Argosy Minerals Limited (ASX:AGY) has produced battery-grade lithium carbonate (LCE) product from its Rincon Lithium Project in the Lithium Triangle of Argentina’s Salta Province.
This milestone was achieved from the stage I pilot plant which produced LCE with a content value of 99.6%, prompting shares to jump 50% at opening to 27 cents.
This product is representative of Argosy’s initial battery-grade specification and can be sent to international cathode and battery-makers for their own quality confirmation and testing.
Argosy managing director Jerko Zuvela said: “We are delighted at this significant milestone – to achieve such a result from our 500-tonne per annum capacity plant is a remarkable success.
“We believe our chemical process pathway is efficient and scalable, and this success bodes well for the continued development of stages II and III at the Rincon project.”
Plant works have progressed to the stage where efficient production of 30 kilograms of LCE product has been completed.
The LCE product will be prepared for customer samples and sent to end-users.
The stage I industrial-scale pilot plant.
This initial product, pending customer verification, will form the basis for Argosy progressing towards finalising a preliminary offtake agreement for stage I Rincon production.
The company’s prime focus and principal stage I milestone remains to produce consistent battery-grade product, whilst also confirming the chemical process is efficient, cost-effective and scalable for all development stages.
Argosy is confident that the process test-works phase will form the basis to further improve and optimise the production process for subsequent commercial sales and substantiate commercial plant designs for stages II and III.
Lithium market remains strong
In recent months, the company’s most relevant pricing reference – the Battery Grade Li2CO3, FOB South America average price - has been around US$15,000 per tonne.
This aligns with reports from key South American suppliers, who have guided toward strong pricing for the remainder of 2018, citing robust demand, particularly from cathode customers.
It comes amidst a shortfall of battery-grade lithium chemical products in carbonate and hydroxide form.
Supply/demand balance is tight
The market was expecting increasing supply during 2018 from Chinese lithium chemical conversion plants processing spodumene concentrate from Australian hard rock projects.
However, the overall supply/demand balance for lithium chemicals continues to be tight as these plants have reported significant technical difficulties commissioning new capacity and converting new supply.
Argosy’s feedback through direct discussions with end-use customers and analyst commentary indicate an increasingly tight lithium market for late-2018 and the next few years ahead.
The company considers it is in a much stronger and unique position for its engagement with potential customers.
This is due to it being the only new participant able to offer potentially high value, premium battery-quality LCE product directly via the spot market or potential offtake arrangements.