Eye on Lithium: Mexico eyes lithium association with Argentina, Bolivia and Chile
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All your ASX lithium news for Friday, May 6
Mexico’s President Andres Manuel Lopez Obrador is aiming to create a lithium association with Argentina, Bolivia and Chile.
It comes after Mexico’s congress passed a bill to nationalise the metal last month.
The idea for the four countries to share expertise around development, exploration, processing and new technologies.
Bolivia, Chile and Argentina are in the “lithium triangle,” which contains nearly 56% of the world’s resources of lithium, and while Mexico has no commercial production, it boasts potential deposits that if proven economically viable, could catapult it to major producer status.
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Only 6 stocks were in the green today, with 15 flatlining and a whopping 97 in the red. Ouch.
The lithium producer just released its March quarterly and made a tidy $253 million, up $158 million from the prior year.
The company said the primary driver was pricing and sales of lower-cost inventories including a onetime sale of spodumene stockpiled during the initial start-up of the Wodgina mine by JV partner Mineral Resources (ASX:MIN).
“Lithium’s full year 2022 EBITDA is expected to be up 200% to 225% year over year, up from our previous outlook for growth of around 75%,” CCFO Scott Tozier said.
“We now expect our average realized selling price to be about double last year.
“This is the result of our efforts to move toward index referenced variable price contracts and a significant increase in index prices.
“These negotiations are ongoing and progressing well. If we are successful, this could provide additional upside to our current outlook for the Lithium business.”
Growing global conversion capacity
The company expects with year-over-year lithium volume growth in the range of 20% to 30% expected it brings on new conversion assets, particularly La Negra 3 and 4 and Kemerton 1, plus the potential acquisition of the Qinzhou plant (which is expected to close in the second half of the year) and would more than double Ablemarle’s lithium production.
“Our wave three projects should provide Albemarle with approximately 200,000 tonnes of additional lithium conversion capacity, which is higher than the 150,000 tonnes that we originally planned,” chairman, president and CEO Jerry Masters said.
“Additionally, we continue to progress our growth options for wave four, which is expected to bring an additional 75,000 to 125,000 tonnes of capacity.
“This includes continued evaluation of options to restart our Kings Mountain lithium mine and build conversion assets in North America and Europe.”
Not to mention, with its ownership stakes in Wodgina and Greenbushes, the company already has access to low-cost spodumene to feed these conversion facilities.
The company has appointed some experienced Pilbara players to its board, with Richard O’Shannassy appointed as non-executive chairman and MinRex exploration manager, Ian Shackleton, appointed as non-executive director.
Shackleton in particular was the geologist who found Global Lithium Resources’ (ASX:GL1) Archer Deposit – which hosts 10.1Mt at 1.0% Li – and has extensive experience in battery metals exploration in the Pilbara.
“Our Board now includes founding geologists of two major lithium deposits in the Pilbara (Global Lithium’s Archer Deposit and Pilbara Minerals’ Pilgangoora Deposit), corporate and legal experience in mining and resources activities (including offtake agreements, takeovers, farm-ins/outs etc) and experience managing all aspects of a mining asset life- cycle (from exploration through to resource definition and production), which we believe will help drive MinRex through its planned activities,” MinRex MD George Karageorge said.