Lake Resources’ (ASX:LKE) successful production of lithium chloride samples could be well timed as some European countries are planning to raise their electric vehicle (EV) subsidies to drive more EV purchases.

The samples were produced at partner Lilac Solutions’ direct lithium extraction pilot plant that is dedicated to Lake’s Kachi lithium brine project in Argentina.

Lake said the samples showed high lithium concentrations and would be analysed by external laboratories.

Processing is continuing for 20,000 litres of brine at Lilac’s newly upgraded industrial facility in California. Lake is targeting the production of one lithium chloride sample per week.

These samples will later be converted into lithium carbonate and sent to potential customers.

“Production of larger size lithium chloride samples has now been demonstrated at a much larger scale with similar results to the initial, smaller samples reported,” managing director Steve Promnitz said.

In January, the company confirmed that its disruptive lithium brine processing tech could produce high-quality 99.9 per cent battery grade lithium carbonate from Kachi brines.

Lithium carbonate with 99.9 per cent purity exceeds the industry standard specifications for battery-grade purity (+99.5 per cent).


Lithium demand is rallying

While lithium prices have been going down for some time due to supply/demand challenges, Lake noted that the demand picture was likely to improve given the accelerating momentum towards the electrification of transport.

The company pointed to the UK government’s commitment of £1bn ($1.8bn) in funding towards the building of a lithium-ion battery megafactory.

Meanwhile, Germany has allocated $US9bn ($13bn) for EV subsidies as part of its $US145bn recovery budget. This contrasts with a big fat zero for petrol and diesel-powered cars.

France has also renewed its incentives after EVs share of new car sales climbed to 9 per cent share in June, up from 2.5 per cent a year ago.