Prediction: Where will lithium come from in the next decade?

Jun 12, 2019   Pageview:80

In order to meet the growing demand for electric vehicles (EVs), the lithium battery industry needs to invest heavily in the next decade. According to one of the industry's largest players, the investment will require more than $10 billion to meet the supply gap challenge.

 

Daniel Jimenez, senior vice president of business at Chile's Sociedad QuimicayMinera (NYSE: SQM), said lithium demand will increase by 600,000-800,000 tons of lithium carbonate equivalent in the next 10 years. Executives from the Chilean mining giant believe that global lithium investment will require $10 billion to $12 billion to meet this surge in demand.

 

But where will the investment come from and where will it go? In the case of SQM, the Chilean government blocked a Chinese investment that would sell 30% of the lithium giants to Chinese companies.

 

Now, Chinese investors seeking new supply of lithium batteries will have more incentives to invest elsewhere, including through Australian Bank Resources Limited (OTC:GALXF) and OrocobreLimited (TSX:ORL) (OTC: OROCF), or Through Canadian lithium companies such as Nemaska ??Lithium (OTC: NMKEF) (TSX: NMX) and QMC Quantum Minerals Corp. (TSX.V: QMC) (OTC code: QMCQF).

 

China suspects that countries may interfere with their bidding for SQM equity. "We don't know why they did it," said Liu Wei, China's Chilean trade and economic representative, if he believes other countries are disturbed. At the same time, China's capital is moving to other regions, especially to Canada and Australia.

 

Because the new lithium needs to come from somewhere, it is likely to be achieved through the expansion of the largest company, or Canadian explorers such as QMCQuantumMinerals or NemaskaLithium will rise to production.

 

Large-scale lithium enterprise in the future

 

Although Chilean regulators have blocked a 30% stake in SQM, current stakeholders (Nutrien) said they are still interested in pushing them to sell $4 billion in shares, possibly by the end of June. Currently, the top two runners seem to be Rio Tinto and China's largest lithium producer Tianzhu.

 

Chilean Chemical and Mining Company (NYSE: SQM)

 

Outside of Chile's base, SQM is advancing projects in other countries. In their current activities, SQM and its partner Kidman Resources are promoting a new lithium processing plant in Western Australia. Located in the Kwinana Strategic Industrial Zone south of Perth, SQM and its joint venture partners plan to start production of the refinery in 2021 with an initial annual capacity of 44,000 tons of lithium hydroxide or 37,000 tons of lithium carbonate. The feasibility study for the refinery is expected to be completed later this year.

 

Galaxy Resources Limited (OTC Market: GALXF)

 

Australia's Galaxy Resources recently appointed JPMorgan Chase Australia to evaluate its "strategic options" and did not want to make any unnecessary mistakes in Argentina's SaldeVida lithium and potash projects. In April, the company reported in a newspaper in Australia that the developer had to temporarily suspend trading after it wanted to transfer its stake in large-quality deposits to China or South Korea. SaldeVida is likely to generate annual revenues of approximately $354 million and an annual increase of 25,000 tons of lithium carbonate and 95,000 tons of potassium chloride. The project is expected to conduct a feasibility study later this month.

 

OrocobreLimited (TSX: ORL) (OTC market: OROCF)

 

Another Australian company with significant Argentine interests, Orocobre, may have a very different look in the next decade. The company's recent report announces that current managing director and CEO Richard Seville will leave the company within the next 12 months. Seville has held this position for the past 11 years and has handed over the baton to the company’s next leader, who will join the company in the second phase of its expansion of the Olaroz lithium project in Argentina and plans to develop a lithium hydroxide plant. Sevilla will continue to deal with the company's relationship with Toyota Tsushu, which owns 25% of the company.

 

NemaskaLithium (over the counter transaction code: NMKEF) (TSX: NMX)

 

Since the company signed a $150 million streaming agreement with OrionMineFinanceIILP, Money appears to have flown into the fund pool of NemaskaLithium throughout April. By announcing, Nemaska outlined an integral part of its $775-$25.25 million financing structure to fund the construction, commissioning, working capital and reserve funds of its Whabouchi Lithium Mine and Shawinigan Electrochemical Plant. The company also signed another major financing agreement with Japan's multinational conglomerate SoftBank Group Corp., which holds 9.9% of the company's shares with total revenue of $90.08 million. Nemaska also launched a $300 million to $350 million bond issue, which is five years as the company moves toward a larger version.

 

QMCQuantumMineralsCorp.(TSX.V:QMC) (OTC code: QMCQF)

 

QMC Quantum Mining has a 100% owned Ilgong lithium mine project, perhaps following Nemaska's lithium production competition in Canada. Located in the prolific Cat Lake-Winnipeg pegmatite field in southeastern Manitoba, the QMC flagship project's prolificacy has been known since the 1950s. However, with modern modeling and analysis capabilities, the potential of QMC's Irgon project is now higher than ever. With the latest release of 3D models and historical analysis, it seems that QMC is sitting on a huge thing - 7.3% of Li2O content is 2.3%, non-NI43-101 standard content is 1.2 million tons, and lithium content is 1.51%.

 

Will IRGON be the next big lithium mine?

 

QMCQuantumMineralsCorp. (TSX.V:QMC) (OTC: QMCQF) seems to be quietly and steadily rising in Manitoba as its compatriots strengthen their funds and activities in Quebec. The Vancouver-based company seems to have discovered the forgotten treasure of IrgonDike, which when it was discovered is hardly as good as the lithium battery market today.

 

The QMC project was originally developed by Lithium Canada, which already has a large amount of data. However, it has finally got the attention it deserves. During the channel sampling of the IrgonDike by the LCOC in 1962, the formation was exposed after being exposed to the ground in a 200-foot cross-section.

 

After applying modern analysis, the project's potential far exceeds the credibility of more than 60 years ago. Now, three-dimensional modeling shows that, to date, exploration and underground development have only been carried out in the upper and middle sections of the dike, leaving a huge potential for rapid increase in tonnage.

 

The Irgon embankment is open along the strike and depth. As a result, the company is confident that it will not only be able to incorporate 1.2 million tons of unqualified historical resources (1.51% Li2O) into compliance, but it can also significantly expand this number. The historical metallurgical test reported a recovery of 87%, from which Li2O with an average concentration of 5.9% was obtained.

 

A complete mining plant was installed on site, processing 500 tons of ore per day, and the wells of the three wells sank to a depth of 74 meters. In 1957, the work was suspended and the lithium oxide market was more favorable. At the current price, the wait is over and Irgon's restart time has finally arrived.

 

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