Tech Metals: Galan, Lepidico leap as life tentatively returns to the battered lithium sector
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In 2019, a subsidy reduction tapped the brakes on China’s world-leading (but still emergent) EV market, with sales falling 4 per cent to 1.206 million units year-on year.
On January 11, China announced there would be no major reduction in the New Energy Vehicle (NECV) subsidy in 2020.
This timely shift in Chinese EV policy appears to have re-injected some life into the sickly lithium sector.
Investor moods appear to be lifting as a consequence, with producers like Pilbara Minerals (ASX:PLS) +43 per cent, Altura Mining (ASX:AJM) +26 per cent, Orocobre (ASX:ORE) +40 per cent, and Galaxy Resources (ASX:GXY) +41 per cent, all up year to date:
And two of those four even made it onto Credit Suisse’s list of ASX-listed companies tipped to make big gains in 2020.
This positive vibe is also good news for the next generation of producers.
Today, Galan Lithium (ASX:GLN) said Ganfeng Lithium – a global battery metals behemoth – had joined the explorer’s register.
This was enough to send Galan up +21 per cent to 24c per share in morning trade.
The stock is now up 84 per cent since the start of the year, but still well down from its +60c, March 2019 highs.
And then there’s innovative lithium hopeful Lepidico (ASX:LPD), which today jumped +12 per cent on the opening bell after it produced high-purity lithium hydroxide.
It achieved this using its LOH-Max tech, which produces high-purity lithium hydroxide without the potentially problematic by-products.
“In addition to being compatible with Lepidico’s L-Max process technology, LOH-Max also represents an alternative final process step in the conventional conversion of spodumene concentrates, without the generation of costly and potentially problematic sodium sulphate,” Lepidico managing director Joe Walsh says.
“Lepidico is now focused on generating samples of all products from the phase one project for qualification purposes.”
Lepidico will refine a larger sample of high-purity lithium hydroxide monohydrate, which will be used to start the product qualification process with prospective customers.