LEL’s two-pronged battery metals strategy covers both lithium and graphite

Miners are keen to capitalise on the growing demand for electric vehicles but Lithium Energy is a rarity amongst them for its exposure to both lithium and graphite.

Global EV sales are forecast to rise to 14 million units by 2025, a big leap from just 3 million units in 2020 with Europe taking an early lead with a third of all cars sold drawing power from lithium-ion batteries.

China aims to have new car sales be either electric or hybrid vehicles by 2035 while the US is betting on a massive investment in charging infrastructure to drive adoption.

Even Australia, which has lagged behind the rest of the world for too long is starting to take action following Labor’s victory at the elections.

This is convincing enough for Korean car maker Kia to increase Australia’s allocation of its popular electric vehicles.

Why not both?

All of this is music to the ears of battery metal plays given that the typical 60 kilowatt hour EV battery contains 50kg of lithium carbonate equivalent and 50kg of graphite.

While many companies are focused on one or the other, Lithium Energy (ASX:LEL) stands out for its having both a lithium and a graphite project.

The company, which was spun-out from Strike Resources (ASX:SRK), holds the intriguing Solaroz lithium brine project in Argentina’s “lithium triangle” and the Burke graphite project in South Australia.

Solaroz is located within “the best address in Argentina” according to executive chairman William Johnson and it is not hard to see why given that it is directly adjacent to both Allkem’s ( previously Orocobre) world class Olaroz and North American-listed Lithium Americas’ advanced Cauchari-Olaroz development

Approval was recently received from the Provincial Authority to start exploration on eight concessions covering 12,000 hectares,

This will focus on validating the project’s conceptual exploration target of 1.5-8.7 million tonnes of contained lithium carbonate equivalent at between 500 – 700 mg/L of lithium and delineating a maiden JORC mineral resource.

Lithium Energy will kick off work with a passive seismic survey to determine the maximum depth of the basement rocks before carrying out electromagnetic surveys to map out the conductive layers of lithium-rich brine.

This will be followed by drilling that will pave the way for resource definition.

Solaroz also benefits from being a brine development, which promises lower costs compared to hard rock, or spodumene, plays and a much lower impact on the environment thanks to its use of evaporation ponds that leverage energy from the sun.

Johnson noted that while it was still early days at the project, all the signs pointed to it being a large, world-scale lithium operation.

South Australian graphite

The other arm of Lithium Energy’s battery metal efforts is found at its Burke graphite project in Queensland, which is one of the highest grade deposits in the world held by an ASX listed company

Prior to the spin-off, Strike had defined a resource of 6.3 million tonnes grading 16% total graphitic carbon, well above the 5% to 6% found in its African counterparts.

Located about 125km north of the mining hub of Cloncurry, Burke is adjacent to Novonix (ASX: NVX) Mount Dromedary Graphite Deposit.

It is also close to Townsville, where a new battery minerals hub is emerging.

The company is about to kick-off a new drilling campaign at Burke and is working with the CSIRO to study the feasibility of refining the graphite into purified spherical product suitable for battery manufacturing locally.

Johnson said this could create a new value added industry in Australia rather than just shipping raw graphite offshore.

This article was developed in collaboration with Lithium Energy, a Stockhead advertiser at the time of publishing.

This article does not constitute financial product advice. You should consider obtaining independent advice before making any financial decisions.