Eye on Lithium: Mining the ‘limiting factor’ for electric vehicle production
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All your ASX lithium news for Tuesday, March 29.
Benchmark Mineral Intelligence boss Simon Moores says that the limiting factor in the production of electric vehicles (EVs) is the mining of the raw materials needed to make them.
He flagged that in 2015 raw materials comprised about 40% of the cost of a lithium ion battery. Today, that figure is a whopping 80%.
As raw material prices increase it trickles down to supply chain to batteries and the cost of EVs for end users.
When raw materials prices go up, lithium ion battery prices go up, and EV prices go up.
In 2015, raw materials were 40% the cost of a lithium ion battery. Today they are 80%.
— Simon Moores (@sdmoores) March 27, 2022
And supply is looking tight out to 2030, so it makes sense that EV makers are dealing to lock in offtake and prices.
This month Tesla signed a binding four-year offtake deal for 110,00t of spodumene concentrate from Core Lithium’s (ASX:CXO) Finnish mine in the NT which is due to open in late 2022. Last month the carmaker signed a five-year deal with Liontown (ASX:LTR) from its Kathleen Valley project in WA.
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A total of 45 stocks were in the green today, with 32 flatlining and 27 in the red.
Lake has teed up a non-binding MoU with Japan-based trading company Hanwa Co to negotiate for up to 25,000tpa offtake of lithium carbonate over 10 years from its Kachi project in Argentina.
Hanwa is also willing to co-ordinate a strategic partnership between companies downstream of the battery supply chain to jointly develop a unique and effective supply chain “for mutual growth and sustainability.”
Plus, the MoU also allows for Hanwa to consider providing financial support mechanisms such as “a meaningful equity investment, a potential prepayment on offtake, and trade finance facilities” to secure a long-term agreement and build up a sustainable partnership with Lake.
The company says the finalisation of a binding long-term agreement with Hanwa will bolster its financial position as it moves towards a Final Investment Decision later in the year.
Ioneer’s USA subsidiary completed an MoU today with NexTech Batteries who will acquire lithium carbonate and/or lithium hydroxide supply from Ioneer’s Rhyolite Ridge lithium-boron project.
NexTech will use it to manufacture its next generation solid-state lithium-sulphure batteries and CEO Bill Burger said the company is pleased to work with a supplier like Ioneer that is ”aligned with our mission of making batteries more affordable, more sustainable and safer through patented lithium-sulphur science that’s poised to disrupt multiple industries.”
“The fact that the Rhyolite Ridge Project is located a short distance from our facility will also allow us to lower our supply chain carbon footprint, reduce dependence on foreign suppliers, and create jobs right here in Nevada.”
The two parties intend to discuss the potential for long-term supply once production has commenced.
The explorer has detected visible spodumene crystals in the initial drill core at its flagship Cancet project in Quebec, Canada.
Results are expected within 6 to 8 weeks and Winsome expects they will reveal the extent of lithium mineralisation within the pegmatites.
“While we don’t have a quantitative estimate yet how strongly mineralised the pegmatites are with lithium, the signs are very encouraging,” MD Chris Evans said.
The drilling campaign is on track to be completed by mid-April 2022.
The company’s battery recycling JV, Primobius, has officially opened its 10tpd commercial lithium-ion battery (LIB) recycling plant in Germany with plans to kick off operations in Q2 2022 – pending the receipt of an operating permit.
Cornerstone feedstock has been secured from specialist German battery waste company and the remaining feedstock capacity is expected to be secured from participants in the German electric vehicle industry.
“Importantly, the Primobius 10tpd commercial disposal service will allow Primobius to showcase operational capabilities with customers,” the company says.
“Extraordinary market tailwinds support sustainable hydrometallurgical recycling to close the battery supply chain loop.
“Primobius is now well positioned in a commercial setting with an industrial scale solution ahead of potentially huge volumes of end-of-life LIBs requiring recycling from mid-decade.”
NMT says that successful completion of demonstration refinery trials has enabled engineering cost and feasibility studies for a larger 50tpd operation to be finalised ahead of investment decisions in Q3 2022.
A Deep Ground Penetrating Radar (DGPR) at the company’s Mt Peake project in the NT has revealed multiple pegmatite-like structures – which MD Dr Qingtao Zeng says is consistent with the company’s de facto mapping from the surface.
“Most importantly, this technique helps us to see through the shallow sediment cover to identify potentially buried pegmatite systems to the northwest where close to spodumene mineralisation identified at surface by Core Lithium (ASX:CXO),” he said.
“The survey results have provided valuable information regarding the potential continuity of the buried lithium mineralisation, which may be linking to our Sample JC001 location.
“The company is excited to see the soil sampling program and rock chips assay results in this area, which will be incorporated into our final targeted drilling plans.”
The company has completed the acquisition of the Rincon lithium project in Argentina for a tidy $825 million, following approval from Australia’s Foreign Investment Review Board (FIRB).
It’s a large undeveloped brine project located in the heart of the lithium triangle in the Salta Province of Argentina, an emerging hub for greenfield projects.
The company says it’s a long life, scaleable resource capable of producing battery grade lithium carbonate and has the potential to have one of the lowest carbon footprints in the industry.
“Rincon strengthens our battery materials business and positions Rio Tinto to meet the double-digit growth in demand for lithium over the next decade, at a time when supply is constrained,” chief executive Jakob Stausholm said.
“We will be working with local communities, the Province of Salta and the Government of Argentina as we develop this project to the highest ESG standards.”
This comes just months after Rio was booted from Serbia amid protests against alleged environmental impacts of its US$2.4 billion Jadar lithium mine.
Let’s hope the company has more luck in Argentina convincing the locals about the ESG benefits of the Direct Lithium Extraction (DLE) technology proposed for the project.