Neometals sends maiden shipment to “lithium giant” Ganfeng
The moment a plot of land successfully exports its first refined material is cause for celebration. It signifies the end of the period in which life becomes an alternating series of drill results, surveys and planning exercises. In a truly impressive time of eighteen months, Neometals Ltd. (ASX:NMT) (“Neometals”) have progressed their Mount Marion lithium project from final investment decision to first shipment, sending a new supply stream of one of the world’s most desirable metals northwards to China. Major lithium producer Jiangxi Ganfeng Lithium Co. have signed a life-of-mine offtake agreement, securing the site for a decade or more.
The Mt Marion lithium project is located approximately 40km south west of Kalgoorlie, Western Australia and is jointly owned by Neometals Ltd (13.8%), Mineral Resources Ltd (43.1%) and one of China’s largest lithium producers Jiangxi Ganfeng Lithium Co., Ltd (43.1%). The group advised today that the first shipment of 15,000 tonnes of lithium concentrates had been loaded onto the MV Pacific Venus at the Port of Kwinana, and last night departed on its journey to the Zhenjiang Port, China where the product will be delivered to Ganfeng. This first shipment follows the successful commissioning and continued ramp up of production from Mt Marion, which is forecast to produce 400,000 tonnes each year at full capacity.
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Neometals and Mineral Resources initially signed a farm-in agreement in October 2009 which saw Neometals retain 100% ownership of the project while Mineral Resources would take full responsibility for construction and processing in return for a 40% share of net profit. In February 2011 this agreement was amended so that Mineral Resources could have direct ownership of a portion of the project, rather than taking 40% of the profit from sales. Ganfeng joined the party in September 2015 when an agreement was executed between Neometals, Mineral Resources and Jiangxi Ganfeng Lithium which resulted in Ganfeng taking a share in the Mt Marion mine, and agreeing to buy everything the mine ever produced.
On the British Geological Survey’s “Risk List”, last released in 2015, Lithium ranked 15th. The biggest producer is currently Australia, with Chile having the greatest reserves. The agreements in place with Ganfeng are not uncommon; the Chinese know that they lack the domestic lithium production necessary to meet their own demand and have been busy securing supplies from around the world. The spodumene mineral from the mine has been processed to produce lithium carbonate that will mainly be used in the production of batteries for hybrid cars. A pre-feasibility study estimated the demand for lithium carbonate in Asian markets to be 17,000tpa, that could be produced from 120,000t of chemical-grade spodumene concentrate, and Mt Marion was developed to tap this very demand.
Lithium carbonate is also used in several other industries such as lubricants, glass, pharmaceuticals, air-conditioning and ceramics. By-products recovered from the mining operations will include potassium feldspars, tantalum and mica. The mine is expected to initially produce 200,000 tpa of lithium oxide (Li2O) at 6% chemical grade spodumene concentrate, 60,000tpa of mica and 30 tpa of tantalite concentrate. The processing plant will include a modular system capable of increasing production in future.
Ganfeng are well-respected giants in the lithium game, and their bets are worthy of attention. Having similar interests in a lithium brine in Argentina, a pegmatite in Ireland and a spodumene down-under, the Chinese continue to drive the lithium supply chain.
Lara has been an analyst for over ten years, starting her career as an equity analyst at Foord Asset Management and more recently as the ... <Read more about Lara Smith>