Over 40% of 2024 lithium feedstock to come from companies with Industry Leading scores for ESG

This year, two-fifths of lithium feedstock is forecast to be produced by companies with Industry Leadingenvironmental, social and governance standards, as assessed byBenchmark’s Lithium Sustainability Index.

All “Industry Leading” supply came from countries withintrinsically low ESG risks, according to Benchmark’s regional risk map.

“The Index is important and aims to increase the transparency of the ESG performance of lithium miners globally,”Tom Drabble, a lithium ESG analyst at Benchmark, said. “This information is then used as a responsible sourcing and investing tool highlighting lithium supply opportunities with strong ESG credentials.”

Industry Leading producers

Benchmark assesses all operating and developing lithium miners based on 79 indicators to give an overall score out of 100. A score of 70 or higher deems a company to be “Industry Leading” in their ESG practices.

Based on their Lithium ESG score, top commercially operating lithium miners that are “Industry Leading” include:

Source:Benchmark Lithium ESG Report

*Arcadium has yet to publish an ESG report since it formed from the merger of Allkem and Livent. Allkem’s previous score is used.

All of the countries that these Industry Leading companies currently operate in are deemed as Low Risk countries from an ESG perspective.

“Australia is deemed to have low ESG risks, in part thanks to the strong regulatory environment of the national and regional governments,” Drabble said. “Chile also is a country with relatively low ESG risk. The country recently joined the Intergovernmental Forum on Mining showing that the national government is taking mining risk seriously.”

The worst case scenario of lithium supply from companies with scores in the “Limited Visibility” category ofBenchmark’s Lithium ESG Indexand in countries of concern from an ESG perspective accounts for 26% of forecast 2024 supply.

“These countries have inherent ESG risks and the companies operating in these countries are not currently reporting what measures they are taking to mitigate such risks,” Drabble said.

Chemical supply

For lithium chemicals,Benchmark’s Lithium ESG Reportforecasts that just under a third will come from companies categorised as “Industry Leading” in 2024.

The largest lithium chemical producer globally is SQM, which has an “Industry Leading” score onBenchmark’s Lithium ESG Index.

All of SQM’s chemical supply is from brine sources which generally results in a lower carbon footprint than chemicals produced from spodumene, according toBenchmark’s Lithium Global LCAs.

Although there is a significant amount of mined lithium supply coming from companies and countries with strong ESG credentials, most of this is exported into China.

Benchmark’s Regional Risk Map deems China “of concern” from an ESG perspective, in part due a deficiency in environmental performance and curtailment of civic freedoms.

Benchmark forecasts that China will account for 64% of global lithium chemical production this year.

Sustainable lithium price

Benchmark publishes asustainable lithium carbonate price(CIF Asia). This is based on primary data collected from active market participants with Industry Leading scores.

The latest sustainable lithium carbonate price was assessed at $13,725 per tonne, down 4.85% so far this year, according toBenchmark’s Lithium Price Assessment.

Learn more about Benchmark’s ESG services, including how we can carry out a bespoke lifecycle assessment for your company’s operations, by filling out the form below: