Eye on Lithium: Expert opinions are leaning toward a lithium price bounce

• Opinions are pointing towards lithium prices rebounding
• Alternating lithium surpluses and deficits expected
• Aruma testwork produces lithium concentrates

All your lithium news, Wednesday May 3.

Lithium prices may be down more than 50% from the dizzying heights it reached late last year, but there are still considerably higher than they ever were in the height of the COVID-19 pandemic.

The question is course whether prices will continue falling or whether they will bounce back. Opinions are leaning towards the latter.

Motley Fool quoted CRU head of battery rare materials Martin Jackson as saying that while lithium demand softness early in the year, CRU expected a relatively tight market due to much stronger demand from electric vehicles later in the year.

ANZ commodity strategists Daniel Hynes and Soni Kumari are also optimistic about the lithium price amid supply risks from resource nationalism, noting that Chile’s policy requiring state involvement for all new lithium projects and the use of “unproven” environmentally friendly processing could delay the delivery of its pipeline of projects.

“The outlook for the EV sector remains strong. We expect these latest supply side issues to reignite supply concerns, leading to a rebound in prices,” they added.

Reuters noted that global EV sales jumped 55% last year to 10 million vehicles and are expected to climb another 35% this year.

However, Benchmark Mineral Intelligence’s Caspar Rawles warned that while a global market deficit is expected for 2023 as a whole, surpluses are likely from next year, rising to 145,693 tonnes by 2027, before sinking into a deficit again from 2029.

“There will be a few years when there should be enough supply, and that’s a function of some of the investments that have happened in the last few years,” he added.

Albermarle certainly isn’t concerned, approving a US$1bn expansion of the Kemerton plant in Western Australia.

Here’s how ASX lithium stocks are tracking:

Lithium companies were mostly down with 50 companies in the red while just 33 made gains. Another 66 companies were unchanged.

WHO’S GOT NEWS OUT?

Here’s a selection of news out from lithium plays today.

Aruma Resources (ASX:AAJ)

Aruma’s sighter metallurgy test work on samples from its Mt Deans lithium project in Norseman, Western Australia, has produced lithium concentrates with recoveries of 80% into 25% of the mass.

This is three times higher than the original feed grade and are expected to be improved on.

The company has also separated tantalum and tin by flotation, which it then expects to upgrade by simple gravity methods.

New test work on fresh outcropping pegmatite samples now underway which is expected enhance initial promising results.

Future Battery Minerals (ASX:FBM)

Step-out drilling at Future Battery Minerals’ Kangaroo Hills project has returned thick, shallow and high-grade lithium intercepts to the north, east and south of the discovery hole.

The outcropping pegmatite intersected by results such as 27m grading 1.32% Li2O from a down-hole depth of 64m including 4m at 2.5% Li2O from 80m (KHRC017) has been interpreted to be at least 300m long, 200m wide and up to 30m in thickness.

Assays are pending for a further 23 holes drilled during the Phase 2 drilling while the company has started a diamond hole to test high grade mineralisation between the discovery hole KHRC011 and KHRC015.

Global Lithium Resources (ASX:GL1)

The company plans to carry out extensive drill programs at its Manna and Marble Bar lithium projects in Western Australia, which have combined resources of 50.7Mt grading 1% Li2O.

Global plans to carry out a +50,000m RC and diamond drilling program at Manna to test the large, high-grade lithium bearing pegmatite extensions.

At Marble Bar, the company will carry out a 20,000m RC program to test Corridor 2 lithium targets as well as gold and base metal geochemical anomalies located at the Twin Veins targets and any identified chargeability anomalies.

It also plans to carry out an IP survey across the Twin Veins target to highlight potential chargeability anomalies.

Voltaic Strategic Resources (ASX:VSR)

The company has started maiden drilling at the Andrada prospect at its Ti Tree lithium project in the Gascoyne region of WA.

Voltaic’s 1,250m reverse circulation drill program will accelerate its understanding of the project’s geology and vector towards prime lithium, caesium, tantalum (LCT) targets in subsequent campaigns – in what is emerging as a new critical minerals hotspot.

Data from the program will also be used to understand the continuity, geochemistry, and structural orientation of the LCT pegmatites within the project and potentially unlock several more prospective targets across the 212km2 tenement package.

All severn targets are located within the ‘Volta Corridor’ – a major belt of lithium-bearing pegmatites that contains Delta Lithium’s (ASX:DLI) (previously Red Dirt Metals) Yinnietharra Lithium Project, where a 90,000m drill program is underway.

At Stockhead we tell it like it is. While Future Battery Minerals and Voltaic Strategic Resources are Stockhead advertisers, it did not sponsor this article.