- Lithium prices were slightly down (except spodumene significantly up) the past month. BMI: Battery capacity is currently growing at twice the speed of lithium raw material supply.
- Lithium market news - BMI: Lithium ion battery pipeline breaks the 6 TWh capacity by 2030 and will require 5 million tpa of lithium by 2030 (10.4x increase on 2021).
- Lithium company news - Albemarle/Mineral Resources to speed up restart at Wodgina lithium mine to May 2022. Ganfeng/Mineral Resources to expand Mt Marion production to 900,000tpa by end of 2022.
- Allkem's Olaroz resource upgraded 2.5x to 16.2 million tonnes LCE. Pilbara Minerals/POSCO JV downstream transaction completed, plan to construct and operate a 43ktpa LiOH facility in South Korea.
- Near term lithium producers Argosy Minerals, LAC/Ganfeng, Core Lithium, & Sigma Lithium all making good progress. Core Lithium acquires lithium project near Finniss. Sigma Lithium grows resources to 58.9Mt.
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Welcome to the April 2022 edition of the lithium miner news. The past month saw continued good news from the lithium producers and funded near term producers. We also saw a slight pullback in China lithium chemical prices, which is not surprising given many EV manufacturers in Shanghai have had their operations disrupted by COVID-19 restrictions.
Lithium spot and contract price news
Asian Metal reported during the past 30 days, 99.5% China lithium carbonate spot prices were down 2.0%. Lithium hydroxide prices were down 1.58% the past 30 days. Lithium Iron Phosphate (Li 3.9% min) prices were down 1.69%. Spodumene (6% min) prices were up 17.14% over the past 30 days.
Benchmark Mineral Intelligence as of mid-April reported China lithium carbonate prices of RMB 499,000/tonne (US$78,350) (battery grade), and for lithium hydroxide RMB 496,500/tonne ($77,950), and stated (no link available): "Benchmark anticipates that pricing for hydroxide will also see a temporary stabilisation towards the end of the month, in line with the domestic carbonate market."
Metal.com reports lithium spodumene concentrate (6%, CIF China) price of CNY 22,317 (~USD 3,432/mt), as of April 22, 2022.
China Lithium carbonate spot price - CNY 480,500 (~USD 73,903)
Lithium demand versus supply outlook
UBS's EV metals demand forecast (from Nov. 2020)
Rio Tinto's lithium emerging supply gap chart (October 2021)
Lithium demand vs. supply forecast by Benchmark Mineral Intelligence in Q3 2021
If supply can be rapidly ramped in future years, it can come close to meeting surging demand.
UBS forecasts Year battery metals go into deficit (chart from 2021)
Macquarie's lithium demand vs. supply forecast (July 2021) - Deficits from 2022 growing bigger from 2027
BMI 2022 lithium forecast - Deficits from 2021 to end 2025
UBS lithium demand vs. supply forecast to 2030
Lithium market and battery news
On March 26, CNEVPOST reported:
CATL teases Kirin battery, says it has 13% higher capacity than 4680 batteries. CATL has launched its third generation of CTP (cell to pack) technology, which it internally calls the Kirin battery... saying the Kirin battery continues to lead the industry in system weight, energy density and volumetric energy density... In addition to teasing the Kirin battery, Wu said CATL's 1,000-kilometer range, heat-diffusion-free battery technology will be in mass production by 2023.
On March 29, Reuters reported:
India to invest in exploring lithium, cobalt mines in Australia. India has committed to jointly invest $6 million with the Australian government to explore lithium and cobalt mines in Australia over the next six months, in a bid to firm up supplies of key minerals needed to further its electric vehicle plans.
On March 31, Seeking Alpha reported:
Biden invokes Defense Production Act to boost EV battery production... the Biden administration officially said Thursday it will use the Defense Production Act to boost domestic production of critical materials for batteries needed to power electric vehicles and the transition to renewable energy. The decision adds lithium, nickel, cobalt, graphite and manganese to a list of covered items, which could help mining companies access $750M under the Act's Title III fund.
On March 31, the AFR reported: "US agrees to fund Australian critical minerals projects."
On April 4, Reuters reported:
Exclusive: Canada to invest C$2 billion on mineral strategy for EV battery supply chain. Canada's federal budget will include an investment of at least C$2 billion ($1.6 billion) for a strategy to accelerate the production and processing of critical minerals needed for the electric vehicle (EV) battery supply chain, two senior government sources said. Prime Minister Justin Trudeau's government, which is due to release its budget on Thursday, will make the investment to ramp up the extraction of processing of critical minerals including nickel, lithium, cobalt and magnesium...
Note: Probably meant to be manganese not magnesium.
On April 5, Kitco reported:
Battery metal shortage to last well into the next decade - Piedmont Lithium's Keith Phillips... In early 2020 the lithium miners announced a series of production cuts, but the market reversed itself. "It's really tremendous. I think a lot of us in the industry thought we would have a very strong market for a decade or so to come. I don't think we expected it to happen so fast. Prices are up 10x in about 18 months which is staggering," said Phillips. "Fundamentally, we have tremendous shortages of lithium chemicals that the battery and car companies need to produce all the electric cars they want to produce. These shortages are likely to last for years and years. I think well into the 2030s."
On April 9, Bloomberg Hyperdrive reported:
Tesla may start mining lithium as Musk cites battery metal cost. Nearly two years after Tesla Inc. outlined a plan to start mining for lithium, its chief Elon Musk signaled the electric car giant might finally take the plunge due to the skyrocketing cost of the battery metal.
On April 19, Fastmarkets reported: "China's Sichuan Yahua to acquire stake in Canada's Ultra Lithium to secure spodumene supply."
On April 19, Business Insider reported:
Rivian CEO warns the looming EV battery shortage will make the chip shortage feel like 'a small appetizer' for what's to come... Elon Musk has repeatedly warned battery supplies could impact electric car production... Now, automakers looking to branch out into electric cars could face a critical shortage of EV batteries, as well as the metals required to produce the roughly 1,000 pound lithium-ion batteries. "Put very simply, all the world's cell production combined represents well under 10% of what we will need in 10 years," Scaringe said, according to The Journal. "Meaning, 90% to 95% of the supply chain does not exist," he added.
On April 20, Seeking Alpha reported:
CEO Elon Musk on q1-2022-results-earnings-call-transcript... (Elon Musk states) So, right now, we think mining and refining lithium is -- appears to be a limiting factor...we’re looking carefully at all of the raw materials and trying to figure out how we can accelerate the total amount of raw materials needed to transition the world to sustainability. And I think we’ve got -- we don’t have enough time on this call to really go through all those details, but we are thinking about these things. And we think we’ll have some exciting announcements in the months to come...I certainly encourage entrepreneurs out there who are looking for opportunities to get into the lithium business. The lithium margins right now are practically software margins. I mean, if the -- I think it’s something -- I think there’s a -- I mean, -- correct me if I’m wrong, but I think we’re seeing cases where the spot lithium price is 10 times higher than the cost of extraction. So, (*not) like we’re talking 19% margins here. Can some -- can more people please get into the lithium business? It’s -- do you like minting money? Well, the lithium business is for you.
Note: *The SA written transcript missed the word "not" said just after the 43 minute mark. Elon's point is that lithium industry margins are way above 19% and the sector is becoming very lucrative for producers.
On April 20, Mining.com reported:
Musk appeals for more lithium production to meet battery demand... Battery production, and more specifically lithium, is the “fundamental limiting factor” for electric-vehicle adoption worldwide, Musk said on an earnings call with investors Wednesday.
On April 20, Mining.com reported:
Lithium prices pause in April, but not a sign of “wider market correction”. Benchmark says the slight downtrend in carbonate pricing “was not indicative of a wider market correction, but rather a temporary pause as a result of covid lockdowns in China, with expectations that prices will continue to increase in May if virus measures are eased."
On April 21, Mining.com reported:
Mexico nationalizes lithium mining. The President said his administration will review all lithium contracts, which casts a shadow of doubt over projects already being developed in the country, including the one held by Bacanora Lithium (LON: BCN) in the country’s northwest. The company, owned by China’s Genfeng Lithium, owns the giant Sonora project, which is slated to produce 35,000 tonnes of the metal per year starting in 2023.
On April 21, Green Car Congress reported: "Start-Up MOBI LATAM partners with EnergyX to develop Bolivian domestic lithium battery supply chain."
On April 21, Stockhead reported:
Shareholders to cash in as Prospect sells 87% of Arcadia to Chinese lithium-ion battery giant, Zhejiang Huayou Cobalt Co...Prospect Resources [ASX:PSC] has completed the sale of its 87% interest in the Arcadia Lithium Project, 38km east of Zimbabwe capital, Harare, to new energy giant Zhejiang Huayou Cobalt Co. The US$377.8 million transaction followed the payment of US$26.8 million in Zimbabwean capital gains tax and US$8 million to Sinomine Resource Group – relating to the offtake agreement between Prospect and Sinomine. Around US$342.9m was received on completion of the transaction.
On April 22, Bloomberg reported:
‘Mr. Lithium’ warns there’s not enough battery metal to go around... One person who’s been warning of a lithium shortage for a while is Joe Lowry...I believe there will be a day in the future when lithium is in oversupply, but it won’t be in this decade...You can build a battery factory in two years, but it takes up to a decade to bring on a lithium project.
On April 22, Benchmark Mineral Intelligence reported:
Lithium ion battery pipeline breaks the 6 TWh capacity barrier. Global lithium ion production capacity could reach over 6,000GWh (6TWh) by the end of the decade, based on current plans, as companies accelerate gigafactory construction in Europe and the US. Total lithium ion capacity existing or being built has doubled since the beginning of 2021...Battery capacity is currently growing at twice the speed of lithium raw material supply, however. A total of 6 TWh of annual battery production would require around 5 million tonnes of lithium, according to Benchmark. Production of lithium last year was around 480,000 tonnes of LCE.
Lithium miner news
On April 5, Seeking Alpha reported:
Albemarle, Mineral Resources to speed up restart at Australia lithium mine. Mineral Resources Ltd. (OTCPK:OTCPK:MALRY) said Tuesday that it and partner Albemarle will accelerate the restart of production at their jointly-held Wodgina lithium mine in Australia because of "unprecedented global customer demand for lithium products." Mineral Resources said it now expects first spodumene concentrate from Train 1 operations in May, earlier than its previous estimate of Q3 2022. Mineral Resources and Albemarle also agreed to accelerate a restart of Train 2, from which first production is expected in July; each train has a nameplate capacity of 250K metric tons. The companies also will assess timing for the startup of Train 3 and possible construction of Train 4 depending on global lithium market conditions later this year.
- Early 2022 - 50ktpa Kemerton Lithium Hydroxide Plant converter in WA due for completion (60:40 joint venture between Albemarle and Mineral Resources Limited).
- May 2022 - Wodgina Lithium Mine (60% ALB: 40% MIN) Train 1 plans to restart. Train 2 to restart in July 2022. Note the recent non-binding agreement will (if completes) move Wodgina to a 50% ALB: 50% MIN JV.
Sociedad Quimica y Minera de Chile (NYSE:SQM), Wesfarmers [ASX:WES] (OTCPK:WFAFY), Covalent Lithium (SQM/WES JV)
No significant news for the month.
- H2 2024 - Mt Holland production to begin (SQM/Wesfarmers JV) as well as their lithium hydroxide [LiOH] refinery.
Jiangxi Ganfeng Lithium [SHE:002460] [HK: 1772] (OTCPK:GNENF) (OTCPK:GNENY)
On April 6, SMM News reported:
Ganfeng Lithium’s lithium concentrate capacity will reach 900,000 mt. Ganfeng Lithium announced that the Company and its partner Mineral Resources Limited have agreed to upgrade the ore treatment capacity of the Mt Marion lithium spodumene project of the joint venture company RIM. Based on calculations, lithium concentrate capacity at the Mt Marion lithium spodumene project is expected to increase from 450,000 mt per annum to 600,000 mt per annum by April 2022. At the same time, RIM is planning a second phase of capacity expansion to 900,000 mt per annum on the basis of existing lithium concentrate capacity, which is expected to be completed by the end of 2022. In a recently released investor activity research form, Ganfeng Lithium mentioned that the Company achieved a total revenue of 11.162 billion yuan in 2021, up 102% year-on-year, and net profit attributable to shareholders of the listed company reached 5.228 billion yuan, up 410% year-on-year.
Investors can read my recent Trend Investing article on Ganfeng Lithium here.
(Chengdu) Tianqi Lithium Industries Inc. [SHE:002466]
No news for the month.
Livent Corp. (LTHM)[GR:8LV]
No significant news for the month.
Allkem [ASX:AKE] [TSX:AKE] (OTCPK:OROCF)(formerly Orocobre)
On April 1, Allkem announced:
Lithium carbonate and spodumene concentrate pricing update. Strong market conditions continue to positively impact the price received for lithium carbonate from the Olaroz Lithium Facility. The June quarter FY22 average price received for lithium carbonate is expected to be approximately US$35,000/t FOB1 on sales of approximately 3,500 tonnes. The preliminary March quarter FY22 sales price was approximately US$27,236/t FOB, 9% higher than the previous guidance. Similarly strong conditions in the spodumene market are supporting advanced discussions for spodumene concentrate pricing in the June quarter of approximately US$5,000/t SC6% CIF on sales of approximately 50,000 tonnes. March quarter sales of spodumene concentrate were completed at a price of approximately US$2,218/t SC6% CIF DMT which includes tonnes that were delayed from the December quarter.
On April 4, Allkem announced: "Olaroz resource upgraded 2.5x to 16.2 million tonnes LCE confirmation of strong project economics for Olaroz stage 2." Highlights include:
- "The 2022 Interim Upgraded Resource substantially expands Allkem’s resource in the Olaroz basin from 6.4 million tonnes [Mt] lithium carbonate equivalent [LCE] to 16.2 Mt LCE, with 5.1 Mt of Measured resource and 4.6 Mt of Indicated resource, with the remainder in Inferred resource status.
- Total Allkem resources at the Olaroz and immediately adjacent Cauchari basins are now 22.5 Mt LCE in all resource categories, making it one of the largest lithium resources in the world.
- The lithium grade of the Olaroz salar Measured resource (0-200 m) is 648 mg/l, with the underlying Indicated resource (200-350 m in the north, 200-450 m central and south) at 657 mg/L. The further underlying Inferred resource grade is 663 mg/l.
- The 2022 Interim Upgraded Resource is restricted to solely beneath the Olaroz salar surface. The resource estimate is limited at depth by the gravity geophysical survey basement topography, which drilling now suggests underestimates the basin depth.
- Exploration carried out by Allkem and Advantage Lithium (100% Allkem) demonstrates brine at economic concentrations continues over extensive areas south beneath the Archibarca delta towards Allkem’ s Cauchari Resource and north towards the Rosaria delta, with the resource open in both directions.
- As well as supporting the 25,000 tonnes per annum expansion in capacity of the Olaroz Lithium Facility to a total 42,500 tonnes per annum capacity, the 2022 Interim Upgraded Resource will together with Allkem’s Cauchari resources, underpin further expansion of the Olaroz Lithium Facility to meet soaring global demand.
- Economic analysis of the Stage 2 expansion (not including Stage 1, AKE 66.5%) demonstrates a pre-tax NPV10% real of US$2,674 million and pre-tax IRR of 192% on a 100% basis. Post tax analysis delivers an NPV10 of US$1,704 million and an IRR of 137% on a 100% basis."
On April 4, Allkem announced:
Sal de Vida capacity increased to 45ktpa in two stages...Key changes from the 2021 Feasibility Study includes an increase in total planned capacity to 45,000 tpa, an increase in the capacity of Stage 1 and consolidation of Stages 2 and 3 into a single expansion...(Stage 1) Pre-tax Net Present Value (“NPV”) of US$1.23 billion at a 10% discount rate and pre-tax Internal Rate of Return (“IRR”) of 50%...Pre-tax NPV of US$1.81 billion and pre-tax IRR of 38% for Stage 2 on a standalone basis. Revised development capital for Stage 2 of US$524 million and cash operating costs of US$3,280 per tonne LCE across both Stages 1 and 2...Stage 1 construction of the ponds commenced in January 2022 and targeting Stage 1 first production in H2 CY23...Stage 2 construction anticipated to commence upon completion of Stage 1 construction with first Stage 2 production approximately 24 months thereafter.
On April 14, Allkem announced: "March 2022 quarterly activities report." Highlights include:
- "Plans to increase lithium production 3-fold by 2026 and maintain a 10% share of the global lithium market over the next decade were outlined at an investor briefing in early April...
- ~33,000 metre resource and exploration drilling program at Mt Cattlin to commence in April and will test immediate mine-life extension opportunities."
- "Mt Cattlin produced 48,562 dry metric tonnes (“dmt”) of spodumene concentrate and shipped 66,011 tonnes in the March quarter, generating record revenue of US$143.8 million with a gross cash margin of 84% based on average pricing of US$2,178/dmt CIF.
- June quarter pricing is approximately US$5,000/dmt SC6% CIF on sales of ~50,000 dmt..."
- "Olaroz Stage 2 reached 77% construction completion with first production expected to commence in H2 CY22.
- At Naraha, plant commissioning works will occur during the June quarter with first production in the September quarter.
- Pond construction at Sal de Vida Stage 1 commenced in January and first production from Stage 1 is anticipated to occur by H2 CY23.
- Permitting progressed at James Bay with additional information provided to both federal and provincial authorities during the quarter."
- "Group revenue for the quarter was approximately US$235 million and group gross operating cash margin1 was approximately US$189 million reflecting strong market demand and high sales prices.
- At 31 March group cash was US$421.3 million. A further $73.4 million of cash was collected in early April from a Mt Cattlin shipment that occurred in March.
- Strong balance sheet and future cashflow expected to fund delivery of growth strategy."
Upcoming catalysts include:
- Q3 2022 - Naraha lithium hydroxide plant (10ktpa) commissioning (ORE share is 75%).
- H2 2022 - Olaroz Stage 1 expansion commissioning followed by a 2 year ramp to 25ktpa. When combined with Stage 1 total capacity will be 42.5ktpa.
- H2 2023 - Sal De Vida Stage 1 production targeted to begin and ramp to 15ktpa. SDV Stage 2&3 combined will begin about 2025 and ramp to an additional 30ktpa. Total combined when completed will be 45ktpa.
Pilbara Minerals [ASX:PLS] (OTC:PILBF)
On March 31, Pilbara Minerals announced: "Mid-stream project update. Scoping study supports potential in value-added path beyond spodumene concentrates at Pilgangoora." Highlights include:
- "Scoping Study completed for the Mid-Stream Project process pathway and potential Demonstration Plant.
- Scoping Study provides preliminary support for the construction of a demonstration scale chemicals facility at Pilgangoora, producing value-added lithium phosphate salts via an innovative refining process.
- Lithium phosphate salt selected as the preferred product, which is aiming to support a highly viable feedstock for a number of battery chemicals manufacturers, including the lithium ferro phosphate [LFP] battery cathode manufacturing industry, as well as lithium carbonate and lithium hydroxide production...
- The contained lithia content of the product is expected to increase from ~5.7-6.0% in spodumene concentrates to >36% in lithium phosphate salts, thereby optimising offshore product logistics, reducing associated carbon emissions, and minimising waste in the destination market...
- Consistent with the previously announced MoU, Pilbara Minerals and Calix intend to move forward with negotiations to establish a Joint Venture [JV] to potentially develop a demonstration plant, and for the commercialisation of the Mid-Stream process technology globally."
On April 11, Pilbara Minerals announced: "Update on downstream Joint Venture with POSCO." Highlights include:
- "Construction and ramp up budget provided by the JV Company and accepted by Pilbara Minerals, satisfying a material condition precedent.
- Remaining key conditions precedent for completion and formation of the incorporated joint venture (JV or JV Company) now finalised, with completion of equity subscriptions in the JV Company scheduled for mid-April 2022.
- JV to construct and operate a 43ktpa LHM primary lithium hydroxide chemical processing facility (Conversion Facility) in Gwanyang, South Korea, with detailed engineering underway and major civil and construction works expected to commence in the June 2022 Quarter.
- Commissioning of Conversion Facility expected from late 2023.
- Participation in JV supports Pilbara Minera ls ’ strategic objective of becoming a fully integrated lithium raw materials company and diversifies the Company’s global customer base, providing exposure to the rapidly growing South Korean lithium chemicals market."
On April 11, Pilbara Minerals announced: "Pilgangoora production and shipping update." Highlights include:
- "March Quarterly production of 81,431 dry metric tonnes (dmt) of spodumene concentrate, within previous guidance of 75-90,000dmt.
- Shipments for the March Quarter totalled 58,383dmt, following a port delay in loading a ~20,000dmt cargo which was scheduled for late March (which departed Port Hedland on 7 April).
- Average March Quarter realised sales price of ~US$2,650/dmt (CIF China, SC6 basis)...
- Pilgangoora operation remains on track to achieve FY22 annualised production guidance of 340-380,000dmt...
- Ngungaju fines flotation circuit load commissioning commenced on 9 April 2022.
- Next BMX Auction targeting the last week of April 2022."
On April 13, Pilbara Minerals announced:
POSCO downstream Joint Venture transaction completed...To fund its 18% equity participation in the JV, Pilbara Minerals has today drawn down A$79,603,050 under the Convertible Bond Agreement with POSCO and will, in accordance with the terms of the Convertible Bond Agreement, issue 79,603,050 convertible bonds in favour of POSCO’s wholly owned subsidiary, POS-LT Pty Ltd.
- Late 2023 - Plan to commission production of POSCO/Pilbara Minerals (18%) JV LiOH facility in Korea.
Mineral Resources [ASX:MIN] (OTCPK:MALRF)
Mt Marion Mine (50% MIN: 50% Ganfeng). Wodgina Lithium Mine (60% ALB: 40% MIN) plans to restart in May 2022. (Note the recent non-binding agreement will (if completes) move Wodgina to a 50% ALB: 50% MIN JV). The 50ktpa Kemerton Lithium Hydroxide refinery (60% ALB: 40% MIN) is due for first sales in H2, 2022.
See news above in Albemarle section regarding Wodgina earlier restart. ("Albemarle, Mineral Resources to speed up restart at Australia lithium mine.")
On April 22, Mineral Resources announced: "Quarterly exploration and mining activities report January to March 2022 [Q3 FY22]." Highlights include:
- "Mining Services production volumes of 63.4Mt were 16% higher than the prior corresponding period [pcp]. The Mining Services business remains on target to meet FY22 production guidance of 275-290Mt.
- The Mt Marion Lithium Project produced 104k dmt and shipped 94k dmt of spodumene concentrate during the quarter. Mt Marion remains on target to meet FY22 guidance of 450-475kt and costs of A$570-615/dmt (CFR ex-royalties). Mt Marion’s average realised spodumene concentrate price for the quarter was US$1,952/dmt, 69% higher qoq.
- MinRes took possession of its 51% share of the Mt Marion spodumene concentrate offtake in February 2022, which will be converted into lithium hydroxide in China under a tolling agreement. Refer to the ASX Announcement on 9 February 2022.
- The Company signed a non-binding letter agreement with Albemarle Corporation (Albemarle) to explore a potential expansion of the MARBL Lithium Joint Venture [MARBL JV]. Refer to the ASX Announcement on 9 February 2022.
- Wodgina shipped 22k dmt of spodumene concentrate from existing stockpiles during the quarter at an achieved price of US$2,200/dmt.
- First new spodumene concentrate from Wodgina Train 1 is expected in May 2022. The MARBL JV has agreed to accelerate the resumption of production from Train 2, with first spodumene concentrate expected in July 2022.
- Third-party spodumene concentrate feed was introduced into the Kemerton Lithium Hydroxide Plant, which MinRes owns 40/60 with Albemarle. First product from Train 1 is expected by May 2022. Train 2 is targeted for mechanical completion in Q2 of FY23, with product expected in that quarter."
Investors can read my quite recent Trend Investing article on Mineral Resources here.
AMG Advanced Metallurgical Group NV [NA:AMG] [GR:ADG] (OTCPK:AMVMF)
No significant news for the month.
You can view the latest company presentation here.
- 2022 - Progress on lithium projects in Zeitz, Germany and in Zanesville, Ohio, both in the planning stage.
- Q2 2023 - Stage 2 production at Mibra Lithium-Tantalum mine (additional 40ktpa) forecast to begin.
- Q3 2023 - Lithium hydroxide facility in Bitterfeld-Wolfen, Germany with production set to begin.
Lithium Americas [TSX:LAC] (LAC)
On April 14, Lithium Americas announced: "Lithium Americas submits formal application for Department of Energy ATVM Loan Program..."
- H2 2022 - Thacker Pass FS and early construction works planned to commence.
- H2 2022 - Cauchari-Olaroz lithium production to commence and ramp to 40ktpa. From 2025 a Stage 2 20ktpa+ expansion is planned.
- 2023 - Possible lithium clay producer from Thacker Pass Nevada (full ramp by 2026).
NB: Ganfeng Lithium (51%) and Lithium Americas (49%) own the JV company Minera Exar S.A., which owns 91.5% interest and is entitled to 100% of the production from the Cauchari-Olaroz Project. The 8.5% interest is owned by Jujuy Energia y Mineria Sociedad del Estado (“JEMSE”) (a company owned by the Government of Jujuy province).
Argosy Minerals [ASX:AGY][GR:AM1] (OTCPK:ARYMF)
Argosy has an interest in the Rincon Lithium Project in Argentina, targeting a fast-track development strategy. Argosy is now producing at a small scale and ramping to 2,000tpa lithium carbonate starting June 2022.
On April 1, Argosy Minerals announced: "Rincon 2,000tpa Li2CO3 operational update." Highlights include:
- "67% of total construction works now complete - first production of battery quality Li2CO3 product targeted from mid-2022.
- 2,000tpa lithium carbonate process plant development works progressing on schedule and budget."
On April 6, Argosy Minerals announced: "Tonopah Lithium Project passive seismic survey to commence." Highlights include:
- "...Passive seismic survey data to complement MT survey data previously completed – for stronger delineation of the three MT anomalous targets prospective for lithium brine accumulation.
- Next stage exploration works to then comprise drilling the lithium brine targets to determine lithium brine potential – set for later-2022.
- Significant opportunity to leverage Argosy’s lithium brine processing technology at strategic USA project, adjacent to Albemarle’s Silver Peak lithium operation."
Core 100% owns the Finniss Lithium Project (Grants Resource) in Northern Territory Australia. Significantly, they already have an off-take partner with China's Yahua (large market cap, large lithium producer), who has signed a supply deal with Tesla. The Company states they have a "high potential for additional resources from 500km2 covering 100s of pegmatites." Fully funded and starting mining with a planned Q4 2022 production start.
On March 31, Core Lithium Ltd. announced: "Finniss Lithium Project exploration update." Highlights include:
- "Assays from reverse circulation [RC] drilling at Bilatos and other southern regional targets received.
- First lithium drill assay results from new Bilatos Prospect demonstrate encouraging thickness and grade and include: 24m @ 2.24% Li2O in SRC068. 30m @ 1.11% Li2O in SRC065. 12m @ 1.09% Li2O in SRC067. 15m @ 0.80% Li2O in SRC063.
- Further Finniss lithium exploration and resource drilling updates expected over the coming weeks as results are received.
- Core is planning an active exploration program at Finniss over the coming months."
On April 4, Core Lithium Ltd. announced: "Finniss Project Development update." Highlights include:
- "Development earthworks are on schedule, with the establishment of access roads and water pipelines, while water management infrastructure, administration areas and communication facilities are well advanced.
- Earthworks for the DMS plant pad is due for completion in April 2022.
- Construction of the DMS plant set to commence immediately after pad completion.
- First production continues to be anticipated prior to the end of calendar year 2022."
On April 11, Core Lithium Ltd. announced: "Core acquires new NT lithium project near Finniss." Highlights include:
- "Core Lithium has entered into a binding agreement to acquire the Shoobridge Project EL31407 ("Shoobridge"), located approx. 80km SSE of the Finniss Lithium Project.
- Shoobridge contains historic pegmatite tin-tantalum surface workings which have not been tested for their lithium potential.
- The acquisition of Shoobridge is consistent with Core's objective of continuing to increase lithium resources."
- Late 2022 - Lithium spodumene production at Finniss targeted to begin.
Sigma is developing a world-class lithium hard rock deposit with exceptional mineralogy at its Grota do Cirilo Project in Brazil.
On April 4, Sigma Lithium announced: "Sigma Lithium advances towards near term production and completes construction of 100% of the plant foundation earthworks on schedule; reports 2021 annual results from a pivotal year." Highlights include:
- "Concluded construction of 100% of the foundation earthworksforthePhase1 Production Plant (“Phase 1 Plant”),remaining on schedule and on budget.Phase 1 Plant commissioning is forecasted to commence at the end of 2022. Construction moves forward to civil works to be followed by plant mechanical structure in June 2022. Currently employing 300 people, planned to increase to 500 people.
- Sigma Lithium is fully equity-funded for the construction of the Phase 1 Plant.Completed the equity financing round, raising C$137mmin December 2021 (including an investment by funds managed by BlackRock for C$64mm). Ordered certain long lead items, to minimize potential supply-chain related delays.
- The Company is on track to deliver near term production of Battery-Grade Sustainable Lithium,with plans to significantly increase scale: Phase 1: Initiating production:up to 230,000tpa of Battery-Grade Sustainable Lithium within less than 12 months. Phase 2: Increasing production: combining Phase 1 + Phase 2 to potentially double annual production to 460,000 tpa of Battery-Grade Sustainable Lithium Phase 3: Unlocking further growth: completing economic assessment of additional production capacity for 2024 based on current 52Mt mineral resource base plus an additional 30,000 m drilling campaign on adjacent deposits.
- Agreed on a direct commercial arrangement with LG Energy Solution, the world ́s largest advanced battery manufacturer: a binding offtake term sheet linked to lithium hydroxide prices. Offtake on a take or pay basis for up to 100,000 tpa.
- Sigma Lithium continued to be recognized for its leadership role in global sustainability on lithium materials and mining: Sigma Lithium will be the first lithium company to dry stack 100% of its tailings, avoiding environmentally controversial tailing dams. Presented its case study of circular economy with dry stacked tailingsatCOP-26 in Glasgow, the Investment COP. Participated in the United Nations Dialogue on Energy from the General Assembly in NYC."
Near term catalysts for second quarter 2022:
- "Technical: Updated Phase 1 Feasibility Study with FEL3 detailed engineering and construction Capex. Pre-Feasibility Study with combined economics of Phase 1 and Phase 2. Updated mineral resource statement for Phase 3 with results of ongoing drilling campaign."
On April 11, Sigma Lithium announced: "Sigma Lithium updates feasibility study with Phase 1 after-tax NPV of US$1.6 bn, increasing mineral reserves 2.6x to 34mt and supporting Phase 1 and Phase 2 combined potential production capacity increase to a total of 450,000 tpa." Highlights include:
Planned Phase 1 Production and Estimated Phase 2 Scale Up:
- "Updated Phase 1 Feasibility Study base case to produce 230,000 tpa (34,000 LCE) of 6% Battery Grade Sustainable Lithium for 8 years. After-tax NPV of Phase 1 (standalone): US$1.6 billion (potentially increasing to US$1.9 billion). After-tax IRR of Phase 1 (standalone): 424%. Payback period of 4 months. Phase 1 is financially robust as a standalone operation even before factoring in a potential Phase 2 production expansion.
- Optionality to increase Phase 1 production to 265,000 tpa of Battery Grade Sustainable Lithium, in line with current market specifications, with the following NPVs: @ 6.0% Li2O: production of 230,000 tpa, NPV of US$1.6 billion. @ 5.7% Li2O: production of 242,000 tpa, NPV of US$1.7 billion. @ 5.5% Li2O: production of 251,000 tpa, NPV of US$1.8 billion. @ 5.2% Li2O: production of 265,000 tpa, NPV of US$1.9 billion.
- Phase 2 has the potential for additional production of 220,000 tpa (33,000 LCE), which is estimated to scale up the Company’s total annual production to 450,000 tpa (67,000 LCE) of 6% Battery Grade Sustainable Lithium. Low-risk execution strategy: Phase 2 construction of production plant foundation earth works could commence concurrent with Phase 1 commissioning. Multiple workstreams advancing with the objective of preparing for Phase 2 production in the near term.
- Updated Phase 2 Pre-Feasibility study with combined Phase 1 and Phase 2 economics to be published early Q2-2022."
Mineral Reserves and Mineral Resource Increase:
- "Sigma Lithium has increased its estimated total mineral resources to 58.9Mt, including 33.6 Mt of mineral reserves1, while preserving its competitive advantage of high-grade & high-purity deposits, as demonstrated by Phase 2 DMS metallurgical results. 25.3 Mt of Proven mineral reserves at an average grade of 1.44% Li2O. 8.3 Mt of Probable mineral reserves at 1.39% Li2O. 50.4 Mt of Measured and Indicated mineral resources at 1.40% Li2O. 8.6 Mt of Inferred mineral resources at 1.43 % Li2O.
- Company’s confidence in the potential Phase 2 production expansion increased as a result of: Maiden mineral reserve for the Phase 2 Deposit of 21.8 Mt. 30% increase of mineral resource for the Phase 2 Deposit. Additional DMS metallurgical tests were completed for Phase 2 achieving exceptional results indicating lithium recoveries of approximately 60%..."
Phase 1 Updated Remaining CAPEX and Costs (FEL3 Precision):
- "Updated Phase 1 CAPEX [FEL3] to reach commercial production of US$123.1 million, in line with expectations when compared to US$113.6 million total capex estimated in the Feasibility Study Technical Report dated November 2019 [FEL2] (the “2019 FS”). Sigma Lithium remains fully funded to finalize construction of commercial Production Plant.
- Potential to be one of the lowest-cost producers globally of Battery Grade Lithium Concentrate. Average Cash Costs of US$357/t FOB Production Plant (at operation’s truck loading bay). Average All-in Sustaining Costs of US$463/t CIF China."
- Late 2022 - Production targeted to begin at the Grota do Cirilo Project in Brazil and ramp to 230,000tpa spodumene.
Investors can read the latest company presentation here or my Trend Investing article Sigma Lithium Looks To Be A Potential 2022 Lithium Producer With Significant Next Stage Expansion Potential back when Sigma was trading at C$5.00.
Lithium miner ETFs
Global X Lithium & Battery Tech ETF (NYSEARCA:LIT) - Price = US$67.26.
The LIT fund was lower in April. The current P/E is 23.52. My model forecast is for lithium demand to increase 4.3 fold between end 2020 and end 2025 to ~1.5m tpa, and 10.4x this decade to reach ~3.5m tpa by end 2030 (assumes electric car market share of 32% by end 2025 and 80% by end 2030).
Note: A Nov. 2020 UBS forecast is for "lithium demand to lift 11-fold from ~400kt in 2021 through to 2030."
The recent pullback in the LIT fund looks like an appealing opportunity for investors given the huge growth forecast (11x) for lithium this decade.
LIT Fund 10 year price history
The Amplify Lithium & Battery Technology ETF (BATT)
The BATT ETF is currently on a P/E of 22.54. It is a broad based fund also worth considering. On their website they state: "BATT is a portfolio of companies generating significant revenue from the development, production and use of lithium battery technology, including: 1) battery storage solutions, 2) battery metals & materials, and 3) electric vehicles. BATT seeks investment results that correspond generally to theEQM Lithium & Battery Technology Index (BATTIDX)."
April saw slightly lower China lithium chemical prices but significantly higher lithium spodumene prices, mostly due to COVID-19 induced EV production halts in China during the last month.
Highlights for the month were:
- CATL teases Kirin battery, says it has 13% higher capacity than 4680 batteries.
- India to invest in exploring lithium, cobalt mines in Australia.
- Biden invokes Defense Production Act to boost EV battery production.
- Canada to invest C$2 billion on mineral strategy for EV battery supply chain.
- Battery metal shortage to last well into the next decade - Piedmont Lithium's Keith Phillips.
- Rivian CEO warns the looming EV battery shortage will make the chip shortage feel like 'a small appetizer' for what's to come.
- Musk appeals for more lithium production to meet battery demand.
- Mexico nationalizes lithium mining.
- Mr. Lithium, Joe Lowry, tells Bloomberg: "I believe there will be a day in the future when lithium is in oversupply, but it won’t be in this decade."
- BMI: Lithium ion battery pipeline breaks the 6 TWh capacity barrier by 2030 and will require 5 million tpa of lithium by 2030 (10.4x increase on 2021 levels). Battery capacity is currently growing at twice the speed of lithium raw material supply.
- Albemarle/Mineral Resources to speed up restart at Australia lithium mine, Train 1 to start in May 2022, Train 2 in July. Each train is 250ktpa spodumene.
- Ganfeng/Mineral Resources to expand Mt Marion production to 900,000tpa by the end of 2022.
- Allkem Mt Cattlin June quarter pricing is approximately US$5,000/dmt SC6% CIF on sales of ~50,000 dmt. Allkem's Olaroz resource upgraded 2.5x to 16.2 million tonnes LCE. Allkem plans to increase lithium production 3-fold by 2026.
- Pilbara Minerals progresses mid-stream project JV with Calix. Downstream JV with POSCO completed, plan to construct and operate a 43ktpa LiOH facility in South Korea, construction works expected to commence in the June 2022 Quarter.
- Argosy Minerals Rincon Lithium Project 67% of total construction works complete, first production of battery quality Li2CO3 product targeted from mid-2022.
- Core Lithium Finniss Project on target for late 2022 production start. Core acquires new NT lithium project ("Shoobridge Project') near Finniss.
- Sigma Lithium updates feasibility study with Phase 1 after-tax NPV of US$1.6 bn, increasing mineral reserves 2.6x to 34mt and supporting Phase 1 and Phase 2 combined potential production capacity increase to a total of 450,000 tpa. Increased estimated total mineral resources to 58.9Mt.
As usual all comments are welcome.
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Analyst’s Disclosure: I/we have a beneficial long position in the shares of GLOBAL X LITHIUM ETF (LIT), AMPLIFY LITHIUM & BATTERY TECHNOLOGY ETF (BATT), ALB, JIANGXI GANFENG LITHIUM [SHE: 2460], ASX:AKE, ASX:PLS, ASX:MIN, LIVENT (LTHM), ADVANCED METALLURGICAL GROUP NV (AMS:AMG), TSX:LAC, ARGOSY MINERALS [ASX:AGY], ASX:LTR, ASX:CXO, ASX:SYA, ASX:PLL, ASX:NMT, SIGMA LITHIUM [TSXV:SGMA], VULCAN ENERGY RESOURCES [ASX:VUL], GALAN LITHIUM [ASX:GLN], SAVANNAH RESOURCES [XETRA:SAV], LITHIUM SOUTH DEVELOPMENT CORP. [TSXV:LIS], CRITICAL ELEMENTS LITHIUM [TSXV:CRE], WINSOME RESOURCES [ASX:WR1], INTERNATIONAL LITHIUM [TSXV:ILC], ARENA MINERALS [TSXV:AN], ALPHA LITHIUM [TSXV:ALLI], GLOBAL LITHIUM RESOURCES [ASX:GL1], LITHIUM ENERGY LIMITED [ASX:LEL], EUROPEAN METAL HOLDINGS [ASX:EMH], EUROPEAN LITHIUM [ASX:EUR], FRONTIER LITHIUM [TSXV:FL], METALS AUSTRALIA [ASX:MLS], GREEN TECHNOLOGY METALS [ASX: GT1], ESSENTIAL METALS [ASX:ESS], AVALON ADVANCED MATERIALS [TSX:AVL], SNOW LAKE LITHIUM (LITM), FREYR BATTERY (FREY) either through stock ownership, options, or other derivatives. 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.
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