• Vulcan says EU unlikely to declare lithium a hazardous material
  • Liontown approves Kathleen Valley mine and signs offtake agreement with Ford
  • Pilbara Minerals approves 100,000tpa expansion to its Pilgangoora operations

 All your ASX lithium news for Wednesday, June 29.

 

Earlier this month Albemarle said it 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.

Vulcan Energy (ASX:VUL) COO Vincent Ledoux Pedailles has told S&P Global the whole idea is counterproductive.

“[It seems] pretty unlikely that given the EU objectives of becoming self-sufficient in EV lithium-ion battery production by 2025, targeting 80% domestic lithium production in the next five years, targeting 35% lithium recycling by 2029, they will then approve such proposal that can be seen as counterproductive,” he said.

However, Pedailles also said the European Commission could potentially grant a special status to certain countries, allowing then to waiver on the 1A classification for specific industries/activities – and that Germany could potentially ask for a waiver for lithium used in batteries.

“Cobalt is already sitting in this category (along with 850 other products) and is being consumed in batteries in Europe on a daily basis, however, it is true that it could have an impact lead by additional costs in controlling, processing, packaging and storage,” he said.

 

First draft act expected in Q4

The first draft of an act reclassifying lithium compounds is expected to be published between October and December.

“The risk is that if lithium salts are incorrectly reclassified as 1a/SVHC it would introduce great uncertainty to long-term business viability planning of investments around these three salts,” International Lithium Association Secretary General Roland Chavasse said.

“Should any of these three lithium salts be classified incorrectly as 1a and be placed on the SVHC there could be significant unintended consequences for investments in their use in the EU, thereby putting in question the long-term viability of lithium being produced, refined, used and recycled in EU member states.”

He also said the reclassification would add a lot of long-term financial uncertainty to the massive investments which are needed to achieve a domestic battery supply chain.

“It is hard to know how this will play out as there are many variables, but I think it is unlikely to make [battery makers] supply chains more local or reduce their costs,” Chavasse said.

 

Here’s how ASX lithium stocks were tracking today:

Lithium stocks missing from our list? Shoot a friendly mail to [email protected]

 

Only 22 stocks were in the green today, 40 flatlined and 68 were in the red.

 

Who’s got news out today?

LIONTOWN RESOURCES (ASX:LTR) 

The company’s board has approved the 500,000tpa Kathleen Valley mine in WA (first production Q2 2024) and announced a binding offtake agreement with Ford today.

Not only will Ford join Tesla and LG among Liontown’s spodumene customers, taking up to 150,000tpa by the final three years of a five-year deal, but a subsidiary will also stump up $300 million in a funding facility which will help bankroll the project alongside a $463 million capital raise completed last year.

“The signing of our third and final foundational offtake agreement is a momentous milestone for Liontown and the Kathleen Valley project, with approximately 90% of Kathleen Valley’s start-up capacity now under secured long-term binding offtake agreements,” said Liontown’s managing director and CEO Tony Ottaviano.

“Our disciplined approach to our offtake strategy has enabled us to build a customer base of Tier-1, globally significant customers in
the EV battery supply chain, validating Kathleen Valley’s status as a globally relevant lithium asset.”

Ford VP of EV industrialisation Lisa Drake said the US car giant plans to deliver more than 2 million EVs on its own by 2026. The EV market globally sold around 6.6 million units in 2021.

“This is one of several agreements we’re working on to help us secure raw materials to support our plan to deliver EVs for customers around the world and meet our environmental, social and governance commitments,” she said.

Liontown’s total offtake commitments now stand at up to 450,000 DMT per annum of spodumene concentrate, representing approximately 90% of Kathleen Valley’s start-up SC6.0 production capacity of ~500ktpa.

The remaining production from Kathleen Valley is intended to be retained for spot volume sales and/or discrete offtake agreements.

 

PILBARA MINERALS (ASX:PLS) 

The company says it’s experienced a massive 54% increase in lithium production from 81,431dmt to 123-127,000dmt in the June quarter – and expects to add some $565 million to its swelling bank account by tomorrow’s month end, taking its overall cash position from $284.9m last quarter to $850-855m.

Shipments are expected to rise 118% to 127-132,000dmt, putting PLS on track to hit a production rate of 373-377,000t for the financial year with sales of 355-360,000t, 26% higher than the 281,440dmt shipped in FY21.

Pilbara Minerals already expects to increase its nameplate capacity to 540,000-580,000dmt per year with the addition of the Ngungaju plant, formerly part of the old Altura Mining Pilgangoora operations.

But it has approved a $297.5m expansion to its Pilgan plant to take its production rate to 640,000-680,000tpa by the end of 2023, with $50m of pre-investment capital also to go towards preparing for future expansions up to 1Mtpa.

“Following the board’s Final Investment Decision, we are now able to commence construction of the P680 project in the coming months and expect commissioning of the primary rejection facility during the second half of next year with the crushing and ore sorting facility to follow shortly thereafter,” PLS CEO Dale Henderson said.

“This increase in production capacity will enable the company to continue to capitalise on the opportunities in the lithium chemicals market, being driven by rapid transition to decarbonisation through technologies such as electric vehicles and battery storage.”

An FID for the expansion to 1Mtpa is due in December.

 

MONGER GOLD (ASX:MMG)

The company has expanded the Scotty Lithium Project in Nevada, USA, by 37% to 7,802 ha, staking an additional 264 claims to the south to cover the potential southern extension of the adjoining Bonnie Claire Lithium Deposit – which is one of North America’s largest undeveloped lithium resources.

“With a surface geochemical sampling campaign already underway at the Scotty Lithium Project, followed by a geophysics survey and a drill program, we are giving ourselves every chance to make a significant lithium discovery at Scotty in the near future,” chairman Peretz Schapiro said.

A maiden drilling program is scheduled in H2 2022 to test surface anomalies, extensions of the Bonnie Claire Deposit, and geophysical targets within the Scotty Lithium Project.

 

WILDCAT RESOURCES (ASX:WC8)

WC8 has defined 4 areas of interest at its Bolt Cutter East lithium project in WA, with rock chip data showing increasing fractionation towards lithium-caesium- tantalum (LCT) pegmatite composition.

“The infill data shows fractionation trends that point towards LCT compositions in at least four areas, with the most enriched area coinciding with an area where large beryl crystals have been collected,” CEO Samuel Ekins said.

“The work to date is very encouraging and we look forward to the next stage of work to test for evolved pegmatites and lithium mineralisation.”

 

METALS AUSTRALIA (ASX:MLS)

The company has kicked off diamond drilling at its Manindi Project in WA, testing three key battery minerals resource discovery targets.

Namely, extensions of the Foundation Pegmatite at depth below previous, high-grade lithium- rubidium intersections including 11m at 1.23% Li2O, 0.31% Rb from 16m.

The company is also testing depth and strike extensions of high-grade zinc mineralisation at the Kultar prospect and the mafic / ultramafic intrusive target at Manindi West below the intersection of vanadium bearing titaniferous magnetite with zones of nickel-copper-cobalt sulphide mineralisation.

 

LTR, PLS, MMG, WC8 and MLS share prices today: