Eye on Lithium: Prices are down as China’s lockdowns take toll on EV market
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All your ASX lithium news for Monday, May 2.
Prices for lithium and cobalt are falling in China as lockdowns in Shanghai and other major cities hit demand in the world’s largest electric vehicle market, Benchmark Mineral Intelligence reports.
In early April multiple automobile producers , including Tesla and SAIC Volkswagen Automotive, suspended production of electric vehicles (EVs) due to the Covid-19 situation in China. Demand for lithium salts was significantly reduced as a result.
Fastmarkets’ says battery-grade lithium carbonate prices in East Asia’s seaborne market are trending downward for the first time since September.
Fastmarkets’ assessment of the lithium carbonate, 99.5% Li2CO3 min, battery grade, spot price cif China, Japan and Korea was at $73-78 per kg on Thursday, down by $2 per kg from $75-80 per kg Wednesday, it says.
Consumers in Japan and Korea and watching and waiting, hesitating to place orders until Chinese lithium prices are stable.
Spot lithium prices in Europe and the US held steady over the past seven days, with Fastmarkets sources saying that buyers were also “trying to resist any upward movement and instead take a wait-and-see approach while consuming leftover inventory”.
On the spodumene side, the emergence of bids of $US5,650 per dry metric tonnes (dmt) at Pilbara Mineral’s (ASX:PLL) latest auction have left multiple market participants saying there might not be much room for price decreases for lithium sales in China.
Fastmarkets’ assessment of spodumene min 6% Li2O, spot price, cif China was at $5,750-6,300 per tonne on Thursday – up by $250-300 from $5,500-6,000 per tonne two weeks earlier.
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Oof. Only 15 stocks were in the green today, with 19 flatlining and a massive 83 in the red.
PNN has expanded its Salta Lithium Brine Project in Argentina with the award of the Tabapocitos 01 licence after a competitive ballot process.
Notably, Tabapocitos 01 is adjacent to site of proposed multi-user industrial park and critical infrastructure – a potential site for the future lithium carbonate plant for the Salta Project.
With this new license, the company now has three licences in the Pocitos area – Pocitos 11, Tabapocitos 01 and Tabapocitos 02.
PNN now plans to include brine samples from the Pocitos licences, in conjunction with brines from the Rincon and Incahuasi salares, and other licences within the Salta Project area in upcoming Direct Lithium Extraction (DLE) evaluation studies, with a view to significantly expanding the project’s brine sources for potential commercial evaluation.
Midas’ recent field visit has confirmed the occurrence of lithium-rich LCT pegmatites on the Newington Project in WA, with samples of the highly weathered pegmatite and pegmatoids returning up 1.3% lithium.
The field visit was part of the company’s due diligence on the project as part of its option agreement with DiscovEx Resources Limited (ASX:DCX) to purchase the project.
“The next step is to obtain an understanding of how widespread the LCT pegmatites are,” exploration mamager Mark Calderwood said.
“This will be achieved by more comprehensive mapping and geochemical sampling. Work is expected to commence this week.”
Drilling at the company’s Marble Bar project in WA have delivered the highest-grade assays to date, including 3m at 2.5% lithium.
The results also demonstrated there’s potential for lithium in the east towards the Brockman Zone where a number of drillholes intercepted wide zones of lithium mineralisation – 12m at 0.53% and 20m at 0.47 – in an area previously unexplored.
“The lithium market remains very strong and we expect this momentum to continue throughout 2022 and beyond,” Head of Geology Stuart Peterson said.
“Our immediate focus will be the ongoing CY2022 program at MBLP, including the highly prospective targets that remain untested, as well as our exploration campaign due to commence at the Manna Lithium Project in the Goldfields region in CY2022Q2.”
Liontown and LG have executed a binding offtake agreement for the supply of spodumene concentrate from the Kathleen Valley Lithium Project in WA.
The agreement provides for the supply of up to 150,000 dry metric tonnes (DMT) per annum of spodumene concentrate expected to commence in 2024, representing approximately one-third of the project’s start-up SC6.0 production capacity of ~500ktpa.
LGES is a major EV battery supplier for leading global automakers and this agreement is another key milestone for Liontown after it signed an offtake agreement with Tesla for up to 150,000 DMT per annum.
Subject to long form documentation with Tesla being entered into, this means that more than half of Liontown’s planned production is now covered by long-term agreements with high-quality customers.
The company says negotiations with other potential Tier-1 global customers are continuing.
The company has completed over 70% of construction work at its Rincon 2,000tpa project in Argentina, with the first production of battery quality lithium carbonate product targeted during next quarter.
Process plant development works are progressing on schedule and budget.
“The lithium market remains very positive and lithium carbonate prices may allow very lucrative product sales revenues,” MD Jerko Zuvela said.
“This is providing strong and additional interest from major groups in our project and especially our product, noting our Rincon Lithium Project will become the next commercial scale operation.
“Argosy’s transformation into a cashflow generator is nearing, whilst also progressing toward the next stage 12,000tpa scale operations.”
The near term miner has awarded the crushing contract to CSI Mining Services for its Finniss Lithium Project in the NT.
MD Stephen Biggins said it is “another significant step” in the development of the project.
The crusher civil works are nearing completion with CSI expected to start mobilising to the project during June 2022.
Arcadia has received the final assays from drilling at its Bitterwasser lithium clay project in Namibia and says the results suggest potential for a significant increase of the existing JORC Mineral Resource – currently 15.1 million tons at 828 ppm lithium, which covered only 24% of the Eden Pan surface area.
“The work to declare a revised Mineral Resource is being run concurrently with bench-scale test work (expected to be finalised by Q3/2022) for lithium extraction using both organic and sulphuric acids with the aim of investigating the possibilities of production of a battery grade lithium product,” CEO Philip le Roux says.
The company has also exercised its option to acquire up to 100% of the Bitterwasser Pan District, where it plans to conduct exploration drilling over the remaining exposed pans.