Eye on Lithium: Australia unveils strategy to drive EV demand growth

Link copied to
clipboard

• Australia unveils first National Electric Vehicle Strategy to boost uptake
• Lithium chemical prices might be bottoming out
• Sayona upgrades Moblan lithium resource

All your lithium news, Wednesday April 19.

Increased electric vehicle uptake in Australia is the end goal of the Federal Government’s first National Electric Vehicle Strategy, which seeks to encourage greater use of cleaner, cheaper-to-run vehicles.

Key to this strategy is the introduction of a Fuel Efficiency Standard that will require new cars to meet lower emissions when running.

This will address one of green lobby’s bugbears, namely that Australia is just one of two developed countries – the other being Russia – that do not have fuel efficiency standards.

As it is, new Australian cars use 40% more fuel than cars in the European Union, 20% more than cars in the US and 15% more than their counterparts across the Tasman.

Introducing fuel efficiency standards will significantly reduce emissions from new cars while reducing fuel costs.

That it will also make EVs more attractive certainly doesn’t hurt, either.

The strategy also looks to reduce barriers to electric vehicle uptake, whether it be demand, supply or infrastructure.

“This strategy delivers on our commitment to provide greater choice for Australians to drive cars that are cleaner and cheaper to run,” Minister for Climate Change and Energy Chris Bowen said.

Australia’s National Electric Vehicle Strategy comes as the US Environmental Protection Agency proposed stricter emissions standards for cars and trucks to avoid almost 10 billion tonnes of CO2 emissions, a move which will likely increase demand for EVs.

The EPA estimates that this could lead to 67% of new sedans, crossovers, SUVs, and light trucks being electric by 2032 along with 50% of vocational vehicles such as buses and garbage trucks.

Benchmark Minerals believes this could increase forecast lithium ion battery demand by 78% to over 1 terawatt-hour by 2032 compared to its base case forecast.

Lithium pricing bottoming up

Meanwhile, there are signs that the decline in lithium chemical pricing in China is ending after prices fell by over two-thirds in just five months.

Bloomberg noted that thin stockpiles and improved prospects for battery storage and EVs suggest that demand might recover, which could lead to a recovery in prices.

This was backed by Benchmark Minerals noting that the recent Chinese price correction is “not emblematic of the entire market” while citing the high cost of mining, the need to rebuild inventories and a brighter outlook for battery storage and EV sales as the energy transition progresses.

Here’s how ASX lithium stocks are tracking:

Lithium leaned strongly towards the positive today with 51 companies in the green compared to the 35 companies posting share price losses. The remaining 67 companies were unchanged.

WHO’S GOT NEWS OUT?

Sayona Mining (ASX:SYA)

Sayona now has one of North America’s largest lithium resources with resources at its Moblan project in Quebec now standing at 70.9 million tonnes grading 1.15% Li2O.

This includes higher grade tonnage opportunities with Measured, Indicated and Inferred Resource of 51.4Mt at 1.31% Li2O.

While sizeable, the company has identified opportunities to expand and build the Mineral Resources proximal to the known Moblan and Moleon deposits, where exploration has indicated that lithium mineralisation may extend to the north, northeast and at depth.

Additional diamond drilling could potentially upgraded Inferred Resources to the higher confidence Indicated category and identify additional mineral resources down-plunge and in the vicinity of currently known mineralisation.

Vulcan Energy (ASX:VUL)

Vulcan has confirmed that a number of government-backed Export Credit Agencies have confirmed their in-principle support of its Phase One Project financing.

Bpifrance Assurance Export (the French ECA), SACE (Italy’s government ECA), and Export Development Canada, have all confirmed their interest in funding Vulcan’s project.

This is based on the company’s lithium offtake agreements with automakers Stellantis and Renault, and its strategic importance to the French Automotive industry, the eligibility of Vulcan’s project to France’s Garantie des Projets Stratégiques, which seeks to support projects that have a national interest for the French economy in France and abroad.

Total Capex for Phase 1 is estimated at €1.5bn with Vulcan targeting a debt to equity ratio of 65:35.

Cygnus Metals (ASX:CY5)

Drilling at Cygnus’ Pontax project in Quebec’s James Bay region have returned the best ever intersection of 23.4m grading 1.4% Li2O from 367.8m.

The results demonstrate multiple wide zones of stacked pegmatite mineralisation and will feed into the resource model ahead of publication in the middle of this year.

Extensive exploration programs are being planned for across high priority projects including Pontax, Auclair and Sakami.

This work will include a combination of geophysics, mapping, sampling and drilling.

Lithium Energy (ASX:LEL)

The fourth and fifth holes in Lithium Energy’s 10-hole drill program at the Solaroz project in Argentina have both returned significant intersections of conductive brines.

SOZDD004 drillhole has intersected 210m of conductive brines to date with 158m encountered in the upper aquifer from a depth of 120m while another 52m has been intersected to date in the Deep Sand Unit from 332m.

Likewise, SOZDD005 has intersected 163m of conductive brines in the upper aquifer from 110m and 38.5m of brines in the Deep Sand Unit from 312m.

Conductive brines in both holes are generally increasing in conductivity and density at depth, as drilling progresses into the Deep Sand Unit.

MetalsGrove Mining (ASX:MGA)

Reverse circulation drilling has intersected multiple stacked spodumene pegmatites at Metals Grove’s Upper Coondina lithium project south of Mable Bar, Western Australia.

Further exploration including detailed geophysics and structural mapping is required to delineate the main zone, high-grade mineralisation lithium-bearing pegmatites.

Planning is also underway to start follow-up drilling to test additional pegmatite structures within the high-priority target areas.

Green Technology Metals (ASX:GT1)

The company has announced a maiden Mineral Resource Estimate of 4.5Mt at 1.01% Li20 and 110ppm Ta2O5 over the first 1.5km strike of the McCombe deposit within its Root lithium project in Ontario.

Root is around 200km west of the company’s flagship Seymour project, and brings the total mineral resources across both lithium projects to a solid 14.4 million tonnes.

GT1 plans to utilise the upcoming field season to expand the exploration area to the northern half of Root which was acquired in 2022 and consists of 2993ha (29.9km2) of prime lithium real estate within the Lake St Joseph greenstone belt within the Uchi Domain.

Koba Resources (ASX:KOB)

Detailed interpretation of interpretation of geological and hyperspectral data at Koba’s Python lithium project in WA’s Pilbara region has generated 28 high priority pegmatite targets and an additional 36 priority pegmatite targets.

The company intends to start initial field programs over these new targets once e access is possible following the recent cyclone.

Programs will include the investigation, mapping and sampling of the pegmatite targets and the completion of a project-wide stream sediment sampling undertaking.

Winsome Resources (ASX:WR1)

Winsome is increasing its lithium portfolio with the acquisition of the Tilly project in Quebec’s James Bay region.

The acquisition of Tilly about 20km from its Adina project takes the company’s total landholding up to 856.6km2.

While Tilly shares several geological similarities to Adina, it has seen little historical exploration.

Pan Asia Metals (ASX:PAM)

The Thailand Government has declared the establishment of mining zones over much of Pan Asia’s Reung Kiet project.

Notably, the mining zones captures the entire Reung Kiet and Bang I Tum mineralised trends and grant the company the right to submit Mining Lease applications and to conduct all activities relevant to establishing a mining business on its tenements.

share

• 
• 
• 
• 

Link copied to
clipboard

SUBSCRIBE

Get the latest Stockhead news delivered free to your inbox.

Name*

Email*

Hidden

Email Lists

Morning Update

Lunch Update

Market Close Update

Weekend Update

It's free. Unsubscribe whenever you want.

By proceeding, you confirm you understand that we handle personal information in accordance with our Privacy Policy.

You might be interested in

Mining

Up, Up, Down, Down: Everyone's a winner in an astounding April for major metals

May 2, 2024 | Josh Chiat

Mining

Resources Top 4: Strike busts up bourse on LEL lithium investment; WAK whacks home $7m raise

May 1, 2024 | Rob Badman

Mining

52pc premium: Lithium Energy scores top marks on value creation with sale of Solaroz for $97m

May 1, 2024 | Special Report