In what may have gone unnoticed earlier this week, the US house of Representatives along with the US Senate tabled the Critical Minerals Policy Act of 2011. Several critical minerals were formally defined, including lithium. The bill will ensure $106 million is allocated towards development for these metals over the next 4 years until 2015. This will position lithium with strategic importance as a critical metal. After learning lessons from relying on China to produce rare earth elements (and seeing them reduce exports, resulting in very high rare earth prices), the US will have strategic interests to develop domestic sources of these critical metals.
According to the bill under section 205, it says that the US government will spend at least $1 million per a year on domestic lithium-ion battery supply chain development. Eligible entities would be able to use grants provided to develop: 1) domestic industrial process that increase lithium production, processing, or recycling for use in advanced lithium batteries; or 2) industrial processes associated with new formulations of lithium feedstock for use in advanced lithium batteries.
This is good news towards promoting Lithium as an investment. At least it’s a start for the metal. Domestic lithium mining companies will benefit from this extra funding. After reading the policy closely, it gave me a few junior US-based lithium miners who may just benefit more from these grants in the coming years. When you think of lithium companies who could eligible for these grants, it would be mainly three small junior companies in its exploration stage. Interestingly, they all have large mining operations based in Nevada:
American Lithium Minerals (OTC: AMLME.OB) is a mineral exploration company focused on the development of lithium and boron resources in Nevada. The company’s primary operation is the high-grade Borate Hills property in western Nevada, a deposit with over 3,400 acres in a region of western Nevada with a grade averaging 0.275%. Currently, a $4.5 million exploration and development program is progressing towards completing a pre-feasibility study on the Borate Hills Project.
AmeriLithium (OTC: AMEL.OB) is based in Nevada as a lithium exploration and mining company. It acquired 681 000 acres of lithium properties worldwide, including having claims in Western Australia and Alberta, Canada. It includes three projects (Paymaster Project, Clayton Deep, and Full Monty) in Nevada with access to the a lithium producing plant in the US. The company is currently performing drilling and testing on its lithium deposits for its Paymaster project in Nevada.
Western Lithium (TSX: WLC.TO) was originally created out of Western Uranium Corporation and graduated to the TSX in February of 2011. Western Lithium’s mining operation is in developing its clay deposit located in the Kings Valley in Northern Nevada. The deposit is known to have a very deep history in metals and industrial mineral mining. They recently obtained a National Instrument 43-101 resource estimate, the deposit is estimated to have over 11 million tonnes of lithium carbonate equivalent (LCE) with a lithium cut-off grade of 0.40%. The company is working on producing 27 700 tonnes per year of LCE as early as 2014.