The demand for critical minerals, such as lithium and nickel, has exponentially increased in recent years, paralleling the increasing adoption of electric vehicles and global efforts towards sustainable energy and achieving net-zero goals.
The electric car industry’s rapid expansion has played a pivotal role in the success of critical minerals, particularly as essential components in rechargeable batteries. This success has, in turn, enticed numerous exploration endeavours as prospectors seek lucrative opportunities in the field of lithium exploration.
Europe appears to be at the heart of this surge, with fully-electric car sales in the continent increasing 47% in the first nine months of 2023, led by luxury European car manufacturers including Volkswagen, Mercedes-Benz, Porsche and BMW.
However, after years of accelerating growth, Europe’s electric car sales appear to be entering a go-slow zone as drivers wait for better, cheaper models, with recent subsidy cuts in markets like Germany, Sweden, and the UK damaging demand, particularly for Plug-In-Hybrid Vehicles (PHEV).
Figure 1: Europe Battery-Eclectic-Vehicle (BEV) and Plug-In-Hybrid (PHEV) demand predictions. Source: EV Volumes.
Globally, EV demand doesn’t appear to be faltering, with over 2.3 million electric cars sold in the first quarter of this year, a substantial 25% increase compared to the corresponding period last year.
If forecasts for the total sale volume of 2023 hold true, electric vehicles could represent 18% of total car sales by the end of the calendar year.
Clean Energy Push
The substantial rise in demand can largely be ascribed to the global momentum towards green energy initiatives.
Specifically, the European Union has played a significant role by implementing new CO2 standards for cars and vans, aligning with its 2030 objectives outlined in the Fit for 55 package, designed to reduce the European Union’s greenhouse gas emissions by 55% by 2030.
Building upon these efforts, the European Union has additionally set mandates for all new cars to be 100% electric by 2035, providing further impetus to the demand for electric vehicles.
Figure 2: EV demand in Europe has rapidly increased in tandem with government policy and green energy shift
Critical Minerals and Meeting EU Goals
Critical minerals are set to play a pivotal role in meeting the rising demand and achieving the EU’s goals for a greener future, driving the focus on critical mineral exploration.
Among these minerals, lithium and nickel stand out as key components in batteries, with the escalating demand for EVs directly fuelling the need for batteries and the associated critical minerals.
In 2022, the demand for automotive lithium-ion batteries surged by approximately 65%, with a substantial portion—around 60% of lithium, 30% of cobalt, and 10% of nickel—directly attributed to EV batteries. This marks a substantial increase from the 2017 figures, which stood at approximately 15%, 10%, and 2%, respectively.
Recognising this shift, numerous European mining companies are actively striving to meet the escalating demand not only for critical minerals but also for components vital to electric vehicles.
Vulcan Energy Resources (ASX:VUL)
Vulcan Energy, a European-based exploration company, is dedicated to catalysing a net-zero carbon future by providing lithium chemicals and renewable energy through its groundbreaking Zero Carbon Lithium™ Project.
This innovative project marks a significant milestone as the first initiative combining renewable heat and power, lithium production, and lithium hydroxide conversion, with the aim to supply the rapidly growing battery EV industry directly from Europe.
In the initial phase of the Zero Carbon Lithium™ Project, the Company has outlined plans to produce 24,000 tonnes per annum of lithium hydroxide. This substantial output is anticipated to meet the demand for 500,000 electric vehicles annually, emphasising Vulcan Energy’s commitment to driving sustainability in the EV sector.
Phase one of Vulcan’s operations focuses on the Lionheart development area, a key brine-producing site. The Company’s goal is to produce and re-inject a targeted rate of 950 litres per second of lithium-rich brine over 30 years. The anticipated lithium recovery from proven and probable reserves is 647,000 tonnes of lithium hydroxide monohydrate (LHM) or 569,000 tonnes of lithium carbonate equivalent (LCE) over the same period.
Vulcan Energy operates several production plants across Europe, including the Pilot Lithium Extraction Plant, the Lithium Extraction Optimisation Plant (LEOP), the Central Lithium Electrolysis Optimisation Plant, the Renewable Energy Plant, the Lithium Extraction Plant, and the Central Lithium Plant.
Commencing in 2021, Vulcan’s Lithium Extraction Pilot Plant has achieved continuous success, boasting over 90% lithium recoveries. The recent official opening of the Lithium Extraction Optimisation Plant (LEOP) is a significant milestone, and is expected to produce the first tonnes of lithium chemicals from brine in Europe by the end of 2023.
VUL’s Australian Stock Exchange-listed share price has risen 7.258% today and is currently trading at $2.660 (2:00pm UTC+ 8 hours).
Figure 3: Vulcan Energy Phase One is targeting 24,000 tonnes of lithium hydroxide production capacity per year, enough for approximately 500,000 battery electric vehicles and representing a major step forward to a European green lithium supply chain.
Metals One PLC (AIM:MET1)
Metals One, a critical metals exploration company based in the UK, successfully listed on the AIM in August this year after a prosperous £2.2 million Placement. The listing introduces its compelling portfolio of European battery critical metals to investors, aligning with the Company’s objective to meet the increasing demand for electric vehicles in the continent.
Notably, significant progress has been made in the Norwegian SRH Råna Project, with the Company announcing results in October from its 5,000 metre diamond drilling program.
Metals One reported impressive findings, with Hole 23RAN001 revealing a semi-massive to massive sulphide zone of 2.4 metres at 0.8% Ni, 0.2% Cu, 0.10% Co from a depth of 66.4 metres. This discovery occurred within a broader mineralised interval of 10.2 metres at 0.4% Ni, 0.1% Cu, 0.05% Co from 63.7 metres.
In Finland, the Black Schist Project boasts an Inferred Mineral Resource of 28.1 million tonnes of Talvivaara-type mineralised material, characterised by a grade of 0.19% nickel (53,800 tonnes), 0.10% copper (27,900 tonnes), 0.01% cobalt (3,400 tonnes), and 0.38% zinc (180,000 tonnes) at Rautavaara. The Project also includes exploration targets within the Kainuu Schist Belt in eastern Finland.
MET1’s London Stock Exchange-listed share price has risen 3.33% today and is currently trading at 3.10 pence (1:25pm UTC+ 8 hours)
European Lithium (ASX:EUR)(FRA: PF8) (OTC: EULIF)
European Lithium is a mining exploration and development company with a primary focus on advancing its Wolfsberg Lithium Project in Austria. The Company aspires to emerge as the inaugural local lithium supplier integrated into the European battery supply chain.
The Wolfsberg Lithium Project consists of 22 original and 32 overlapping exploration licences, with a mining license spanning across 11 mining areas. The Project uniquely leverages substantial groundwork, including comprehensive exploration, extensive metallurgical testing, and thorough mining and pre-feasibility studies conducted by its previous owners.
In the second quarter of 2018, the Company successfully concluded a favourable pre-feasibility study. However, this study was based on the existing measured and indicated resources, amounting to 6.3 million tonnes at 1.17% Li20, which has since changed.
European Lithium is actively engaged in augmenting the measured and indicated resources for the definitive feasibility study. The objective is to enhance the Project design and evaluation, accommodating a mining rate of approximately 800,000 tonnes per annum. This strategic move aims to not only increase the mining rate but also extend the overall mine life.
The current Mineral Resource Estimate, incorporating measured, indicated, and inferred resources, now stands at 10.98 million tonnes at 1% Li2O. This expanded resource base forms a crucial foundation for the ongoing development and assessment of the Project’s viability.
EUR’s Australian Stock Exchange-listed share price is currently trading at $0.076 (2:00pm UTC+ 8 hours).
Figure 4: European Lithium is striving to expedite the development of its Wolfsberg Lithium Project, anticipating its potential to emerge as a significant lithium producer in Europe.
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