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Lithium Skyrockets 67.61% Month-to-Month

2 June 2023 13:28
Lithium Battery AdobeStock Online

After a slow start to the year, lithium is staging a massive comeback for the second half of the year, with the battery metal now trading at 297500 CNY/T after a month-to-month surge of 67.61% (12:52 pm UTC +8 Hours).

Undefeated Demand

Lithium has now bounced back from a 19-month low it hit last month as investors believed that demand for the metal from the EV industry was waning due to a significant increase in production late last year, a belief proven false when data revealed that both sales and outputs for NEVs in China skyrocketed 110 per cent in April.

Much of the battery metals’s growing popularity can be attributed to the rapidly growing electric vehicle market, with countries around the world fighting to secure supply for this burgeoning industry, with a report from the International Energy Agency in July last year stating that to meet government demand, the critical mineral and battery metal supply chain, including lithium, will have to increase ten-fold.

The same report also stated that demand for the EV industry could constitute up to 80 per cent of lithium demand in 2030, with demand in 2030 set to outpace 2021 production fourfold.

Lithium in the Lucky Country

With demand growing, explorers big and small have been scouring the globe looking to secure supply for this hungry industry.

Australia in particular has become a haven for lithium explorers, with the lucky country’s lithium exploration scene being set alight recently when US Mining giant Albermarle made its third takeover bid for Liontown Resources and its lithium portfolio, including the flagship 156Mt @ 1.4% Li2O Kathleen Valley Lithium Project.

The takeover bid was shot in the arm for Oar Resources which has been zeroing in on a number of lithium-bearing pegmatites at its Denchi Project just down the way from Kathleen Valley, with the Company’s faith in the Project leading it to expand the exploration area beyond a thousand metres with applications for five additional tenements covering lithium prospective land.

Albermarle’s acquisition attempt also set the stage for Evergreen Lithium’s $7 million dollar entrance to the ASX with an IPO that lit up the Australian market and saw the newly listed Company’s share price soar over 60 per cent within 48 hours of listing.

Since listing the explorer has been hard at work shoring up its extensive portfolio, most recently uncovering a number of new lithium pegmatite targets at its flagship Bynoe Project which potentially hosts extensions of the 30.6Mt@ 1.31% Li2O Finniss Lithium Deposit held by Australian exploration giant, Core Lithium.

An International Battle

Outside of Australia, explorers’ hunt for lithium has led to the creation of a number of hotspots all around the globe.

Ontario, in particular, is looking to be at the forefront of Canadian lithium exploration, with a number of explorers staking claims in the state’s ‘Electric Avenue’, with both Sultan Resources and Blaze Resources acquiring land in spitting distance of Frontier Lithium’s 18.8 MT @1.52% Li2O indicated Spark Deposit in last week.

South American Nations are also well prepared to do its part in securing lithium supply, with explorers like Pursuit Minerals and C29 Metals looking to crack into Argentina’s extensive lithium Salar’s with their respective Rio Grand Sur and Pocitos Projects.

Having finalised its acquisition of the Project in March, Pursuit Minerals has just been given the green light to fire up exploration at the 9,233-hectare Rio Grande Sur Project which covers approximately 3000 hectares of the 2.1mt LCE @ 370mg/Li2O Rio Grande Sur, with the Company hoping to put the drill to the Project later this year.

C29 Metals meanwhile continue to develop the immense promise of its Pocitos Project, the acquisition of which saw the explorer’s share price jump a spectacular 90 per cent, with the Company now hoping to deliver a maiden MRE later this year following drill results showing grades up to 142 ppm Li.

Test work for the Project, involving the use of the cutting-edge Ekosolve technology the Company plans to utilise as a method to get Pocitos lithium product to market faster, has also been a success so far, with the technology hitting a 95.8 per cent extraction efficiency rate, producing an average concentration of 95.3 ppm lithium.

Securing Supply

The growing demand for lithium has also led to a number of governments making moves to take advantage and give their nations a head start in the production of future critical metals.

The industry was turned on its head in April when Chile moved to nationalise its lithium production and protect what is the world’s largest natural lithium resource, transferring control of industry giants SQM and Albermarles lithium operations to a separate state-owned company.

On the opposite side of the coin is Brazil, which with its new Lithium Valley Initiative is looking to attract capital markets and private investments into Brazil’s growing lithium battery supply chain by streamlining the development and construction of projects in the lithium mining and processing industries by international companies.

The initiative was spearheaded by both the country’s government and a number of lithium explorers currently active in Brazil’s Minas Geris region, including Australian-listed Latin Resources, who have been closing on resources upgrade to its already significant 13.2Mt @ 1.2% Li2O Colina deposit, recently extending the prospect’s footprint to over 2.0 km long.

Building a Battery Bastion

However, the beneficiaries of lithium’s sustained demand extend beyond explorers, as downstream producers also stand to reap the rewards.

Seeing this need for production, Lithium Australia divested 70 per cent of its interest in the Lepidolite Hill Lithium Project and 20 per cent interest in the Greenbushes South Lithium for a combined value of $3 million dollars in comprised of shares and cash, so it can better focus on developing its ever-growing battery development and recycling business.

Lithium Australia moved to commercialise its wholly-owned subsidiaries in August last year as both Envirostream and VSPC stand at the forefront of Australia’s emerging lithium-ion industry, with VSPC producing lithium cathode pure enough for applications in the electric vehicle and energy industries.

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