Eye on Lithium: Citi says high lithium prices are here to stay and could hit $60k per tonne
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All your ASX lithium news for Thursday, February 10.
Citigroup has substantially upgraded its lithium forecasts to US$60,000 per tonne for battery-grade carbonate.
The investment bank said this was off the back of higher EV production and sales expectations and resulting tighter short-medium term market balances.
“There may not be sufficient inventory to allow the deficit we model for the lithium market during 2022, meaning extreme lithium pricing is likely to be required to defer and/or destroy demand,” Citi said.
This means further increases on a commodity that soared a massive 486% over the last year.
“We forecast an extreme lithium deficit equivalent to 6% of supply during 2022 (equivalent to an oil market deficit of ~6md/d and a copper deficit of >1mt),” Citi said.
“EV sales are reaching the point of critical mass and we see ~10.7m EV during 2022 driving a 160k/t y/y, or 30% y/y increase in lithium demand.
“We see the same strong demand growth during 2022 whether using EV output or battery supply chain capacity to estimate lithium demand.”
Citi says that even its bull case for supply doesn’t see the market rebalancing until a year from now.
In a sign of how quickly things are moving in lithium, we have a new forecast out this morning from @OliverNugent and team at Citi, anticipating that demand will hit 1.3 million tons of LCE in 2025, a 16.5% jump over their prior forecast. Charts updated: https://t.co/nwNhYNj6xv
— Mark Burton (@mburtonmetals) February 9, 2022
Infinity has produced increased volumes of battery grade lithium carbonate and hydroxide from metallurgical test work at the San José project in Spain, as part of a feasibility study.
The company has an agreement with EIT InnoEnergy, to facilitate the development of the sustainable, novel and innovative sulphate roast process, and has retained around 0.8 kg of battery grade lithium hydroxide for future product verification.
“The production of battery grade lithium hydroxide in the scale-up phase has highlighted the successful implementation of the innovative sulphate roast process in alignment to key EU ESG principles,” CEO and MD Ryan Parkin said.
“We are looking forward to broadening discussions with end users in the progression of a fully integrated lithium-ion battery supply chain in Spain and the EU.”
The company has committed $25 milly from its recent $75m cap raising to an early works and exploration drilling program for its Manono lithium and tin project in the Democratic Republic of Congo.
AVZ says around $19m will fund the early works program in the second half of the 21-22 financial year, with $6m to fund extension drilling at Roche Dure.
“This decision demonstrates the Board’s confidence of receiving the support required to make the development of the Manono Project a reality and importantly, should maintain our project development timetable despite the award of the mining licence taking longer than we had previously anticipated,” MD Nigel Ferguson said.
“The drilling program has the potential to add significant value with respect to expanding the reserve life of the Roche Dure deposit, whilst also identifying high grade ore zones for initial feed to the plant, providing increased SC6 production volumes from the start of operations.”
The company has nabbed environmental impact assessment approval for resource expansion and production well drilling at its Rincon project in Argentina.
The resource expansion drilling will target the defined exploration target of 262,000 tonnes to 479,000 tonnes of lithium carbonate, between the depth interval of 102.5m to 300m below ground level – which underlies the existing indicated mineral resource estimate (MRE).
The company says the combined estimates outline the potential for a range of up to 507,000 tonnes to 724,000 tonnes of contained lithium carbonate to a depth of 300m.
The production well drilling aims to facilitate the preparation of a MRE and a feasibility study later this year.
MD Jerko Zuvela says lithium market fundamentals remain strong and that Argosy’s transformation into a “battery quality lithium carbonate producer and cashflow generator” is nearing.
The company has expanded its Pilbara portfolio, picking up the Split Rock lithium project – which is right next door to Thor Mining’s (ASX: THR) Ragged Range project.
QXR says the two projects (E46/1367 and E45/6107) complement and strengthen its existing portfolio of quality lithium-focused projects, adding a further 51km2 of tenure.
“The projects are underexplored have tremendous exploration potential,” chairman Maurice Feilich said.
“The company’s consultants are currently planning for an initial reconnaissance mapping and soil/rock chip sampling program to be undertaken at Split Rock, as well as a follow-up sampling program at Western Shaw.”
Initial reconnaissance rock sampling at the company’s Barrow Creek project in the NT has identified outcropping LCT pegmatites up to 817ppm lithium, along with a new mineralised zone which remains open in all directions.
Askari VP exploration and geology Johan Lambrechts said the finds confirm the company is exploring in an area where LCT-type pegmatities host lithium.
“[This] gives us a high chance of discovering economic grade lithium mineralisation,” he said.
Detailed surface sampling and mapping will start next week, with RC drilling planned to follow up.