Eye on Lithium: European critical minerals could provide EV tax breaks under US inflation reduction act

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• The US and European Union begin negotiations on a targeted critical mineral agreement
• Arizona Lithium welcomes Prairie Lithium’s grant from the Critical Mineral Research Development and Demonstration (CMDD) program in Canada
• Anson plans to re-enter three historical oil and gas wells with brine sampling at Green River lithium project

All your lithium news, Monday March 13.

The United States and European Union have agreed to begin negotiations on a targeted critical minerals agreement, which will ensure the minerals extracted or processed in the EU will count for clean vehicle tax credits under the Inflation Reduction Act (IRA).

The IRA — which aims to help the US government reduce greenhouse gas emissions to half their 2005 levels by 2030 — includes $369bn worth of tax credits, grants and loans to boost renewable energy and slash emissions.

Since it was introduced in August 2022, more than US$90bn of capital has been allocated to new projects, leaving EU officials concerned it will divert investment away from Europe and hurt their economies.

US President Joe Biden and European Commission President Ursula von der Leyen met at the Whitehouse to deepen cooperation on diversifying critical mineral and battery supply chains and the need to make bold investments to build clean energy economies.

“This kind of agreement would further our shared goals of boosting our mineral production and processing and expanding access to sources of critical minerals that are sustainable, trusted, and free of labor abuses,” the two countries said in a joint statement.

“Cooperation is also necessary to reduce unwanted strategic dependencies in these supply chains, and to ensure that they are diversified and developed with trusted partners.”

Here’s how ASX lithium stocks are tracking:

Only 21 companies finished in the green, 35 fell flat, and another 81 companies tumbled into the red zone.

Who’s got news out?

ARIZONA LITHIUM (ASX:AZL)

Prairie Lithium Corporation, which AZL is in the process of acquiring, was awarded a grant from the Critical Mineral Research Development and Demonstration (CMDD) program for natural resources in Canada.

Prairie Lithium is the owner of a lithium project located in the Williston Basin of Saskatchewan, Canada and will receive C$1.074m (roughly A$1.2m), which will be matched with funding from Prairie and invested into Direct Lithium Extraction (DLE) technology development.

According to AZL, Prairie’s proprietary lithium extraction process technology may have a global application, with the process currently being tested on lithium resources from other jurisdictions, including the Big Sandy Resource.

The acquisition of Prairie represents a 1,200% increase to AZL’s global lithium resource, which now stands at 4.4MT of LCE (inferred and indicated).

“We are pleased that Prairie has been awarded this grant funding, as we continue to position the Arizona Lithium group as a leader in lithium processing and development in North America,” AZL managing director Paul Lloyd says.

AZURE MINERALS (ASX:AZS)

Azure Minerals has consummated its partnership with Sociedad Quimica y Minera de Chile, the world’s largest lithium producer, after the South American giant completed a $20 million investment in the lithium junior.

AZS, which owns the Andover lithium and nickel sulphide project in WA’s north, has attracted the interest of SQM for its first major investment in a junior miner in Australia.

It means SQM will become Azure’s largest shareholder at 19.99%, with the $20m fund injection providing plenty of ammo for Azure to fire up a drilling blitz at Andover.

ANSON RESOURCES (ASX:ASN)

Anson is moving fast to start resource drilling at the Green River lithium project in Utah’s Paradox Basin to deliver a maiden JORC resource.

A recent review of research and surveys of the project already highlighted the potential for brine flows to surface from porous Mississippian units without pumping, a feature shared with its nearby Paradox lithium project.

Under the Notice of Intent (NOI) filed with the US Bureau of Land Management, Anson plans to re-enter three historical oil and gas wells with brine sampling and pump testing on the targeted clastic zone horizons and the Mississippian units.

Drilling is expected to begin once the NOI has been accepted and the program may be extended if deemed necessary.

RIVERSGOLD (ASX:RGL)

Assays from drilling at the Tambourah Lithium Project within Western Australia’s Pilbara region have confirmed multiple, wide, and spodumene-rich mineralisation in pegmatites up to 14m.

Around 16 holes were targeted using geological mapping while Deep Ground Penetrating Radar (DGPR) was used to locate pegmatites in another five holes where no surface expression was evident.

The company plans to drill slightly further to the east, targeting major dilation zones, to provide consistent width of mineralisation in the upcoming drill program set to begin in March.

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