logo-loader

Momentum in the electric vehicle market bodes well for lithium producers

Last updated: 04:06 09 Aug 2018 AEST, First published: 20:06 08 Aug 2018 AEST

Electric cars powering up
The fundamental drivers are there for lithium, a component of batteries used to power electric and hybrid vehicles

Sales of electric vehicles are expected to increase tenfold to 11mln in the period to 2025, before exploding to 30mln by 2030, according to research by the financial news service Bloomberg.

While the report says all the major car makers have plans to fit batteries for their best-selling brands, it reckons China will lead the transition to a greener, cleaner world.

“[Its] push is as much about industrial policy as it is about environmental or energy security concerns,” said Bloomberg.

“China is building national champions and an e-mobility ecosystem for what it sees as a major strategic industry over the coming decades.”

It means the fundamental drivers are there for lithium, a component of batteries used to power electric and hybrid vehicles.

The Bloomberg study also provides third-party validation for some detailed research on the outlook for the silver-white metal by the commodities consultancy Roskill.

Electric car drivers

Demand is forecast to grow for at least the next decade, driven by the fast-expanding car market and by extension the use of lithium-ion power units, it reckons.

“Although rechargeable batteries have gained significant attention in recent years, industrial applications for lithium products such as glass, ceramics and greases continue to show stable growth,” Roskill added.

In 2017, refined lithium capacity totalled 340,000 tonnes of lithium carbonate equivalent, dominated by China-based mineral conversion facilities and lithium brine operations in South America.

Roskill has identified more than 370,000 tonnes of lithium mineral conversion capacity and 120,000 tonnes of lithium brine capacity that could come online at existing and new operations by 2020.

However, it points out that it is unlikely all this capacity increase will be realised.

The procurement of lithium by different manufacturers is also changing, with some companies, such as Panasonic, Great Wall Motor and Jiangxi Special Electric Motor, getting directly involved in the financing of lithium operations.

Major producers - including Albemarle, SQM, Talison and Ganfeng - are leading the way with capacity expansions and construction of new processing facilities.

However, as Roskill pointed out, the continual development of new projects will be required to keep pace with demand growth.

Lithium mine developers could be pushing at an open door

And this provides an opportunity for ambitious mine developers.

“Sustained demand growth and elevated lithium prices have also seen exploration at projects developing complex resources, supported by advances in new processing and extraction technologies,” its latest report read.

“Advancements may further open up supply potential at deposits with traditional mineralogies and brine chemistry, but also at projects targeting high magnesium-lithium ratio brines or more exotic lithium minerals such as zinnwaldite and jaderite.”

Below are seven Canadian lithium plays that are garnering significant investor interest.

Millennial Lithium (CVE:ML) controls over 20,000 hectares of prime land in the heart of the famed lithium triangle that straddles the borders of Chile, Bolivia and Argentina, which is home to the world’s most prolific deposits. In Argentina, it is advancing two projects to a production decision. Both are located within an emerging mining district that is home to several world-class lithium mines and in-development deposits.

Lithium Chile (CVE:LITH) owns fifteen projects in an area of the country that is host to the largest, high-grade reserves and lowest-cost lithium production in the world. The portfolio includes projects with high-grade brines and excellent chemistry, at shallow depths. Exploration is underway and the company is targeting initial resource estimates in 2018.

LSC Lithium (CVE:LSC) is another company focused on the lithium triangle. It is sitting on a 300,000-hectare land package. Its mineral resource estimate, due to be updated soon, includes 1.23mln tonnes of lithium carbonate equivalent in the measured and indicated categories.

Constantine Karayannopoulos, chairman of Neo Lithium (CVE:NLC), caught up with Proactive's Andrew Scott to discuss the recent resource update at the 3Q project in Argentina as well as work that's already underway towards a feasibility study. ''This updated resource estimate, what it tells those of us who really understand the project is that it confirms this is a massive, world-scale resource, it's one of the top ten in the world and it is one of the best resources out there in terms of size, grade and it's probably the lowest impurity lithium resource in the world,” said Karayannopoulos.

Wealth Minerals Ltd (CVE:WML) has projects across the Americas, but its main focus is its lithium assets in South America as it transitions from making acquisitions to the development phase. Its brine project portfolio covers 100,000 hectares.

Nano One Materials Corp (CVE:NNO) is developing patented technology for the low-cost production of high-performance battery materials used in electric vehicles, energy storage and consumer electronics.

It says its processing technology addresses fundamental supply chain constraints by enabling wider raw materials specifications for use in lithium-ion batteries.

Nano One has built a pilot plant to demonstrate high volume production and to optimize its technology across a range of materials.

Argentina Lithium & Energy Corp (CVE:LIT), as the name of the company suggests, is focused on Argentina in what is known as The Lithium Triangle.

Argentina produces around 12% of the world’s lithium, making it the third largest global producer.

The company has three projects in Argentina: Arizaro, Incahuasi and Antofalla.

The company is inaugurating its lithium exploration efforts with its option to earn into the Arizaro lithium project, and a strategy is underway to further expand its holdings and acquire additional high-potential lithium brine projects.

Millennial Lithium Corp sees impressive drill results from Lithium Project ...

Millennial Lithium (CVE:ML) Chairman Graham Harris joined Steve Darling in the Vancouver studio of Proactive Investors with some new drill results from their Pastos Grandes Lithium Project in Argentina. Harris says they were the best results they have seen on this site. Harris also shared...

on 22/11/18