Cobre Montana plans to ride lithium wave
Batteries and lithium should be in the news today, with Tesla’s Elon Musk tipped to be making an announcement, expected to be about the company producing a large lithium battery capable of powering a house – which is a step up from Tesla’s initial thrust of powering automobiles.
The battery is tipped to be large enough, and its storage capacity sufficient, to keep all the lights and appliances going in a home. The battery can be re-charged at night when off-peak rates apply (or topped up by wind or solar installations). Press reports put the price of these batteries at $13,000 each.
This will transform lithium demand. And electricity storage is one of the targets for a small Australian company, Cobre Montana (ASX:CXB).
For a company with a market capitalization of A$15 million, it is not short of aspirations, saying it “aims to control the greatest lithium resource base of any company worldwide”. It says it is one of the few to target lithium micas, what it terms “the forgotten resource”. And here is another point: it believes that production from micas will allow development of lithium carbonate with the potential to be competitive with the brine (salt lake) producers. Until now mica had been a worthless waste product but technology developed in Perth has changed all that. CXB has rights to that technology for 26 years.
In a comment released today, Cobre Montana managing director Adrian Griffin had this to say: “The outcome of testing to date is very significant, as it demonstrates that lithium production from mica, previously considered un-commercial, has the potential to change global lithium production dynamics”.
There is also the potential for by-products from the mica processing: potassium sulphate which could be marketed to the fertilizer industry rubidium, caesium, strontium and gallium.
Get our daily investorintel update
As a recent company presentation outlined, hard-rock lithium producers in the 1980s faced fierce competition as South American brine production came on stream with low operating costs. However, Talison Lithium, which produces the world’s highest grade lithium from its Greenbushes mine in Western Australia, still supplies more than 30% of world supplies (and 75% of China’s needs). Apart from Talison, the main hard-rock producers are Sociedad Mineira de Pegmatites in Portugal, Bikita Minerals in Zimbabwe and various Chinese operations.
Cobre has already formed partnerships with other miners to gain access to feedstock. The partners are European Metals (ASX:EMH), which owns the Cinovec tin project in the Czech Republic with a large lithium mica resource (and believed to have the fourth largest lithium resource in the world), and three West Australian players, Pilbara Minerals (ASX:PLS) with its Pilgangoora lithium and tantalum project, Focus Minerals (FML) and Tungsten Mining (TGN). In addition, Cobre Montana has applied for ground neighbouring the Greenbushes mine.
But at the other end is the demand picture, of which Tesla and its planned gigawatt factory are an integral part.
Fortune magazine says the company has been working on grid batteries for many years now and already has hundreds of systems in operation. Bloomberg has reported that 300 homes in California have Tesla batteries fed by solar panels. This will be a much larger market: the state has required that Californian utilities have more than a gigawatt of energy storage systems by 2020, and Fortune believes other states will follow suit.
At the same time, the production costs of lithium-ion batteries are falling; that cost factor has hitherto made them too expensive for home batteries or the grid. Tesla, of course, boasts it will be able to cut one-third off the cost of making these batteries.
It is enough to make any lithium miner’s mouth water.
InvestorIntel is a trusted source of reliable information at the forefront of emerging markets that brings investment opportunities to discerning investors.