Eye on Lithium: Benchmark says carbonate still has the pricing premium over hydroxide
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All your ASX lithium news for Wednesday, February 16.
In its latest lithium price assessment, Benchmark Mineral Intelligence (BMI) said that battery grade carbonate pricing has maintained its premium above hydroxide so far this month.
Battery grade carbonate is at RMB 63,250/tonne ($9,925) in mid-February, despite growing atypical demand for the conversion of hydroxide into carbonate.
Essentially, BMI says this indicates that the continued downstream demand imbalance between the chemicals on the back of the resurgence of lithium iron phosphate (LFP) cathode use in China throughout 2021 and early 2022.
BMI expects rising lithium chemicals prices will continue to drive an increase in spodumene feedstock prices, “given that contract mechanisms commonly tie spodumene pricing to chemical pricing on a lagged timeline, further driving bullish market sentiment for chemicals pricing.”
Despite Chinese New Year, #lithium prices continue their rally in the first two weeks of February 2022, breaking records yet again
– Battery grade carbonate up a further 10.8% since the end of January to >$60/kg
– Hydroxide up another 11.5% in the same period to >$50/kg pic.twitter.com/kmZQtGQFcV
— Daisy Jennings-Gray (@daisy_benchmark) February 15, 2022
Who’s got news out today?
The near-term lithium miner has entered a supply deal with Elon Musk’s Tesla.
Tesla will purchase 100,000 tonnes spodumene in the first year, increasing to 150,000 tonnes per year in subsequent years. The initial 5-year term is expected to kick off in 2024.
It’s kind of a big deal – not only because the project has attracted a big-name EV manufacturer – but because the offtake represents about one-third of the project’s start-up SC6.0 production capacity of ~500ktpa.
“Tesla is a global leader and innovator in electric vehicles and having it sign up to become a significant customer is a tremendous achievement and another huge vote of confidence in the quality of the Kathleen Valley Project,” MD and CEO Tony Ottaviano said.
This stock was worth 2c per share back in April 2019. It has since gained an incredible 7,900%.
The predominantly gold-copper explorer has announced plans to purchase the Yule River lithium prospect in WA.
The project’s in close proximity (~5kms) to the Albermale (NYSE:ALB)/Mineral Resources (ASX:MIN) owned Wodgina Lithium deposit, and hosts the same rock types and historical rock chips of 2.45% lithium with 127 ppm tantalum and 480 ppm tin.
The company said that adding Yule River to the portfolio is a “fantastic opportunity to develop a project that is located in a known province for this essential material for the production of lithium-ion batteries which in turn occupies an increasingly important position in the renewable energy space.”
Avira plans to raise $2m via a placement to support exploration at Yule River and its other projects, as well as increasing working capital reserves.
The first diamond hole drilled at the company’s Salinas project in Brazil has intersected three separate spodumene rich pegmatites down dip from high-grade outcropping lithium.
“Our previous mapping and sampling has shown us that there is high-grade lithium in the mapped pegmatites within the project area over a strike extent of 1.2km, and this drilling has now confirmed the presence of additional thick pegmatites at depth,” MD Chris Gale said.
“Our team in Brazil have proved the concept of lithium bearing pegmatites so Latin Resources could now potentially be on the cusp of a major new lithium discovery in the Bananal Valley.”
The company will complete 14 diamond holes and 2,000m to test the full strike extent of the mapped pegmatite occurrence over the coming weeks.
Lithium project developer AVZ says the completion of a $US240m cornerstone investment from CATH Technologies in the monster ‘Manono’ project will be “expedited”.
CATH will shell out the cash for a 24% direct interest, plus another ~$160m to get the ~$US540m project into development.
AVZ now expects the deal to be finalised in March.
“Finalising our agreement with CATH provides certainty of funding to progress development of the Manono Project, pending the award of our Mining Licence and Collaboration Development Agreement from the DRC Government,” AVZ’s MD Nigel Ferguson says.
“We are in close consultation with the DRC Government authorities that are undertaking the Mining Licence assessment and are confident of delivering a favourable outcome for all stakeholders.”
The stock is up from 4c to 82c since May 2019 – a gain of almost 2,000%.
The company has kicked off a 3,5000m RC drilling program at its Manindi project in WA, which will test key lithium-caesium- tantalum (LCT) pegmatites.
The program is expected to take 2-3 weeks to complete, and will target the entire 500m strike length of the recently discovered Foundation Pegmatite.
Chairman Mike Scivolo says that historical drill intersections and mapping at Manindi has identified multiple LCT pegmatites, “highlighting the large-scale potential for high-grade lithium deposits.”
Testing is also planned for nearby pegmatites, Dibbler, Quoll and Bandicoot, where lithium minerals have been identified in rockchip sampling.
This lithium player is continuing to ramp up exploration activities and drilling at its Seymour project in Canada, with phase 1 drilling at North Aubry expanded to 15 holes for 5,000m – with 70% already completed.
The company says it is on track to complete an updated mineral resource for North Aubry in Q2.
And phase 2 drilling of 31 holes for 5,100m is flagged to start shortly at the largely untested Central Aubry zone, driven by recent aerial magnetic surveying identifying the potential for stacked and shallow LCT pegmatite structures between the North and South Aubry deposits.
Not to mention historical channel samples of up to 4.14% Li2O which confirms the existence of LCT pegmatites in zone.
CEO Luke Cox said he’s excited to move the focus to Central Aubry.
“The strong potential of this zone to connect the North and South Aubry deposits via a series of stacked, high-grade lithium pegmatites make it a stand-out target for testing,” he said.
The Alaskan gold explorer holds a majority interest in NASDAQ-listed lithium explorer Snow Lake Resources Ltd (NASDAQ:LITM), who’s first results from its drone magnetic survey has identified several prospective targets in its Sherritt Gordon (SG) pegmatite dykes.
Snow Lake said that the drone system’s unique ability to fly low to the canopy and maintain centimetre precision real-time kinematic positioning navigation “results in exceptional levels of detail in the data, revealing features not before seen”.
The survey will continue over the Thompson Brothers lithium deposit area this week, with plans to drill the targets in the near-term.
EcoPro Group, a major cathode supplier for global battery manufacturers, has agreed to increase its offtake volume from ioneer’s Rhyolite Ridge project to 7,000 tpa – the maximum amount under the binding agreement in June last year.
The increased total offtake represents around 34% of ioneer’s annual lithium carbonate production from Rhyolite Ridge in the first three years of operation.
EcoPro Innovation expects to convert ioneer’s lithium carbonate into high purity lithium hydroxide at its recently complete integrated cathode plant in Korea – where it plans to significantly increase production.
The agreement remains conditional on the company taking a final investment decision on the project, which is anticipated to commence production in late 2024.