rio Tinto bought a lithium project in Argentina for $825 million in late 2021. The company's attempt to develop a $2.4 billion lithium mine in Serbia's Jadar Valley was approved, but was ultimately thwarted by opposition from local environmental groups and citizens.
Rio had previously forecast that lithium demand would grow by 25-35 per cent a year over the next decade, thanks to strong growth in electric vehicles, and that there could be a significant gap between supply and demand in five to 10 years.
