Lithium is storming up the charts and here’s proof
Link copied to
If it wasn’t already clear that lithium is back in the limelight – and we don’t mean Britney Spears alleging that she was forced to take it as an antidepressant – the latest move by Pilbara Minerals (ASX:PLS) ought to emphasise it.
The board of the major lithium producer has approved plans for a staged restart of the Ngungaju Operation from the December quarter of 2021, with full annual production capacity of between 180,000 dry metric tonnes (dmt) and 200,000dmt expected by the middle of 2022.
This will take the aggregate production capacity of the combined Pilgangoora Project up to between 560,000dmt to 580,000dmt per annum.
Pilbara Minerals says the decision to restart Ngungaju, which it acquired when it was still known as the Altura Lithium Operation, was in response to strong demand conditions.
As previously noted on Stockhead, many lithium producers have sold out their excess inventory due to exceptional demand from the battery sector, forcing some of them to cancel volume commitments to customers.
Market forces being what they are – no coercion of formerly famous music stars here – lithium feedstock and chemical producers have started to accelerate expansions to meet demand.
It’s not just the big players who are making waves, small cap lithium plays on the ASX have also responded to the growing demand for the lightweight but oh so important metal.
Firefinch (ASX:FFX) recently launched a $47m placement that was aimed primarily at accelerating the ramp-up of gold production at its Morila gold mine.
However, at least a portion of the funds will be used to facilitate the demerger of its Goulamina lithium project in Mali into a separate ASX-listed company.
This follows the company reaching a 50:50 joint venture with Chinese giant Ganfeng to develop the shovel-ready project towards production.
Under this agreement, Ganfeng will invest up to $US130m in three tranches for its 50% share of the project with the final $US91m to be made upon a final investment decision.
The FID will also trigger Firefinch’s move to demerge its 50% interest in the project.
Global Lithium (ASX:GL1) has completed its first reverse circulation drill program of 36 holes totalling 5,454m at the Marble Bar lithium project in Western Australia’s Pilbara region.
While the project already hosts an Inferred resource of 10.5 million tonnes grading 1% lithium oxide at the Archer deposit, the infill and step-out drilling is aimed at identifying opportunities to further grow this resource.
Assays are pending for the drilling.
Ioneer (ASX:INR) has been awarded an air quality permit for its Rhyolite Ridge lithium-boron project in Nevada.
The project will use heat recovery technology and co-generated zero-carbon power, allowing it to avoid the use of fossil fuels to generate electricity during normal operations.
Also in the US, Jindalee Resources (ASX:JRL) is seeking drill permits for its McDermitt project and expects to start exploration drilling at the Clayton North prospect in July.
Metallurgical test work on bulk samples from McDermitt, which has an indicated and inferred resource of 1.43 billion tonnes grading 1,320 parts per million lithium, have been commissioned.
Lake Resources (ASX:LKE) is advancing project funding discussions that could see it secure low cost financing for its Kachi lithium brine project in Argentina.
The company has received preliminary interest from over half a dozen international banks with strong experience of funding projects in Argentina subject to support from Export Credit Agencies.
Lake is seeking about 70 per cent of financing support for the project, which uses an innovative direct-extraction technique to produce cheap, high quality, environmentally friendly lithium.
Over in Zimbabwe, Prospect Resources (ASX:PSC) has started producing high quality petalite samples for potential customers from the pilot plant at its Arcadia hard rock lithium project.
While production of samples is expected to last for about three months, the company retains the option to extend production if there is demand.
Approval for the acquisition is being sought through the Superior Court of Quebec, though the joint motion filed by NAL. The deal is being contested by an alternative bidder and unsecured creditor of NAL.
NAL produced 114,000t of lithium concentrate in 2018 but was forced to halt production early in 2019 due to low prices.
At Stockhead we tell it like it is. While Firefinch, Lake and Prospect are Stockhead advertisers, they did not sponsor this article.