Our High Voltage column wraps the news driving ASX stocks with exposure to lithium, cobalt, graphite, nickel, rare earths, manganese, magnesium, and vanadium.
Concerns from India’s President earlier this week about nations and mining majors signing exclusive mineral rights deals is currently making headlines in the critical minerals sphere.
Narendra Modi says commodity supply chains are a global responsibility – calling out industry majors and nations to avoid a ‘new type of colonialism’ in today’s critical minerals arms race.
He says countries have a “custodian-type responsibility” to provide non-exclusive access to the materials necessary for our green tech transition and technological advancements.
“We are experiencing this challenge for critical materials, rare earths and others. These things are abundant in some places and not present at all in others, but all of humankind needs them,” Modi said at a Business 20 summit.
“The ones who have them, if they don’t see that as a global responsibility, then this will promote a new model of colonialism. This is my warning.”
Battery makers, equipment and car manufacturersare increasingly getting involved in the critical minerals value chain.
Long-term offtake agreements have becomethenormintheindustry’sprocurementstrategies, with governments providing incentives and companies taking extra steps in a “snatch and grab” frenzy to invest directly in the critical minerals value chain such as mining, refining and precursor materials.
Quite the opposite of his espousal on “non-exclusivity”.
Could there be a better way?
University of Indonesia’s Mari Pangestu says industrial policy targeted at onshoring or building supply chains with allies is unlikely to reshape the industrial geography of critical minerals any time soon.
“The investments required to uproot supply chains face uncertainty from increased demand, shifting industrial policy and geopolitics, and long lead times, as well as limits from relying only on supply from ‘allies’,” Pangestu says.
“Even if onshore extraction could be increased in developed countries, pushback on environmental concerns is likely to hamper progress.”
Meanwhile, industrial policy has the potential to disrupt or raise the cost of access to critical minerals and transition technologies, especially for developing countries.
Pangestu reckons a better policy response is not onshoring or creating strategic alliances. Instead, expanding and diversifying investment in resource-rich developing countries would increase and diversify supply, thereby reducing reliance on a few countries and firms.
“Keeping trade open and predictable is as vital to resource-rich countries as it is to resource-poor economies. It is also essential for the diversification of refining and processing capacity to reduce dependence single suppliers,” Pangestu says.
Back home and…
This week in Australia, Chalice Mining (ASX:CHN) ) released a long-awaited scoping study for its Julimar critical minerals project with two development scenarios at a cost estimate of either $1.6bn or $2.3bn.
The larger development scenario at a production rate of 30Mtpa, Julimar could extend to 1.9km long x 1.5km wide x 600m deep by the end of its 18-year life, producing 480,000ozpa of gold, platinum and, more prominently, palladium, 16,000tpa of nickel, 16,000tpa of copper and 1400t cobalt for free cash post-tax of $9.9bn.
A smaller 15Mtpa development scenario would generate 280,000ozpa 3PGE’s, 9000t nickel, 10,000t copper and 800t cobalt, generating $6.6bn over a 19-year mine life from 2029.
Chalice said that 55% of revenue would come from palladium sales alone, followed by nickel at 24% and copper 12%, while cobalt and gold would provide 4% and 2% of revenue respectively.
The market didn’t react kindly on its initial reaction to the news – plunging Chalice shares by 25% – however, plenty is likely to change in the development process and forecast commodity prices on the way to production.
Which ASX-listed critical minerals players in the developed world have news?
Triton Minerals (ASX:TON) surged ahead in the ASX resources pack yesterday after Mozambique’s Minister of Energy and Natural Resources granted the company a 25-year mining concession for the Cobra Plains graphite project in the Cabo Delgado province in the north of the country.
It can now get things cracking at Cobra Plains, as well as continue further funding discussions for the company’s flagship Ancuabe graphite project.
“The grant of the Cobra Plains mining concession, with its large-scale 5.7Mt contained graphite resource, means that Triton now owns two globally significant graphite resources with a diversified mix of flake sizes which can be applied towards a range of applications from batteries to expandable graphite for building materials,” Triton exec director Andrew Frazer says.
Over to another developing country, Argentina, and Lithium Energy’s (ASX:LEL) seventh drill hole has intersected lithium-rich mineralisation in the upper aquifer of the previously undrilled Payo 1 concession at Solaroz, returning assays of 386mg/l Li from 209 to 233m.
The flagship Solaroz project is located in the heart of Argentina’s ‘lithium triangle’ – well-known for its ability to produce lithium brines from evaporation ponds known as ‘salars’.
LEL’s Solaroz project – next door to $8.7bn market cap lithium stock Allkem (ASX:AKE) – is still in its early stages. However, the company is quickly proving its potential with ongoing drilling results like these.
And moving above Australia to Papua New Guinea, nickel hunter LCL Resources (ASX:LCL) (previously known as Los Cerros) has entered into a sales agreement with Papua Minerals NL to acquire two exploration licenses to bolster its tenure in the country.
The licences – EL 2391 and EL 2560 – add to its existing licenses and give it control over a “significant region prospective for nickel mineralisation.”
LCL has uncovered a 200m wide corridor of high-grade nickel sulphides – including nickel-rich boulders up to 1m in diameter at its Veri Veri project in PNG.
Multiple surface samples return over 10% nickel sulphides – that’s high-grade — and includes a trench of 3m @ 2.11% Ni and 0.23g/t Au.
Here’s a snapshot of ASX stocks with exposure to lithium, cobalt, graphite, nickel, rare earths, magnesium, manganese, and vanadium are performing lately>>>
Battery metals stocks missing from our list? Shoot a mail to [email protected].
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