Monsters of Rock: Lithium’s the word as battery metals stocks party on
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Investors are going batty for the EV ingredient in 2021 and IGO (ASX:IGO) put a rocket up the big lithium miners again today after announcing first lithium hydroxide production from its Kwinana plant.
The first chemicals produced by IGO and majority JV partner Tianqi at the Talison lithium plant signals the start of Australia’s future as a downstream supplier of lithium chemicals.
Our miners had, til now been following the general modus operandi of Australian miners by digging the stuff up, beneficiating it and shipping it to China for conversion.
All three major chemical plants in construction or commissioning now have partial Australian ownership.
The next cab off the rank will be the Kemerton facility owned 60-40 by America’s Albemarle and Chris Ellison’s Mineral Resources (ASX:MIN), while Wesfarmers (ASX:WES) recently gave the green light to its Mt Holland mine and Kwinana chemicals plant with Chile’s SQM.
IGO shares soared almost 5% on the news, which comes not long after it completed the $1.9 billion deal that gave it a 49% stake in the Kwinana plant and 25% of Greenbushes in WA’s South West, the biggest hard rock lithium in the world.
There is a long ramp up phase to come for IGO and Tianqi, with sellable product due in the December Quarter and battery grade product for accreditation in March 2022. The ramp up of the first train at Kwinana to its 24,000tpa nameplate capacity is due by the end of 2022.
With the ramp up period ahead RBC analyst Kaan Peker warned it could be a while before IGO is making dough from the plant.
The big iron ore stocks had a topsy-turvy trading day after a major drop last week. FMG (ASX:FMG) was a notable loser, taking a 4.42% haircut.
But battery metals stocks drove gains across the mid cap and smaller large cap space.
Lithium prices have climbed again with high purity carbonate more than 10% up over the last week. The spodumene reference price was around 27% higher month on month at the end of the month with 6% concentrate fetching US$880-950/t, up from US$690-750/t in June.
That doesn’t even come close to the single 10,000t basket Pilbara Minerals (ASX:PLS) sold last month on its Battery Material Exchange platform for US$1250/t. Prices were under US$400/t in October last year.
Pilbara stock continued its merry dance, rising 11.14% to 3.45PM AEST. Its shares are almost 600% up on this time last year.
Euro lithium and renewable energy play Vulcan Energy (ASX:VUL) was up almost $1.50 or 12% plus to $13.57.
In the broader battery and technology metals sphere Lynas (ASX:LYC) was up a touch over 3% on an update regarding its Malaysian operations, which included news that some 98% of staff had received their first Covid vaccination shot and 94% had been vaccinated twice.
Lynas also received an appeal from anti-Lynas activists to a judicial review that found the Malaysian Government’s decision to award it a fourth operating licence should stand.
It has also been given a six month extension to March next year to a deadline to build a permanent disposal facility for low level radioactive waste.
Nickel miner Mincor Resources (ASX:MCR) meanwhile rose to 5 year highs after announcing the ‘best intersection to date’ from its Golden Mile target at the Kambalda nickel operations.
The ‘Golden Mile’ is an untested 1100m between the Long and Durkin North mines which only opened up for drilling once Mincor consolidated the ground by buying the shuttered Long Nickel Mine off IGO.
The recent assays included a massive sulphide interval of 8.1m at 4.2% Ni, with a 3.7m section at 6%.