“I’m so happy, ‘cos today I found my friends…”

Leader of the opposition Bill Shorten must have been playing Nirvana’s “Lithium” before his budget reply on Thursday.

The would-be (and likely next) prime minister of Australia made lithium a big focus in his response to Josh Frydenberg’s first federal Budget, saying he would boost the battery metals industry in Australia if elected. The ASX’s small cap lithium players — which number almost 120 — were certainly pleased.

Many of them are in Western Australia, the state that hopes to become ‘Lithium Valley’.

<<< Scroll down for a table of the ASX’s small cap lithium stocks >>>

“Here’s the remarkable thing, we already have every single resource to make a lithium battery right here in Australia,” Shorten said.

“So instead of the usual trope of shipping the minerals overseas and buying back the finished product at largely inflated prices, let’s make the batteries here and let’s do this with electric vehicles and charging equipment and stations too, supported by Australia’s first electric vehicle policy.

He added that his party would provide a $2,000 payment to families who “want to join the fight against climate change and the fight to lower their power bills” by installing a battery storage system.

So how exactly does lithium, a soft and lightweight metal that was first discovered back in 1817, become the batteries that are so popular today?

Spodumene and brine

Lithium is mined from two main sources — hard rock (hosted in spodumene ore) and brine (lithium-enriched salt water).

Lithium from hard rock deposits, like those found in Australia, can be more expensive to extract initially.

Found mostly in Chile, Argentina, and Bolivia, brine deposits – which produce a lithium carbonate — occur when underground lakes, geothermal waters or petroleum brines are enriched with lithium.

The lithium-rich salty water is pumped to the surface into evaporation ponds, before the concentrated solution is processed into carbonate.

Spodumene is the main lithium bearing mineral mined from most hard rock lithium mines around the world. Lithium mined this way has an important advantage in EV markets, because the lithium-bearing spodumene ore can be transformed into lithium hydroxide – which commands a higher price than carbonate — after a relatively simple process and can produce cathode material more efficiently.

<<< Read Stockhead‘s lithium primer here >>>

The typical grades of a hard rock lithium mine range between 0.9 and 1.6 per cent, while lithium concentrations from brines is between 0.07 and 0.16 per cent.

Mined material is processed into lithium carbonate or lithium hydroxide, which can be sold to make cathode material for lithium-ion batteries.

(Batteries include an anode [positive] and a cathode [negative] and the electrical current flows between the two.)

The cathode is then shipped to a battery maker, who sells the final battery product to car makers, stationary storage manufacturers, and other electronics manufacturers.

The players along the way

On the production side of the equation, you can (almost) count the number of ASX-listed lithium producers on one hand  – at the moment, they include Pilbara Minerals (ASX:PLS), Altura Mining (ASX:AJM), Galaxy Resources (ASX:GAL)Orocobre (ASX:ORE), Alliance (ASX:A40) and Mineral Resources (ASX:MIN).

Explorer AVZ Minerals’s (ASX:AVZ) Manono project is one of the few lithium projects globally that have low levels of impurities of mica and iron oxide.

This enables AVZ to meet the standards required of the next generation of lithium batteries, as requirements become more stringent.

Lithium battery manufacturers are demanding higher purity levels, as impurities can result in poor battery performance or battery failure.

In August this year the Manono project was confirmed as the largest hard rock lithium project in the world, and the second-highest grade.

Near term producer Kidman Resources (ASX:KDR) wants to start construction of its Mt Holland project, a joint venture with the world’s largest lithium miner SQM, in the second half of 2019.

ioneer (ASX:INR) is developing one of only two major lithium-boron deposits in the world.

Meanwhile, innovative companies like Lepidico (ASX:LPD) and Lithium Australia (ASX:LIT) are using their own technologies to produce lithium carbonate from non-conventional sources, including tailings — the materials left over after processing ore to separate valuable material from uneconomic material.

Lepidico plans to build a $3 million Perth-based pilot plant — or demonstration facility – to show off its technology to potential sales and finance partners ahead of development of its larger phase one processing plant.

The company is targeting commercial production for 2020.

Lithium Australia plans to be the first Australian company to do everything from mining lithium to making batteries.

Stage 1 of Lithium Australia’s Sileach pilot plant trial produced “outstanding results” in 2018 as the company aims to convert mine waste into lithium-ion batteries – a world first.

And this week, Lithium Australia announced it had bought a stake in Australia’s only lithium battery recycler.

Here is a table of small cap lithium stocks on the ASX, courtesy of leading ASX data provider MakCorp:

ASX codeCompany nameLast priceMarket capReturn YTDReturn 1-yr
A1C AIC RESOURCES LTD0.18 $ 13,500,000.00 -1238
A40 ALLIANCE MINERAL ASSETS LTD0.18 $ 234,953,536.00 n/a-29
AJM ALTURA MINING LTD0.1325 $ 276,310,112.00 -68-7
ABR AMERICAN PACIFIC BORATE & LI0.225 $ 42,068,400.00 -3752
ADN ANDROMEDA METALS LTD0.005 $ 6,777,496.00 -29-17
AWV ANOVA METALS LTD0.016 $ 10,226,116.00 -7360
ASN ANSON RESOURCES LTD0.072 $ 35,383,724.00 42-3
ADV ARDIDEN LTD0.0035 $ 5,869,081.00 -77-13
ARE ARGONAUT RESOURCES NL0.018 $ 27,978,852.00 -18-18
AGY ARGOSY MINERALS LTD0.098 $ 106,522,728.00 -67-25
AMD ARROW MINERALS LTD0.013 $ 3,774,487.25 -62-7
AEE AURA ENERGY LTD0.012 $ 13,563,715.00 -48-33
ARM AURORA MINERALS LTD0.015 $ 1,756,999.25 -46-25
ANW AUS TIN MINING LTD0.014 $ 27,834,390.00 -138
AVL AUSTRALIAN VANADIUM LTD0.02 $ 37,503,032.00 -63-5
AUT AUTECO MINERALS LTD0.007 $ 6,317,252.50 4040
AVZ AVZ MINERALS LTD0.043 $ 95,894,336.00 -84-39
BSM BASS METALS LTD0.012 $ 33,670,496.00 -569
BAU BAUXITE RESOURCES LTD0.055 $ 11,793,228.00 -80
BMT BERKUT MINERALS LTD0.145 $ 7,875,916.50 -9107
BGS BIRIMIAN LTD0.16 $ 42,321,620.00 -620
BMG BMG RESOURCES LTD0.01 $ 5,577,324.00 -1743
BOA BOADICEA RESOURCES LTD0.2 $ 10,569,034.00 -511
BRB BREAKER RESOURCES NL0.41 $ 72,162,352.00 -2323
CAD CAENEUS MINERALS LTD0.001 $ 18,619,644.00 -670
CAZ CAZALY RESOURCES LTD0.024 $ 6,283,657.50 -4920
CMC CHINA MAGNESIUM CORP LTD0.04 $ 18,497,542.00 10043
CHK COHIBA MINERALS LTD0.011 $ 7,310,756.50 22-15
CXO CORE LITHIUM LTD0.056 $ 38,890,132.00 -158
CGM COUGAR METALS NL0.0015 $ 1,598,208.25 -81-50
CUL CULLEN RESOURCES LTD0.013 $ 2,203,042.75 -58-35
DHR DARK HORSE RESOURCES LTD0.006 $ 9,880,433.00 -720
DTM DART MINING NL0.006 $ 5,568,257.00 -380
DEG DE GREY MINING LTD0.095 $ 39,776,644.00 -41-25
DEV DEVEX RESOURCES LTD0.038 $ 3,493,725.75 -53-17
DGR DGR GLOBAL LTD0.135 $ 79,713,648.00 444
E25 ELEMENT 25 LTD0.175 $ 14,693,761.00 -420
ENT ENTERPRISE METALS LTD0.012 $ 4,656,753.00 -409
ESR ESTRELLA RESOURCES LTD0.015 $ 8,486,133.00 -5014
EUR EUROPEAN LITHIUM LTD0.105 $ 61,994,604.00 -5334
EMH EUROPEAN METALS HLDS LT-CDI0.33 $ 46,925,512.00 -167
ERX EXORE RESOURCES LTD0.087 $ 40,502,188.00 7150
4CE FORCE COMMODITIES LTD0.01 $ 4,245,158.50 -89-33
GLN GALAN LITHIUM LTD0.325 $ 36,756,640.00 21014
GXY GALAXY RESOURCES LTD1.935 $ 796,709,440.00 -32-10
GAL GALILEO MINING LTD0.15 $ 18,056,090.00 -6
GML GATEWAY MINING LTD0.013 $ 11,242,151.00 -609
GSM GOLDEN STATE MINING LTD0.088 $ 3,190,105.50 -35
GPP GREENPOWER ENERGY LTD0.003 $ 4,696,111.00 -77-25
GWR GWR GROUP LTD0.099 $ 25,098,226.00 -45-6
HNR HANNANS LTD0.01 $ 23,855,454.00 -250
HWK HAWKSTONE MINING LTD0.017 $ 10,265,724.00 -550
HIP HIPO RESOURCES LTD0.011 $ 4,251,615.00 -6-21
INF INFINITY LITHIUM CORP LTD0.083 $ 15,784,202.00 -3928
IEC INTRA ENERGY CORP LTD0.023 $ 8,917,653.00 64130
IVR INVESTIGATOR RESOURCES LTD0.01 $ 6,659,748.50 -36-44
INR IONEER LTD0.1775 $ 250,747,200.00 -630
JDR JADAR LITHIUM LTD0.011 $ 5,284,836.00 -4210
JRL JINDALEE RESOURCES LTD0.27 $ 9,448,589.00 4-13
KAI KAIROS MINERALS LTD0.02 $ 16,193,184.00 -49-24
KLH KALIA LTD0.003 $ 7,543,042.00 -630
KDR KIDMAN RESOURCES LTD1.22 $ 493,852,832.00 -3412
KSN KINGSTON RESOURCES LTD0.02 $ 24,463,968.00 -518
KOR KORAB RESOURCES LTD0.039 $ 11,736,527.00 -2752
KTA KRAKATOA RESOURCES LTD0.025 $ 2,937,500.00 -380
LKE LAKE RESOURCES NL0.059 $ 21,651,632.00 -53-26
LRS LATIN RESOURCES LTD0.002 $ 6,527,506.50 -82-33
LCD LATITUDE CONSOLIDATED LTD0.016 $ 4,402,864.00 -53-6
LPD LEPIDICO LTD0.028 $ 93,972,904.00 -3075
LTR LIONTOWN RESOURCES LTD0.021 $ 31,726,490.00 -38-12
LIT LITHIUM AUSTRALIA NL0.081 $ 37,770,780.00 -42-14
LI3 LITHIUM CONSOLIDATED LTD0.091 $ 9,990,433.00 1138
LPI LITHIUM POWER INTERNATIONAL0.2 $ 53,815,352.00 -35-21
MZN MARINDI METALS LTD0.004 $ 7,939,035.50 -60-33
MQR MARQUEE RESOURCES LIMITED0.043 $ 1,838,004.25 -90-14
MZZ MATADOR MINING LIMITED0.26 $ 14,009,667.00 -453
MXR MAXIMUS RESOURCES LTD0.081 $ 2,270,476.25 -35-4
MCT METALICITY LTD0.01 $ 6,024,637.50 -69-33
MLS METALS AUSTRALIA LTD0.002 $ 5,383,595.50 -60-33
MTC METALSTECH LTD0.02 $ 2,339,077.75 -92-33
MCR MINCOR RESOURCES NL0.455 $ 100,232,128.00 3032
MRC MINERAL COMMODITIES LTD0.2 $ 67,374,648.00 -4-2
MRR MINREX RESOURCES LTD0.012 $ 1,150,532.75 -86-40
MTH MITHRIL RESOURCES LTD0.006 $ 2,534,335.25 -7920
NMT NEOMETALS LTD0.23 $ 122,394,208.00 -24-2
N27 NORTHERN COBALT LTD0.066 $ 3,551,684.75 -80-18
NVA NOVA MINERALS LTD0.014 $ 10,837,878.00 -56-33
OAR OAKDALERESOURCES LTD0.017 $ 3,542,041.25 -39-19
ORN ORION MINERALS LTD0.03 $ 56,212,004.00 -3350
PSM PENINSULA MINES LTD0.004 $ 3,451,488.25 -640
PNN PEPINNINI LITHIUM LTD0.003 $ 1,637,348.88 -93-58
PLL PIEDMONT LITHIUM LTD0.12 $ 83,797,544.00 -1137
PIO PIONEER RESOURCES LTD0.015 $ 22,611,378.00 -380
PM1 PURE MINERALS LTD0.015 $ 4,401,307.00 -22-7
RMX RED MOUNTAIN MINING LTD0.005 $ 3,890,184.00 -50-17
RLC REEDY LAGOON CORP LTD0.004 $ 2,011,358.50 -88-17
SYA SAYONA MINING LTD0.019 $ 30,982,680.00 -69-10
SCI SILVER CITY MINERALS LTD0.011 $ 3,230,812.75 -74-21
SI6 SIX SIGMA METALS LTD0.003 $ 1,372,509.50 -83-25
SUH SOUTHERN HEMISPHERE MINING0.033 $ 2,919,492.50 -45-27
SEI SPECIALITY METALS INTERNATIO0.028 $ 15,536,540.00 1275
SRK STRIKE RESOURCES LTD0.075 $ 10,900,070.00 2567
TAR TARUGA MINERALS LTD0.045 $ 6,352,525.50 -8413
THR THOR MINING PLC-CDI0.015 $ 11,470,409.00 -67-30
TRT TODD RIVER RESOURCES LTD0.074 $ 11,207,170.00 -314
TKL TRAKA RESOURCES LTD0.014 $ 4,638,494.50 -73-46
TKM TREK METALS LTD0.007 $ 2,186,125.25 -71-13
VMS VENTURE MINERALS LTD0.02 $ 10,932,852.00 -320
VXR VENTUREX RESOURCES LTD0.23 $ 61,547,784.00 526
VMC VENUS METALS CORP LTD0.16 $ 14,122,777.00 19-3
VKA VIKING MINES LTD0.008 $ 2,823,460.75 -78-50
WKT WALKABOUT RESOURCES LTD0.175 $ 51,722,456.00 8781
WML WOOMERA MINING LTD0.037 $ 3,944,655.25 -78-54
ZNC ZENITH MINERALS LTD0.059 $ 12,552,966.00 -72-32
ZEU ZEUS RESOURCES LTD0.013 $ 2,341,950.00 00

 

Stockhead is proud to use MakCorp as a provider of great value, accurate and reliable data on ASX-listed mining stocks. For more information head to MakCorp’s website.

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This article does not constitute financial product advice. You should consider obtaining independent advice before making any financial decisions.