• Albemarle might have to shut its German plant if EU declares lithium hazardous material
  • Drilling at Latin Resources Salinas project has returned economic grade results as high as 2.27% lithium oxide
  • Auroch Minerals finalises acquisition of an 80% stake in the Nevada lithium project

 

All your ASX lithium news for Wednesday, June 8

 

Lithium producer Albemarle might have to shut down its Langelsheim plant in Germany if the metal used in electric vehicle batteries is declared a hazardous material by the European Union, the company’s finance chief told Reuters.

Lithium’s role in electric vehicles makes it an important commodity in meeting global targets to cut carbon emissions, and it was added to the EU’s list of critical raw materials in 2020.

But the European Commission is currently assessing a proposal by the European Chemicals Agency (ECHA) to classify lithium carbonate, chloride and hydroxide as dangerous for human health.

This would mean a spanner in the works in the form of restrictive regulatory framework for lithium use at a time when the EU is aiming to be self-sufficient in electric vehicle batteries by 2025.

 

More regulations mean more costs for processing

The proposal doesn’t ban lithium imports, but if legislated will add to costs for processors from more stringent rules controlling processing, packaging and storage.

“Albemarle would no longer be able to import our primary feedstock, lithium chloride, putting the entire (Langelsheim) facility in jeopardy of closure,” said Chief Financial Officer Scott Tozier said.

“With sales of approximately $500 million annually, the economic impact to Albemarle from the potential closure would be significant.”

The Langelsheim plant employs more than 600 people and accounts for 8% of Albemarle’s projected 2022 net sales.

 

A hurdle for the EU supply chain

Tozier said the classification would “hinder the localisation of the EU battery supply chain, and instead move the process to a non-EU location, thereby creating the need to import.”

“Future battery recycling and cathode manufacturing would move outside of the EU. Albemarle would not be able to convert materials locally, and any EU lithium raw materials would need to be exported to create cathodes,” he said.

EU member states are currently giving their views on the proposal to a committee on July 5-6, with a final decision expected at the end of 2022 or beginning of 2023.

 

Here’s how ASX lithium stocks were tracking today:

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A total of 32 stocks were in the green today, 60 were in the red and 37 failed to move the needle.

 

Who’s got news out today?

 

LATIN RESOURCES (ASX:LRS)

The latest diamond drill results released by the company from the northern extremities of Colina prospect at its Salinas project in Brazil have returned seriously economic grade results as high as 2.27% lithium oxide.

“We are continuing to get excellent high-grade results in from our sampling, and now have confirmed high-grade lithium intercepts over a strike length of approximately 900m and combined with drilling further to the south showing good spodumene mineralisation in drill core, we now have a strike of over one kilometre to test with our resource definition drilling,” LRS exploration manager Tony Greenaway said.

“The more we drill at Colina, the more confident we are becoming that we are on to something very significant. We are working with a range of consultant groups, including mining and metallurgical groups to commence preliminary study work.”

Drilling is now in resource definition mode, with Latin aiming to test the full strike extent of the pegmatite to 400m down dip with 100 by 50m spacing.

That drilling will be used to calculate a maiden resource for Colina, due for release in December this year.

 

AUROCH MINERALS (ASX:AOU)

The company has completed the acquisition of an 80% stake in the Nevada Lithium Project (NLP) which consists of four prospect areas covering the same geology that is known to host other major lithium deposits in the region, including American Lithium Corporation’s TLC project and Ioneer Resources’ (ASX:INR) Rhyolite Ridge project.

Albemarle Corporation’s Silver Peak Lithium Mine – currently the only producing lithium mine in North America – is around 45 km to the west of the NLP.

MD Aidan Platel said the company is “very excited by the potential of the NLP to host significant lithium mineralisation in a stable pro-mining jurisdiction in Nevada, USA.”

“We look forward to getting on the ground next month and commencing the initial drill program as soon as possible!”

 

LRS and AOU share prices today:

 

 

At Stockhead we tell it like it is. While Latin Resoures and Auroch Minerals are Stockhead advertisers, they did not sponsor this article.

 

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