CS. Lithium Brines Investment Play in Argentina is back and sold into the dust lithium junior miners are waiting to be picked up now. Despite all recent mumbling about the Electric Cars - as usual and as it has happened before - Toyota takes a very bold step to secure the supply of Lithium as strategic commodity for the next Industrial Revolution. Keep in mind always the big picture, what the real players are doing and not only what they are talking about here.
Even if Toyota has announced recently that EVs are not being rolled out as fast as the most optimistic people involved, like us, have hoped, they did the same trick when first time bought a stake in Orocobre. They have announced that Lithium based technology is far from commercialisation at that time, ground the lithium juniors market and then bought a stake in Orocobre. Do not make any mistakes here - it is The Art Of War in its prime ongoing now in the fight to secure the supply of strategic commodities. Toyota has invested billions in Hybrid technology and is the most successful Hybrid maker - Prius Models are the largest number of sold Hybrids in the world by far now. And here is the twist - The New Plug In Prius is based on the Lithium battery, even if Toyota "does not believe in the mass market for pure EV now" - they know too well that Plug In is the next obvious step and you need a lot of Lithium for this transition from the early days battery technology. Plus do not forget about Toyota's stake in Tesla Motors and RAV4 EV powered by Tesla rolling out now.
Electric Charge: Tesla Model S by Translogic - This Is What Lithium Is For!
"This Is What Lithium Is For! Lithium allows you to make Electric Super Car - Tesla Model S is the best Electric Car on the market now and Translogic with Bradley Hasemeyer are the best to cover it! This is the right Energy - both the car and report about it - supercharged, focused and No Compromise of being Green. Tesla Model S is the real car, but only better and now it can travel the distance with the unveiled network of Tesla Superchargers."
Talking about The Art Of War - Chinese sometimes taking it quite literally and seriously - China has recently signed the agreement about military cooperation with Argentina, Chinese companies have received a green light to invest in resources in Argentina and plans are announced for the building Lithium Battery plants and Electric Busses in Argentina by BYD. By the way Warren Buffet is backing BYD with its Electric Dreams.
Lithium Rush: The Art Of War In The Markets: China Getting Ready For 5 Million Electric Cars by 2020
Lithium M&A: Who Will Be Next? Battery demand fuels Rockwood's Talison Lithium buy
Out of our favorite: International Lithium, Rodinia Lithium, Lithium One and Orocobre - Lithium One is taken out by the Galaxy already. Orocobre could become the consolidator in this junior development space and International Lithium and Rodinia Lithium could become the forgotten darlings for M&A dreams. Rodinia Lithium is more advanced with resource estimation, small stake from Shan Shan and recent creative financing of its Potash side of story. International Lithium enjoys increased stake of its strategic partner - Ganfeng Lithium, has found the highest in Argentina Potash grade on its Mariana Lithium-Potash Brine and announced financing and J/V LOI on its Ireland Lithium project. Talison buyout brings new angle on Lithium hard rock mining and can create the new opportunities for International Lithium with its projects in Ireland and Canada.
As we have written above, quite a few Chinese companies are involved in Argentina already and have secured their stakes in the upcoming Lithium developers. Rodinia Lithium has being waking up lately with some bids coming in and International Lithium should announce its plans about the development of Mariana Lithium Brine in Argentina, once the recently announced deals with Chinese Ganfeng Lithium will be finalised.
This bold move by Toyota will put all serious lithium brine developers in Argentina on the investors' radar screens again. Country risk, which was driving all the prices down with the general Risk Off trade in the junior miners this summer will be reassessed. Investment space here is really tiny, number of credible names with the real assets and with serious backing is even less - any catalyst on the company level can ignite the next leg up in this Generational Bull Market.
Toyota tries on the mining helmet: buys lithium deposit in Argentina
Cecilia Jamasmie | September 29, 2012
While China threatens Japan with supply limitations of rare earths, Japanese companies are actively seeking to grow their own exposures in rare metals and lithium, which will become an important part of the electric car manufacturing process.
Toyota (NYSE:TM), one of the leading automakers in the world, bought this week a 25% stake in Salar de Olaroz lithium and potassium project in Argentina to ensure supply for it growing electric cars division. This is the first time a Japanese company gets involved in large-scale mining of the white element, key for producing batteries that fuel electric vehicles.
The Japanese carmaker's move doesn't come as a surprise. Through its subsidiary Toyota Tsusho, it has long been looking to secure a stable supply of lithium for car batteries. Japan's demand for the so-called white gold is around 17,000 tons a year - enough to supply batteries for an average of 550,000 vehicles. This means that Salar de Olaroz would cover a large part of Toyota's requirements for at least 15 years.
The mine, which has an estimated life of 40 years and very low cost as one of its main advantages, will also produce about 10,000 tons of potassium.
Australian Orocobre (ASX: ORE, TSX: ORL), which owns the Salar de Olaroz deposit, said it retained 66.5% of ownership, while the Jujuy provincial Energy and Mining Society of the State (JEMSE) owns the remaining 8.5%. The state-run Japan Oil, Gas and Metals National Corporation has guaranteed $200 million to develop the project thanks to a low rate interest loan by Mizuho Corporate Bank.
Negotiations will be closed in two weeks and construction is expected to start as soon as possible, with the objective of commencing commercial operations in 2014.
The mine will produce 17,500 tons per year, said Orocobre in a statement. That amount exceeds the originally estimated 16,400 tonnes.
Orocobre seems to have reached a good position in the rising market of lithium and rare earths. It recently acquired another project in Argentina from Rio Tinto (Lon, NYSE:RIO) that adds exposure to boron minerals and complements its existing lithium properties.
The miner expects to produce around 17,500 tonnes of lithium carbonate a year, which is an increase on its initial 16,400 feasibility estimate.
Other than in batteries for hybrid and electric cars, lithium is used in a variety of high tech devices such as tablets, notebooks, digital cameras and cell phones. The price for this commodity is expected to reach $6,100 in the coming years, with demand growing 6% annually.
Image: Takeshi Uchiyamada, Toyota's research chief, shows the company's upcoming all-electric city car. Courtesy of Toyota."
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