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Lithium Miners News For The Month Of August 2019

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Includes: AISSF, ALB, ALTAF, AMVMF, ARYMF, AZZVF, BCRMF, CRECF, DJIFF, DMNXF, EEYMF, ERMAY, ERPNF, FMC, FRRSF, GALXF, ILHMF, LAC, LAXXF, LIACF, LIT, LMMFF, LSSCF, LTHHF, LTHM, MGXMF, MLNLF, NMKEF, NTTHF, OROCF, PILBF, PLL, PNXLF, RDRUY, RRSSF, SQM, STLHF, WMLLF
by: Matt Bohlsen
Summary

Lithium prices moved lower again in August.

Lithium market news - Lithium heavyweights acknowledge the current lithium oversupply. The battery manufacturers continue to plan new battery capacity. Samsung SDI sees battery demand growth accelerating.

Lithium company news - Albemarle to delay construction of lithium processing capacity. Lithium spodumene miners start to feel the pinch as Alita goes into a trading halt.

Welcome to the August 2019 edition of the lithium miner news. This past month saw lithium prices continue to fall due to lithium oversupply, not helped by a slowdown in Chinese electric car sales in July (after the subsidy removal). In response, Albemarle (NYSE:ALB) announced it will delay its expansion plans.

Lithium spot and contract price news

During August, 99% lithium carbonate China spot prices were down 7.38%. Spodumene (5% min) prices were down 2.07%.

Fastmarkets (formerly Metal Bulletin) reports 99.5% lithium carbonate battery grade spot midpoint prices cif China, Japan & Korea of US$11.00/kg (US$11,000/t), and min 56.5% lithium hydroxide battery grade spot midpoint prices cif China, Japan & Korea of US$13.00/kg (13,000/t).

The charts below courtesy of Fastmarkets show lithium prices have fallen further in recent months.

Lithium hydroxide, battery grade, cif China, Japan & Korea

Lithium carbonate, battery grade, cif China, Japan & Korea

Source: Fastmarkets

Lithium demand versus supply outlook

On August 8, Reuters Mining Weekly reported:

Albemarle to delay construction of lithium processing capacity. Albemarle said on Thursday it would delay construction plans for about 125,000 tons of additional lithium processing capacity as an oversupply of the white metal used to make electric vehicle batteries has pushed down prices. "We're still bullish on demand," CEO Luke Kissam said.

On August 23, Reuters reported:

Chilean miner SQM profits plunge alongside lithium price. “We have seen lithium supply growing more than demand over the past few quarters, putting pressure on prices.” SQM said its lithium sale price in the third quarter was likely to drop to $10,000 per tonne, down one-third from its average first-quarter sale price of $14,600. The third-quarter figure may also weigh on a previous SQM estimate of $11,000-$12,000 per tonne for the second half of 2019. Demand for lithium, a key component of batteries used in cell phones, electric vehicles and other consumer goods, is widely expected to triple by 2025. But festering global trade tensions, the scaling back of electric vehicle subsidies in China and a wave of new output have stifled both demand and prices in recent months.

Below are some useful recent charts on lithium demand.

The impact of the proposed megafactories on raw material demand (lithium in yellow)

Source: Benchmark Mineral Intelligence

Bloomberg NEF 2019 Li-ion battery demand forecast

Source: Bloomberg NEF 2019 Electric Vehicle Outlook

Lithium market and battery news

On July 25, Argus Media reported:

LG Chem accelerates investment in EV batteries.....LG Chem sees batteries doubling its revenue to W59 trillion by 2024 when battery sales are projected to rise nearly fivefold to W31.6 trillion, or 54pc of total company revenue. LG Chem, which plans to triple its EV battery production capacity to as much as 110GWh by the end of 2020, will likely need around 170GWh in 2024 to meet its growth target. New plants are under development in China and Poland, and LG Chem may build a second US factory to go with its operation in Michigan as orders from EV producers grow.

On July 31, Argus Media reported:

Samsung SDI sees battery demand growth accelerating. Samsung SDI expects huge increases in sales and improved profitability as automakers prepare to roll out new and redesigned EVs and plug-in hybrid electric vehicles, said executive vice-president Kwon Young-no. The company sees similar gains in ESS sales through to the end of the year, as the South Korean market returns to normal and renewables projects in the US and Europe spur overseas demand.

On August 2, Reuters reported:

Indian firms set up JV to mine for lithium, cobalt overseas. Three Indian state-run companies are to form a joint venture to buy mining assets overseas that have minerals such as lithium and cobalt, which are used in the manufacture of batteries for electric vehicles. The new joint venture “will help in building partnerships with other mineral rich countries like Australia and those in Africa and South America,” the mines ministry said.

On August 6, Bloomberg reported: "A deluge of batteries is about to rewire the power grid."

On August 20, The Korea Times reported:

SK Innovation secures 'green loan' to invest more in battery biz. SK Innovation has raised an 800 billion won ($657 million) "green loan" from banks in the United States, Europe and China in an effort to invest more in plants manufacturing batteries for electric vehicles [EVs] and lithium-ion battery separators [LiBS], the energy and chemical arm of SK Group said Thursday. With the loan, the company will invest in EV battery plants in the U.S. and Hungary, and LiBS plants in China and Poland......The company is currently constructing EV battery manufacturing plants in Changzhou, China, and Komarom, Hungary, and they are expected to begin operations beginning the first half of 2020. Its battery plant in the U.S. and second plant in Hungary are set to begin operations in 2022.

Lithium miner news

Albemarle

On July 31, Albemarle announced:

Albemarle announces amendment to its definitive agreement with Mineral Resources Limited to form lithium joint venture in Western Australia.

Under the revised arrangements, upon closing of the transaction, Albemarle will acquire 60% ownership of MRL's Wodgina hard rock lithium mine in Western Australia and form a 60-40 joint venture with MRL to operate the mine and battery grade lithium hydroxide production facilities. Under the revised arrangements, Albemarle will pay US$820 million in cash at closing and transfer a 40% interest in two, 25 ktpa lithium hydroxide conversion units being built by ALB in Kemerton, Western Australia.

On August 7, Albemarle announced: "Albemarle reports second quarter growth and raises full year EPS guidance." Highlights include:

  • "Net sales were $885.1 million, an increase of 4% over the prior year; earnings were $1.45 per diluted share.
  • Adjusted diluted EPS was $1.55, an increase of 14% over the prior year.
  • Adjusted EBITDA increased 6%, excluding currency exchange impacts.
  • Revised agreement with Mineral Resources Limited to acquire a 60% interest in the Wodgina hard rock lithium mine project.
  • Raised full year outlook of adjusted diluted earnings per share to between $6.25 and $6.65."

On August 8, Reuters Mining Weekly reported:

Albemarle to delay construction of lithium processing capacity. Albemarle said on Thursday it would delay construction plans for about 125,000 tons of additional lithium processing capacity as an oversupply of the white metal used to make electric vehicle batteries has pushed down prices. "We're still bullish on demand," CEO Luke Kissam said on a post-earnings call, while the head of the lithium unit said he expects demand to "step up again in 2020 to a greater degree. The company last week revised a deal to buy into Australia's Mineral Resources' Wodgina mine to cut spending on the deal and put on hold plans to build a 100 000 t/y lithium hydroxide plant at Wodgina. The company also expects to delay building 75 000 tonnes of processing capacity at Kemerton in Australia.

Jiangxi Ganfeng Lithium [SHE:002460] [HK: 1772], Mineral Resources [ASX:MIN], Neometals (OTC:RRSSF) (Nasdaq:RDRUY) [ASX:NMT], International Lithium Corp. [TSXV:ILC] (OTCPK:ILHMF)

On July 31, Neometals announced: "Quarterly activities report for the quarter ended 30 June 2019." Highlights include:

Corporate

  • "Receipt of Mt Marion sale proceeds (A$103.8 million) and declaration of 2 cents per share dividend- 4th consecutive return to shareholders in as many years; and
  • Cash $113.7million, receivables and investments at $8.9million."

On August 8, Mineral Resources announced:

Wodgina Tailings Facility performing as expected. Independent hydrogeology consultancy AQ2 has given MRL the thumbs-up about the start-up performance of the Tailings Storage Facility [TSF] at our Wodgina Lithium Project, describing the seepage of some process water into the ground as typical for any new processing and tailings facility.

On August 18, 4-traders reported:

China's Ganfeng closes deal to raise stake in Argentina lithium project. China's Ganfeng Lithium said on Sunday it had completed a $160 million deal to raise its stake in the Cauchari-Olaroz lithium brine project in Argentina to 50%.

On August 22, Mineral Resources announced: "FY19 full year results including notable highlights....Normalised EBITDA was 15% above midpoint of guidance."

Investors can also read my article: "Ganfeng Lithium Looks To Be A Great Buy." Regarding Neometals, investors can read my recent article: "An Update On Neometals", and my January 2019 CEO interview here.

Sociedad Quimica y Minera S.A. (NYSE:SQM)

On August 21, Sociedad Quimica y Minera S.A. announced: "SQM reports earnings for the second quarter of 2019." Highlights include:

  • "SQM reported net income for the six months ended June 30, 2019 of US$150.7 million.
  • Earnings per share totaled US$0.57 for the first half of 2019, lower than the US$0.94 reported for the first half of 2018.
  • Revenues for the first half of 2019 were US$998.4 million, 13.7% lower than revenues for the first half of 2018."

On August 21, Sociedad Quimica y Minera de Chile S.A. announced:

SQM to pay interim dividend....To pay an interim dividend equal to US$0.26669 per share to be charged against 2019 retained earnings.

Investors can read the company's latest presentation here.

(Chengdu) Tianqi Lithium Industries Inc. [SHE:002466]

On August 22, 4-traders reported:

China's Tianqi Lithium first half net profit slumps, clinches LG Chem supply deal. China's Tianqi Lithium Corp, one of the world's biggest lithium producers, said on Thursday its first-half net profit fell 85.2% from the same period a year ago as prices slumped for the metal used in electric vehicle [EV] batteries. Tianqi posted January-June net income of 193.4 million yuan ($27.30 million), versus 1.31 billion yuan a year earlier.....Revenue slid 21.3% to 2.6 billion yuan. "Company's income had been affected by the drop of lithium chemical products prices and increasing financial costs in January-June," it said in the statement, adding it had to pay 860.7 million yuan of interest in the first half on a loan taken out to fund its purchase of a stake in Chilean miner SQM.

Construction is ongoing at their Kwinana lithium hydroxide plant in Western Australia and is expected to be finished soon.

Livent Corp. (LTHM)[GR:8LV] - Recently spun out from FMC Corp. (NYSE:FMC)

On August 6, Livent Corp. announced: "Livent announces second quarter 2019 results." Highlights include:

  • "Revenue of $114 million.
  • GAAP net income of $16 million and GAAP earnings per diluted share of 11 cents.
  • Adjusted earnings per share of 12 cents.
  • Adjusted EBITDA of $28 million.
  • Second quarter results in line with guidance ranges.
  • Full-year 2019 guidance reaffirmed."

Investors can read my recent article "Livent Is Looking Cheap."

Orocobre [ASX:ORE] [TSX:ORL] (OTCPK:OROCF)

On August 6, Orocobre announced:

Naraha Lithium Hydroxide Plant ground breaking ceremony. Orocobre Managing Director and CEO Mr. Martín Pérez de Solay commented, “This is an exciting time for Orocobre and our joint venture partners as we see construction commencing at the Naraha site.

On August 23, Orocobre announced:

Finalisation of Olaroz Stage 2 Finance Facility. Orocobre Limited is pleased to advise that the finance facility for the Olaroz Lithium Facility (“Olaroz”) Stage 2 Expansion has been finalised. Comprehensive project finance.....has now been executed for a US$180 million debt facility (“the Facility”) that will be used for the Stage 2 Expansion of the Olaroz operations. Sales de Jujuy S.A. operates as a joint venture between Orocobre (66.5%), TTC (25%) and JEMSE, 8.5%.

On August 23, Orocobre announced: "Orocobre Limited reports strong FY19 results despite weak market." Highlights include:

  • "Statutory Group net profit of US$54.6 million for FY19 includes a number of one off items. Underlying NPAT of US$24.8 million is down from US$25.7 million in the previous corresponding period (“PCP”).
  • Total production of 12,605 tonnes of lithium carbonate.
  • EBITDA IX1 of US$60.9 million, after deducting export tax of US$7.5 million. Average price received of US$10,322/tonne FOB2, down from US$12,578/tonne FOB2 in PCP. Gross operating cash margins of 58% with lithium production costs of US$4,302/tonne up from US$4,194/tonne in FY18, making Olaroz one of the lowest cost producers of lithium chemicals in the world. Gross cash margin of US$6,020/tonne, despite lower prices.
  • As of 30 June 2019, Orocobre Group had cash of US$279.8 million.

Upcoming catalysts include:

  • H2 2020 - Olaroz Stage 2 (42.5ktpa) commissioning.
  • H1 2021 - Naraha lithium hydroxide plant (10ktpa) commissioning (ORE share is 75%).

You can read the latest investor presentation here, or my article "An Update On Orocobre."

Galaxy Resources [ASX:GXY] (OTCPK:GALXF)

On August 7, Galaxy Resources announced:

Non-cash impairment. Galaxy Resources Limited advises that, as part of its preparation of the financial statements for the half-year ended 30 June 2019, it has been undertaking a review of its inventory on hand at Mt Cattlin, capitalised Mt Cattlin mine development costs attributable to the acquisition of General Mining Limited and deferred tax assets arising from capitalised tax losses.....Galaxy estimates the impairment will be in the range of US$150million to US$185million.....The adjustment arising from this impairment is a non-cash item and does not have any impact on cash-flow, operations or banking covenants. At 30 June 2019, Galaxy held cash of US$176.3 million, marketable securities of US$27.2 million and no debt.

Upcoming catalysts include:

2019 - Sal De Vida partner and construction announcements. Any China conversion plant announcements. James Bay FS.

2022 - Sal De Vida production may begin.

Investors can read my recent article "Galaxy Resources Plan To Be A 100,000tpa Lithium Producer By 2025", and my CEO interview here, and the latest company presentation here.

Pilbara Minerals [ASX:PLS] (OTC:PILBF)

No news for the month, but you can read the company latest "Annual Financial Report 30 June 2019" here.

Upcoming catalysts:

2019 - Production ramp-up.

Q1 2020 - Stage 2 commissioning planned.

Investors can read my recent article "An Update On Pilbara Minerals", and an interview here.

Alita Resources Limited (Formerly Alliance Mineral Assets Limited ("AMAL")) (merged with Tawana Resources) [ASX:A40][SGX:A40]

On August 14, Alita Resources Limited announced: "Market announcement. Alita Resources Limited–Suspension from Official Quotation."

On August 18, Alita Resources Limited announced:

Update on loan facility. Alita Resources Limited advises that on 16 August 2019 it received a notice of default from the consortium of lenders led by Tribeca Investment Partners Pty Ltd (Lenders) under the secured A$40 million loan facility (Facility) asserting events of default.

"Note: Its tickers on the ASX and the Singapore Exchange remain unchanged.

Investors can read the company presentation here or a CEO interview here.

Altura Mining [ASX:AJM] (OTC:ALTAF)

On July 30, Altura Mining announced: "Quarterly activities report June 2019." Highlights include:

Production and Sales

  • "June quarter production of 42,402 wet metric tonnes [WMT] of spodumene concentrate (versus March quarter 29,627 wmt).
  • The Company’s first full quarter of commercial production delivers an impressive average operating cash cost of US$392 wmt produced (FOB basis).
  • Process plant improvement throughout the quarter delivered a monthly production record of 16,020 wmt of concentrate in June.
  • 38,635 dry metric tonnes (dmt) of high-quality lithium concentrate sold and shipped via 5 cargoes, with all sales in line with offtake specifications.
  • Significant improvement in concentrate production and sales with production 43% higher and sales 160% higher than the March quarter, respectively.
  • Coarse and fines circuits successfully decoupled following plant modification delivering significant improvements in coarse concentrate production and stabilising fines concentrate production."

Corporate

  • "Subsequent to the end of the June quarter, a new binding offtake agreement was executed for a minimum of 35,000 tonnes annually with Shandong Ruifu, an established Chinese lithium materials producer.
  • Ningbo Shanshan Co. Ltd (“Shanshan”) became a major shareholder of Altura on 20 June 2019 representing an 11.8% interest in the Company.
  • Post the end of June, finalisation of a Subscription and Cooperation Agreement was reached with Shanshan for an equity investment to raise A$22.4 million."

Exploration and Development

  • "Reliable water supply found at the Corboy Prospect that secures water resources for the future of the Project including expansions."

On August 1, Altura Mining announced: "Altura lithium offtake update." Highlights include:

  • "Binding Offtake Agreement (BOA) signed with established Chinese lithium materials producer Guangdong Weihua Corporation.
  • BOA has a five-year term for 50,000 dry metric tonnes [dmt] per annum of lithium concentrate, commencing in August 2019.
  • Agreement reached with Lionergy Limited to reduce existing offtake allocation."

On August 8, Altura Mining announced: "Altura enhances development growth with agreement with Sayona for Pilbara Lithium assets." Highlights include:

  • "Agreement with Sayona Mining to earn a 51% interest over its attractive exploration portfolio in the world-class Pilgangoora lithium district of Western Australia.
  • Altura will commit to $1.5 million on exploration over 3 years to earn its 51% stake, providing potential upside on the back of new lithium discoveries.
  • The prospective tenements cover an area of 1,806 km2 in the Pilgangoora and East Pilbara regions and are strategically placed in close proximity to the Altura Lithium operations."

On August 20, Altura Mining announced: "Production, sales and market update." Highlights include:

  • "First shipment to new offtake partner Guangdong Weihua Corporation with the loading of 11,300 wmt on the COE Luisa.
  • Current quarter sales of 19,000 dmt.
  • Quarterly production volume expected to be approximately 45,000 wmt (exceeding the June quarter total of 42,402 wmt) with the plant now consistently delivering increased production levels.
  • Concentrate sales pricing in line with the March and June quarters.
  • China marketing visit provided further positive feedback on the quality and long-term demand for Altura Lithium concentrate."

Investors can read my latest article "An Update On Altura Mining". Investors can also read a company presentation here.

AMG Advanced Metallurgical Group NV [NA:AMG] [GR:ADG] (OTCPK:AMVMF)

On July 31, AMG Advanced Metallurgical Group NV announced: "AMG Advanced Metallurgical Group N.V. reports second quarter 2019 results and updates Full year 2019 guidance." Highlights include:

  • "Revenue decreased by 8% to $303.6 million in the second quarter 2019 from $329.3 million in the second quarter 2018.
  • EBITDA(2) was $23.8 million in the second quarter 2019, a 53% decrease over the same period in 2018.
  • Annualized return on capital employed was 19.0% in the second quarter 2019, as compared to 30.6% in the second quarter 2018.
  • AMG has returned $81 million to shareholders in 2019 through its share repurchase program and dividend payments.
  • AMG declares an interim dividend of €0.20 per ordinary share, unchanged from the interim dividend in the prior year."

Upcoming catalysts:

2020 - Stage 2 production at Mibra Lithium-Tantalum mine (additional 90ktpa) to begin.

Lithium Americas [TSX:LAC] (LAC)

On August 13, Lithium Americas announced: "Lithium Americas reports Q2 2019 results."

  • Development activities are on schedule with the advancement of detailed engineering, ponds construction, drilling of production wells, camp construction, plant design and construction and equipment procurement to support the start of production by the end of 2020.
  • Four evaporation ponds are completed and filled with brine, three more are constructed and ready for liner installation, and thirteen ponds are at various stages of construction. Overall ponds earthworks completion is 56%.
  • A total of ten wells are currently pumping brine to the ponds and seven more wells are under construction.
  • Plant and camp platforms are completed and concrete works for the buildings have been started.
  • A total of $163 million was advanced to Minera Exar in 2019 year to date by the Company and Ganfeng to fund construction.
  • Over 634 people are working at the site, including 202 Minera Exar employees and 432 contractors.
  • Initial Stage 1 capital cost estimate of $425 million, on a 100% basis and before value-added taxes (“VAT”), remains unchanged. Minera Exar is completing a feasibility study exploring an increase in the stated production capacity of the Caucharí-Olaroz project from 25,000 tpa to an aggregate of 40,000 tpa of lithium carbonate. Results of the feasibility study are expected in September 2019.
  • The Company increased the Measured and Indicated mineral resource at the Caucharí-Olaroz project by 53% to 17.9 million tonnes of lithium carbonate equivalent (“LCE”) at 581 mg/L average grade and the Inferred mineral resource to 5.1 million tonnes of LCE at 602 mg/L.

Thacker Pass:

  • Lithium Nevada Corp. (“Lithium Nevada”) has submitted a draft Mine Plan of Operations to the Bureau of Land Management on schedule in Q3 2019. This will be followed by the development of the Environmental Impact Statement (“EIS”).....The EIS process is expected to be completed in the second half of 2020.
  • Work has advanced as planned in Lithium Nevada’s testing facility located in Reno, Nevada on its proprietary process.....This work is expected to be completed by Q1 2020.
  • A patent application has been submitted to the United States Patent and Trademark Office to protect fundamental aspects about the Company’s proprietary lithium extraction technology, which includes elements from the attrition process through to crystallization.
  • The Company is considering the production of lithium hydroxide in addition to lithium carbonate directly from lithium sulphate to provide added flexibility to market demand.
  • The Company has commenced the preparation of a NI 43-101 compliant definitive feasibility study (“DFS”).....Results from the DFS are forecasted to be released in due course.
  • The Company is evaluating potential partnership and financing scenarios for Thacker Pass.

RheoMinerals:

  • RheoMinerals Inc.’s sales for the three months ended June 30, 2019, were $1.5 million (2018 – $0.9 million). This represents a 67% increase in sales for the three months ended June 30, 2019, year over year.

Corporate:

  • "As at June 30, 2019, the Company had $31.5 million in cash and cash equivalents.

On August 13, Lithium Americas announced:

Lithium Americas completes US$160 million project investment by Ganfeng Lithium. In consideration for the newly issued shares, Minera Exar has received US$160 million in cash to continue to fund the Project’s construction activities. Upon closing, Ganfeng Lithium has increased its interest in Caucharí-Olaroz from 37.5% to 50%, with Lithium Americas holding the remaining 50% interest.

Upcoming catalysts:

  • 2019 - Cauchari-Olaroz plant construction. Feasibility Study on an expansion to 50ktpa (due September).
  • End 2020 - Cauchari-Olaroz lithium production to commence and ramp to 40ktpa.
  • 2022 - Possible 2022 lithium clay producer from Thacker Pass Nevada (full ramp by 2025).

NB: LAC now owns 50% of the Cauchari-Olaroz project and partners with Ganfeng Lithium (50%).

Investors can read my article "An Update On Lithium Americas."

Nemaska Lithium [TSX:NMX] [GR:NOT] (OTCQX:NMKEF)

On July 31, Nemaska Lithium announced: "Nemaska Lithium releases updated NI 43-101 Technical Report." Highlights include:

  • "Before-Tax Internal Rate of Return [IRR] at 30.3% and Net Present Value [NPV] @ 8% of CAD 3.1 B.
  • After-Tax IRR at 27.4% and NPV @ 8% of CAD 2.3 B.
  • CAPEX assessment for Whabouchi and Shawinigan confirms the Corporation’s February 2019 estimate."

Upcoming catalysts:

  • June 2020 - Whabouchi mine production set to begin.
  • November 2021 - Hydroxide plant production to begin.

Lithium juniors

Lithium juniors include AIS Resources [TSXV:AIS] (OTCQB:AISSF), American Lithium Corp. [TSX-V: LI] (OTCQB:LIACF), Argentina Lithium and Energy Corp. [TSXV:LIT] (OTCQB:PNXLF), Argosy Minerals [ASX:AGY] (OTC:ARYMF), AVZ Minerals [ASX:AVZ] (OTC:AZZVF), Bacanora Minerals [TSXV:BCN] [AIM:BCN] [GR:1BQ] (OTC:BCRMF), Birimian Ltd [ASX:BGS] (OTC:EEYMF), Critical Elements [TSXV:CRE] [GR:F12] (OTCQX:CRECF), Dajin Resources [TSXV:DJI] (OTCPK:DJIFF), Enigri (private), Eramet (EN Paris:ERA) (OTCPK:ERMAY), European Metals Holdings [ASX:EMH] [AIM:EMH] [GR:E861] (OTC:ERPNF), Far Resources [CSE:FAT] (OTCPK:FRRSF), Force Commodities [ASX:4CE], Infinity Lithium [ASX:INF], Kidman Resources [ASX:KDR] [GR:6KR], Latin Resources Ltd [ASX: LRS] (OTC:LAXXF), Lithium Australia [ASX:LIT] (OTC:LMMFF), Lithium Power International [ASX:LPI] (OTC:LTHHF), LSC Lithium [TSXV:LSC] (OTC:LSSCF), MetalsTech [ASX:MTC], MGX Minerals [CSE:XMG] (OTC:MGXMF), Millennial Lithium Corp. [TSXV:ML] (OTCQB:MLNLF), Neo Lithium [TSXV:NLC] (OTC:NTTHF), NRG Metals Inc. [TSXV:NGZ] (OTCQB:NRGMF), North American Lithium (private), Piedmont Lithium [ASX:PLL] (PLL), Prospect Resources [ASX:PSC], Rock Tech Lithium [CVE:RCK] [RCKTD], Sayona Mining [ASX:SYA] (OTCPK:DMNXF), Savannah Resources [LSE:SAV], Standard Lithium [TSXV:SLL] (OTC:STLHF), Sigma Lithium Resources (OTCQB:SGMLF), and Wealth Minerals [TSXV:WML] (OTCQB:WMLLF).

Global X Lithium & Battery Tech ETF (NYSEARCA:LIT) - Price = US$22.72.

The LIT fund moved down for the month of August. The current PE is 18.55. Given lithium demand should rise ~4-5 fold between end 2018 and end 2025, the lithium sector PE of ~18.5 looks to be good value.

Source: Seeking Alpha

Conclusion

August saw lithium prices continue to fall, and industry heavyweights Albemarle and SQM say the lithium market is oversupplied causing prices to fall. Alita appears to be in trouble, showing signs the spodumene miners are under some pressure.

My highlights for the month were:

  • Albemarle to delay construction plans for about 125,000 tons of additional lithium processing capacity due to oversupply.
  • LG Chem accelerates investment in EV batteries. LG Chem sees battery sales rising nearly fivefold by 2024.
  • Samsung SDI sees battery demand growth accelerating.
  • SK Innovation secures 'green loan' - will invest in EV battery plants in the U.S. and Hungary, and LiBS plants in China and Poland.
  • Albemarle Q2 results - Adjusted diluted EPS was $1.55, an increase of 14% over the prior year.
  • SQM - Earnings per share totaled US$0.57 for the first half of 2019, lower than the US$0.94 reported for the first half of 2018.
  • Tianqi Lithium - First-half net profit fell 85.2% (in part due to extra financing costs related to the SQM purchase). Revenue slid 21.3% to 2.6 billion yuan. Clinches LG Chem supply deal.
  • Orocobre commences construction at the Naraha Lithium Hydroxide Plant site, Olaroz Stage 2 project expansion is now fully funded with a US$180 million debt facility. Orocobre Limited reports strong FY19 results despite weak market.
  • Alita Resources trading suspended, receives notice of default from the consortium of lenders.
  • Altura Mining signs 50,000tpa Binding Offtake Agreement (BOA) with Chinese lithium materials producer Guangdong Weihua Corporation. Altura Agreement with Sayona Mining to earn a 51% interest over its attractive exploration portfolio in the Pilgangoora lithium district of Western Australia.
  • Lithium Americas Caucharí-Olaroz project is on budget and on schedule for an end 2020 production startup.

As usual all comments are welcome.

Disclosure: I am/we are long NYSE:ALB, JIANGXI GANFENG LITHIUM [SHE: 2460], JIANGXI GANFENG LITHIUM [HK: 1772], SQM (NYSE:SQM), ASX:ORE, ASX:GXY, ASX:PLS, ASX:AJM, AMS:AMG, TSX:LAC, TSXV:NLC, ASX:AVZ, ASX:NMT, ASX:CXO. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.

Additional disclosure: The information in this article is general in nature and should not be relied upon as personal financial advice.