Eye on Lithium: Lithium partnerships aplenty as car manufacturers race towards EV transition
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All your lithium news, Monday September 25.
Against the backdrop of sky-high lithium prices, which saw EXW China (battery) amounts top US$71,575 recently – lithium partnerships are beginning to pop-up all over the shop as carmakers and battery manufacturers catch on to the idea that there is simply not enough of the stuff to go around.
As Stockhead deputy editor Reuben Adams reported, we need more than 300 new mines to feed a 500% increase in battery demand by 2035 – for lithium specifically, this means roughly 74 new lithium mines with an average size of 45,000 tonnes.
Securing access to critical minerals for batteries has therefore become ever more important amid the global automakers expedited transition to EVs.
One recent example of this is South Korea’s electronics giant LG Energy Solution (LGES) who signed partnership agreements with three major Canadian miners to lock in lithium and cobalt supply last Friday.
In a bid to establish a battery supply chain within North America, LGES revealed collaborations with NASDAQ listed Electra Battery Materials Corporation and Snow Lake Resources as well as with TSX player Avalon Advanced Materials Inc at ceremony held in Toronto, Canada.
— George Pirie (@GeorgePirieMPP) September 23, 2022
Two non-binding MoUs were signed with Snow Lake Resources and Avalon for a stable supply of lithium while a binding term sheet was locked in with Electra for 7,000t of cobalt sulphate for three years starting in 2023.
Avalon will supply LGES with lithium hydroxide(11,000 tons per year) for five years initially, starting in 2025 whereas Snow Lake will supply lithium hydroxide (20,000 tons per year) for ten years once production starts in 2025.
As a leading global manufacturer of lithium-ion batteries, LGES has been at the forefront in securing key raw materials for EV battery production, inking multiple agreements and MoUs with various suppliers.
In North America this year, LGES signed a non-binding MoU with Compass Minerals on lithium carbonate and lithium hydroxide. The company also signed a binding term sheet with Canada’s Sigma Lithium for the supply of battery-grade lithium.
The multinational conglomerate also struck two off take agreements with ASX players such as Liontown Resources (ASX:LTR) for spodumene concentrate and Vulcan Energy Resources (ASX:VUL) for battery-grade lithium chemicals earlier this year, while also signing a non-binding MoU with SQM of Chile to investigate and develop joint investment projects of electro-mobility industry value chain.
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Only 7 ASX lithium companies finished in the green today, 37 fell flat and 86 found themselves in the red zone.
NYSE listed Chinese EV maker Nio will subscribe for $12m of shares in the lithium minnow, ahead of a potential JV and offtake deal.
Nio, a pioneer and a leading company in the premium smart electric vehicle market, will hold about 12.16% of GW1 at completion of the placement, done at 55c per share – a big premium to the last closing price.
EV makers and battery manufacturers are starting to look over the joint for lithium supply, not just at the near term producers but with explorers who don’t even have a resource yet.
This is the case with GW1 at its flagship San Jorge Project in Argentina but other examples include Eastern Resources (ASX:EFE) who signed a binding strategic partnership with China’s Yongxing Special Materials technology Co in May and EV Resources’ (ASX:EVR) MoU with Yahua in December 2021.
Yahua is a wholly owned subsidiary of Sichuan Yahua Industrial Group Co, one of China’s major lithium hydroxide and lithium carbonate producers, currently in expansion for a further 50,000tpa of lithium hydroxide and 1,000tpa of lithium metal by 2025.
Drill testing of lithium targets is underway at the Skeleton Rocks Project in Western Australia’s Goldfields region, albeit delayed due to wet weather.
The project, however, is now in full swing and will consist of ten reverse circulation holes to planned depths of 150m each – angled directly under the geochemical anomalies encountered in Sipa’s aircore program, undertaken in March.
Targets being tested lie within unexplored greenstone units on the eastern margin of a large granite batholith and should it be required, Sipa has all approvals in place to expand the program.
Skeleton Rocks is strategically located between the Great Eastern Highway and the Mt Holland Lithium Project, currently being developed as part of a joint venture between Wesfarmers (ASX:WES) and Chilean mining major Sociedad Quimica y Minera de Chile S.A. (SQM).
“The focused geochemical halos we have identified at Skeleton Rocks are the logical place to commence drilling on a project that is well located in a proven WA lithium province,” Sipa managing director Pip Darvall says.
“It is great to once again be out testing targets at another one of Sipa’s projects.”
Vulcan has appointed Cris Moreno as deputy chief executive officer, effective from November 1.
Moreno will be based in Europe, working alongside Vulcan’s leadership team in Germany and Australia as the company advances the combined renewable energy and Zero Carbon Lithium Project towards commercial production.
“As Vulcan’s Zero Carbon Lithium Project grows and advances, our skills and expertise requirements in our leadership team are evolving,” Managing director and CEO Francis Wedin says.
“Cris has a unique CV, having executed large LNG project developments, before turning his attention to lithium hydroxide and battery cathode plants in Europe.
“The shared project discipline DNA within both these sectors and experience in delivering major projects in Europe similar to our integrated, geothermal renewable energy and lithium hydroxide project, is significant.
“As well as having excellent technical skills and proven leadership qualities, Cris’ motivation to work with Vulcan stems from a strong desire to leverage his experience to tackle climate change and drive meaningful decarbonisation, whilst generating stakeholder value, creating important alignment with our mission and goals at Vulcan.”