NetworkNewsWire Editorial Coverage: A recent report released by the U.S. government has identified as many as 23 minerals that are “critical to the national economy and national security” of the nation. Immediately following the report, President Donald Trump signed an executive order to urgently reduce foreign dependence on these minerals and ramp up domestic production.
One critical metal of heavy emphasis on the list is lithium, which the U.S. is currently importing 50% from abroad. This presents an unprecedented opportunity for a country that has so much undeveloped lithium reserves but previously chose to mostly bypass domestic mining in favor of imports. This executive order now changes everything, and with the global demand for lithium used in electric car batteries rising at an unstoppable pace, the global lithium supply landscape is set for a shakeup. Companies poised to lead in the supply of lithium include Standard Lithium Ltd. (TSX.V:SLL) (FRA: S5L) (OTCQX:STLHF) (STLHF Profile), Liberty One Lithium Corp. (TSX.V: LBY) (OTCQB: LRTTF) (FRANKFURT: L1T), Albemarle Corporation (NYSE: ALB), Lithium X Energy Corp. (TSX.V: LIX) (OTC: LIXXF) and Nemaska Lithium Inc. (TSX: NMX) (OTCQX: NMKEF) (FRANKFURT: N0T).
The world is moving fast towards “electrification” of the auto industry to reduce global emissions and pollution. For this, lithium has become a hot commodity for its role as a key ingredient in electric vehicle batteries. The global EV revolution, first started by Tesla, is now getting bigger and more influential than ever. Carmakers like General Motors and Volvo have pledged to end production of gas-powered vehicles altogether in the future (http://nnw.fm/HuFx7). Volkswagen is even willing to thrust $40 billion into EV development by 2022, just to name a few.
This means lithium is going to keep its status as an in-demand critical commodity for a while. According to data from Global Market Insights, Inc., the worldwide market for Li-ion batteries alone is set to exceed USD $60 billion by the year 2024 (http://nnw.fm/Y84e0). It is estimated that one lithium mine needs to be brought on line each year through 2025 to meet its fast-growing demand. With Trump’s new executive order in effect, the next lithium mine could well be in the U.S.
While U.S. Geological Survey (USGS) data reveal that continuing exploration has increased global lithium resources worldwide (http://nnw.fm/CRs1v), lithium producers will have their hands full in meeting rampant demand.Lithium companies like Standard Lithium Ltd. (TSX.V: SLL) (FRA: S5L) (OTCQX: STLHF) are wasting no time to get operations in order to potentially cash in on this EV-driven lithium boom and embrace the U.S. government’s new policy to expand lithium production.
Based in Vancouver, B.C., Standard Lithium stands out as a premier lithium developer focused on the production of high-quality lithium at a low cost. The company is engaged in unlocking the value of large-scale lithium brine resources that are already in existence in the United States and can be quickly brought into production.
Standard Lithium’s approach is based on its stance that new lithium production can be rapidly brought on stream through minimizing project and process risks and through leveraging advances in lithium extraction technologies and processes.
Exploration and Development
Standard Lithium recently announced the expansion of the lithium brine project at its Bristol Dry Lake property in California’s Mojave Desert, where six new evaporation ponds have been installed (http://nnw.fm/9LBwK). The company is taking advantage of record-high evaporation rates in this region to pre-concentrate brines produced from the project, which will then be shipped to its testing and processing facilities at three North American campuses.
Standard Lithium is also in the midst of drilling work at its Bristol Dry Lake property and has completed four exploration boreholes, with two more planned. Preliminary results have equaled and exceeded historic data, and full QA and QC results are scheduled to be released during the first half of 2018.
The Bristol Dry Lake project encompasses an area spanning more than 33,000 acres, including both patented and placer mineral claims and private property. Geophysical data that was recently acquired indicates the basin is deep and expansive, and historical drill samples have shown lithium contents of more than 100mg/l over the drilled interval. Bristol Dry Lake is an established mining area with world-class infrastructure at the project as well as paved road and rail access and water and electricity.
Standard Lithium has forged agreements with National Chloride Corporation of America and TETRA Technologies (NYSE: TTI), two of the established brine producers in this region, to explore and develop the area for potential lithium production. Under the agreements, the company can conduct exploration, brine sampling, extraction, evaporation and process testing.
In order to advance the project, Standard Lithium has amassed a strong team of scientists and process engineers who are applying a hybrid approach that utilizes both conventional and modern extraction processes.
The company has additionally entered into an agreement to explore highly promising brines covering an area of about 30,000 acres in the Smackover Formation, which extends across Texas, Arkansas and Louisiana. This presents a low-risk investment with promising potential returns in a region with well-understood geology that further has a lengthy history of brine production and infrastructure for profitable mineral extraction. In historical analysis of the Arkansas Smackover Formation, a lithium content of 365mg/l was shown.
Potential Industry Comparables
Another Canada-based player looking to help meet the growing global lithium demand is Liberty One Lithium Corp. (TSX.V: LBY) (OTCQB: LRTTF) (FRANKFURT: L1T). Headquartered in Vancouver, B.C., Liberty One currently has plans underway to examine a short list of prospective lithium properties in Latin American and the continental U.S. during Q1 of 2018. The company also recently announced plans to commence an evaluation of its North Paradox property during 2018. Liberty One’s North Paradox property consists of 233 placer claims encompassing 4,480 acres in the Paradox Basin of Grand County, Utah. Liberty One seeks out regions that are ideally situated for lithium brine production via low-cost and well-proven evaporation methods and which are adjacent to functional infrastructure and an experienced labor force.
One of the biggest producers of lithium raw material in the world is Albemarle Corporation (NYSE: ALB), which is based in Charlotte, NC, and is a global market leader for lithium compounds. In Q3 2017, Albemarle logged net sales of $343.6 million for lithium and advanced materials, representing a year-over-year increase of 42.9 percent. This is clear evidence of the potential for lithium producers to profit hugely in the face of increasing prices and demand.
Growing global interest in lithium’s rising star is also evidenced in recent acquisition activity. Lithium exploration and development company Lithium X Energy Corp. (TSX.V: LIX) (OTC: LIXXF) recently entered into a definitive agreement with Nextview New Energy Lion Hong Kong Limited, through which Nextview will acquire all of Lithium X’s issued and outstanding common shares and warrants. Lithium X has two lithium projects in the prolific “Lithium Triangle” in the Salta province of Argentina and also has ownership interest in Pure Energy Metals, which is developing a lithium project in Nevada.
Another Canada-based player that is specifically focused on serving as a supplier for the lithium battery market is Nemaska Lithium Inc. (TSX: NMX) (OTCQX: NMKEF) (FRANKFURT: N0T). Nemaska Lithium is developing a key spodumene lithium hard rock deposit in Quebec, Canada, that is being touted as one of the most important spodumene lithium hard rock deposits in the world, both in terms of volume and grade. The spodumene concentrate that is produced at the company’s Whabouchi mine will be shipped to Nemaska Lithium’s lithium compounds processing plant, which is planned to be built in Shawinigan, Quebec. This facility will transform spodumene concentrate into high-purity lithium hydroxide and carbonate using the company’s proprietary methods, for which Nemaska Lithium holds nine issued patents and various patent applications that are pending in different countries.
The growing value and importance of the lithium market are clear, and companies like those named are primed for profitability as EV dominance blazes forward and lithium demand increases to keep pace. Li-ion manufacturers and end-users of Li-ion batteries, including car manufacturers, are increasingly motivated to ink multiyear deals with lithium producers to spur them to greater and faster investment and production. While the earth’s supply of lithium is plentiful, processing capacity remains an issue—which will continue to spell motivation for end users and profit for lithium producers.
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Originally published in networknewswire.com
