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Thailand faces opportunities and challenges with the lithuim industry

thailand lithuim industry bangkok one march 30 2024

Thailand’s recent unearthing of lithium resources brings both promise and hurdles to the forefront. The global surge in demand for lithium, driven by the rise of electric vehicles and clean energy storage industries, presents a significant need for this essential mineral. Projections indicate a soaring demand of 3.5 million tons by 2030. However, an oversupply paradoxically plagues the market, causing a substantial decline in lithium prices, reaching as low as $13,000 per ton by the close of 2023, with projections suggesting prolonged low prices up to 2026.

The landscape in the Asia-Pacific (APAC) region proves competitive and dynamic. Australia leads as a prominent lithium producer, making strides in processing technologies. Conversely, Indonesia aims to position itself as a cornerstone for electric vehicle production by spearheading lithium processing endeavors and forging partnerships across the lithium resources, battery, and automotive manufacturing sectors, accentuating its valuable nickel and cobalt mineral resources pivotal for battery production alongside lithium.

Amidst this context, Thailand’s discovery of significant lithium reserves, amounting to 14.8 million tons of mineral deposits, including 66,000 tonnes of lithium oxide capable of yielding roughly 164,000 tonnes of lithium carbonate, stands as a potential catalyst for the nation’s burgeoning battery industry. Nonetheless, critical considerations loom large.

Financial feasibility emerges as a crucial concern, with the current return on investment hovering around 7%, beneath the financing expenses of approximately 8%. The economic viability of lithium mining and carbonate processing remains a subject for scrutiny, particularly with the dwindling price of lithium carbonate at approximately USD 13,000 per tonne. Equally pressing are the Environmental, Social, and Governance (ESG) implications associated with the industry’s impact on local communities and the environment, warranting in-depth evaluation before investment deliberations unfold. Thailand also grapples with formidable competition from key APAC contenders.

Venturing into lithium mining initiatives in Thailand may witness a surge in allure through enhanced financial viability, environmental considerations, and amid the competitive global lithium market. Government intervention in the form of supportive policies, encompassing tax incentives and financial backing, could prove instrumental in fostering an ecosystem conducive to bolstering battery production, fortifying supply chains for local battery manufacturers, or leveraging rare earths and other valuable minerals coexisting within lithium deposits.

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