ASX battery metal producers are riding an expectation that metal prices will recover
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The number of ASX-listed tech metals is growing, with the level of activity gearing up in the space as positive indicators have industry players betting on a strong recovery.
Prices for lithium carbonate, a key battery metal used in electric vehicles and mobile phones, are still in the doldrums and way off market highs in 2018.
The market price is trading at $US7.25/kg ($10.09/kg) 99.5 per cent basis CIF China, Japan and Korea, according to the London Metal Exchange.
But the longer-term outlook for prices is looking brighter given further lithium production will be needed to keep pace with demand growth, market commentator Roskill said.
“Roskill maintains the view that future refined lithium supply will remain tight, with a period of sustained supply deficit in the mid-2020s,” the consultancy said.
Last week, Tesla car boss Elon Musk called on nickel producers to dig up more of the battery metal.
Australian Strategic Materials (ASX:ASM) started trading as a standalone entity on Thursday following its demerger from Alkane Resources (ASX:ALK).
The company said with its Korean joint venture partner ZironTech it had completed the first production run of neodymium metal at their commercial pilot plant in South Korea.
The production run using a patented reduction process delivered 7.6kg of neodymium metal assaying 99.8 per cent, which is a higher purity than typical neodymium.
Australian Strategic’s low-emission, high-purity metal refining technology is being used to produce metals of zirconium, titanium, and rare earths used in renewable energy and specialty alloy markets.
The joint venture is moving toward final commissioning of their electro-refining plant which is expected to produce high purity (99.9 per cent) titanium metal in August.
“It is possible that a standalone clean metal plant could be built in Korea to feed critical metals to Korean industry, but also possible that another clean metal plant could be located within Australia to feed critical metals for advanced Australian manufacturing,” managing director David Woodall said.
Australian Strategic’s Dubbo project in NSW is a large deposit of rare earth minerals.
Lake Resources (ASX:LKE) was trading steady at 3.7c as it reported high concentration production of lithium chloride at the pilot processing plant of its technology partner, Lilac Solutions.
An initial 20,000 litres of brine from Lake’s Kachi lithium brine project in Argentina is being processed at the direct lithium extraction plant in California.
The next step is for an independent assay laboratory to convert the lithium chloride samples into battery quality lithium carbonate.
“Continuing to demonstrate successful production of clean, highly concentrated lithium chloride at pilot scale is a major advancement,” managing director Steve Promnitz said.
Pilbara Minerals (ASX:PLS) saw a 7 per cent rise in its share price to 37c after it secured a low cost $US110m ($153m) debt facility to replace existing funding.
The refinancing through international bank BNP Paribas and Australia’s Clean Energy Finance Corporation will be used to retire a Nordic Bond that was the original financing for the company’s Pilbara project.
The new finance facility comes with an interest rate of around 5 per cent. BNP is also renewing the company’s existing $US15m working capital facility.
“The new facilities are offered on very competitive terms, putting us in a very strong position to ride out the current soft market conditions and capitalise on the rebound in the lithium market, when that inevitably occurs,” managing director and CEO, Ken Brinsden said.
The lithium-tantalum producer is developing its Pilgangoora project in WA’s Pilbara region to supply the electric vehicle and energy storage markets. Pilbara Minerals recently signed off-take deals with Chinese customers.
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