Eye on Lithium: Prices of lithium rise 5.5%; McKinsey says downstream processing cheaper in Australia
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All your lithium news, Friday, June 9.
Lithium prices in China ticked up again for the week ending June 9, with purchasing activity by cathode manufacturers increasing in efforts to meet moderately growing orders from cell makers.
While last week’s surge in prices has slightly faded, pricing across the board was still in the green, with lithium carbonate prices up another 5.5%, while lithium hydroxide was also up 4.4%.
Benchmark Intelligence contacts reported that some lithium producers are holding on to their inventories in anticipation of a further climb in prices.
And contrary to POSCO’s claim of the high cost of lithium refinement in Australia, as reported by Stockhead here just over a fortnight ago, McKinsey analysts found that Aussie lithium hydroxide plants could be the world’s lowest-cost producers over their life cycle, despite lamentations regarding construction and labour costs.
McKinsey says that if the plants were built near-to-mine with decent access to port (entirely possible), it would counteract those perceived additional costs.
While 66% of lithium exports are gauged to still be spodumene concentrate by 2030 on current refinement levels, building out local lithium hydroxide processing could reap further annual revenues from the sector worth up to an extra $9.6 billion per annum.
If Australia does decide to go further downstream with its refinement capabilities, an extra 4,000 jobs would be created as well, McKinsey wrote.
“Our modelling suggests that Australia could produce lithium hydroxide at approximately $6,600 per tonne of LCE, assuming integration with lithium mining, compared with $10,400 per tonne of LCE for China,” said the report.
Some 42 lithium stocks were in the green today, while 56 stayed even. Meanwhile 48 dropped down, albeit not by much, across the board.
Since announcing the purchase of the Jaguar lithium project in Brazil at the end of last month, SLM has raised $8.1m to get on with drilling after it produced rock-chip samples grading up to a whopping 4.95% Li2O along a 1km long and 50m wide spodumene-rich pegmatite body.
Shareholder Latin Resources (ASX:LRS) – also a Brazilian lithium player – increased its investment into SLM to 17.79%, pouring in $3m as part of the placement.
“The Jaguar pegmatite hosts confirm LCT-bearing pegmatites with some of the coarsest and most abundant spodumene occurrences I have seen,” former Delta Lithium (ASX:DLI) boss and current SLM exec director Matt Boyes says.
“These tenements, in what may be a new lithium province, are a fantastic addition to our already large tenement position in the northeast of Brazil, and with drilling to commence immediately.”
SLM expects to commence drilling on Jaguar this month, with Latin intending to support the explorer by making available its nous in exploration guidance and country experience.
Shares in SLM have risen more than 500% since late May.
FIN has identified clay-hosted lithium targets at its Gaspe project, part of the recently acquitted Mount Tremblant package in Quebec, Canada.
Gaspe covers a promontory (high land that juts out into a sea or large lake) drained by several streams, where government sampling returned extremely elevated stream sediment lithium up to 342ppm (0.0342%) Li2O.
Fieldwork across the Ross, Cancet West projects in James Bay is underway, with early stage targets already uncovered.
“This early stage work completed at the Gaspe lithium project is very exciting for FIN and highlights the significant value for shareholders within our recently acquired Mount Tremblant project package,” FIN resources director Jason Bontempo said.
“We now look forward to getting on the ground in Quebec and progressing the targets across Ross, Cancet West and Gaspe.”
MQR is accelerating its farm-in agreement with WA mining behemoth Mineral Resources (ASX:MIN) at its West Spargoville project (WSP) that will see Chris Ellison’s MIN acquire a 25% stake in the lithium rights.
MIN will dump $4.8m into exploration activities at the project within the next 12 months as part of the JV, where MQR has completed a maiden drilling program, which consisted of 122 RC drill holes for 18,687m and 391 AC drill holes for 19.156m.
Assays from the 122 RC holes returned with a peak of 1m @1.1% Li2O, as well as more than 300 parts per million (ppm) from across the 291 AC holes.
MQR chair Charles Thomas said the accelerated farm-in agreement reflects the significant progress made to-date with MIN at WSP.
“We signed our partnership agreement with MinRes less than one year ago and have formed a very close working relationship with the team there during this period,” Thomas said.
“By accelerating the farm-in agreement and officially forming this JV with MinRes, we hope to further capitalise on the extensive knowledge and technical capabilities that they have.
“We are confident that this is only the beginning of a promising discovery and development journey between the two companies.”
MQR and MIN are currently reviewing all the data of last year’s exploration campaign and expect to announce 2023 exploration program details “in the near term”.
CHR has finished off an intensive 14-hole RC first-pass drilling campaign at its Megabucks and Old Bucks prospects at the Bynoe Lithium project in the NT.
The company completed 14 drill-holes for 2,045m across the two prospective target areas in its maiden drilling program, with assays expected to be returned within the next two weeks.
The explorer struck pegmatites up to 36m thick down-hole with varying degrees of weathering.
With a first 114m hole completed, drilling is now focused at the Enterprise prospect for a further 2,000m, as well as deeper holes at the Megabucks and Old Bucks prospects.
CHR will also test new emerging drill targets in the area from recon mapping where pegmatites have been observed.
Samples from all completed drill-holes have been submitted to the laboratory, with first assays expected within the next two weeks.
CHR’s Bynoe Lithium project is close to the Core Lithium (ASX:CXO) Finess lithium project which has a mineral resource of 30.6Mt at 1.31% Li2O.
At Stockhead, we tell it like it is. While Latin Resources, Charger Metals and Fin Resources are Stockhead advertisers, they did not sponsor this article.