By Eugene Gerden
Leading Russian oil and gas corporations plan to begin commercial production of lithium with the aim to compensate losses associated with Western sanctions targeting Russian hydrocarbons.
According to recent calculations by analysts of the Russian Vygon Consulting expert agency, oil and gas companies can earn up to US$13 billion a year from the sale of lithium obtained from groundwater at their fields.
According to them, the extraction of the metal can become the most profitable way of its production in Russia, with the possible output up to 397,000 tonnes LCE (lithium carbonate) by 2040.
Currently, Russia does not mine lithium. Until 2022, it imported 9,000 tonnes of LCE per year, mainly from Chile and Argentina and now it is possible to buy the metal from Bolivia. Most lithium in the Russian Federation is used in the military-industrial complex, space and nuclear industries.
So far, Russian oil and gas corporations, have been only conducting pilot projects for lithium production at their wells; however, many of them are now ready to begin commercial production.
As for pilot projects, probably the most famous involved the extraction of lithium from the groundwater of Gazprom’s Kovykta deposit, scheduled to start by 2025 at an experimental well. Analysts at Vygon Consulting said most of the Russian lithium resource base is concentrated in the Leno-Tunguska oil and gas province in the Ural-Volga region and in the North Caucasus where such companies as Rosneft, Gazprom Neft, LUKOIL and Tatneft operate.
It is expected that the cost of lithium mining from groundwater, may be comparable to ore projects, and on the finished oil and gas infrastructure, the final cost figure may be even lower due to lower CAPEX, being estimated at $4,000–5,000 per tonne of LCE, which is comparable to the figures for similar projects in Argentina, Bolivia and the United States. World prices for lithium are several times higher: now the cost of a tonne is estimated $60,000, although by 2040 it may gradually drop to $35,000.
While mining of lithium in Russia is not currently conducted, there are several potential projects that involve extraction of lithium from ore. The largest project is in the Murmansk region at the Kolmozerskoye field and is being carried out by Rosatom and Norilsk Nickel. As part of the company’s plans, future output is expected to reach 45,000 tonnes of lithium carbonate and hydroxide per year by 2030.
In general, according to earlier announced plans by the Russian government, by 2030, the overall lithium output in the country will reach 68,000 tonnes of LCE. That, however, will be significantly higher than the current domestic demand of only 20,500 tonnes.
Analysts at Vygon Consulting also believe that Russia will export the lion’s share of lithium abroad due to the growing global shortage. According to their forecasts, global demand for lithium could reach approximately 4.5 million tonnes of LCE by 2040 due to sales growth of electric vehicles – while the supply will be only 3.5 million tonnes. Russia could cover more than half of the deficit with the extraction of 0.6 million tonnes of LCE per year from brines and ore. And the lithium industry of the Russian Federation could take the fifth place, overtaking ferrous metals, coal and wheat in terms of export earnings.
Analysts also believe that the final decision for the beginning of commercial lithium production in Russia from brines could be taken after the launch of the project at the Kovykta field. According to analysts, it is important to make sure the cost of mining will be acceptable and lower than the cost of ore mining. Analysts believe Russia will be able to sell its lithium to China, India, Vietnam and other countries in Asia and the Middle East, while the supplies to Western markets will be probably banned.