1

Solvay starts making noise in the rare earths sector with a Hastings MOU

Solvay S.A. (BRU: SOLB | OTCQX: SLVYY) (‘Solvay’) has started making news in the rare earths space. Solvay, a Belgian chemical company, acquired Rhodia in 2011 and with it the rare earth division with plants in France and China. Since Ilham Kadri was appointed the new CEO of Solvay in March, 2019, their only press releases on its rare earth division have been about three patent infringement cases surrounding materials for catalytic converters and their treatment of exhaust gases from internal combustion engines. Then suddenly over September-October of this year, there were 3 news releases that were focused on developments in Solvay’s rare earths division.

On October 11, 2022, Solvay announced the signing of a non-binding offtake memorandum of understanding (MOU) with Hastings Technology Metals Ltd. (ASX: HAS) (‘Hastings’) where Hastings will initially supply Solvay with 2,500 tonnes per year of mixed rare earth concentrate (MREC) from its Western Australian Yangibana Project. The Solvay plant in La Rochelle, France was founded in 1948 and originally was built for the separation of rare earths from monazite. The reported capacity for La Rochelle is 10,000-15,000 tonnes per annum of rare earths concentrate, which if accurate, made it a significant producer in the 1980s and 1990s. This would mean however that the agreement with Hastings alone would not bring the plant back to full capacity, unless Hastings expands production over time or Solvay sources concentrate from other producers.

This new MOU follows Hastings’ recent move to take a significant position in Neo Performance Materials Inc. (TSX: NEO). NEO and Solvay compete vigorously in all aspects of rare earths but as noted above the main area is in the materials for catalytic converters. This move by Solvay with Hastings comes on the heels of Solvay announcing its plans to expand and upgrade its plant in La Rochelle to process rare earths and recycle rare earth magnets. NEO has also announced its plan to put magnet production capabilities in Estonia where it has a rare earth separation facility in Sillamae.

NEO’s plant in Estonia has traditionally received its rare earth concentrate from Russia but given current political circumstances, it begs the question how long can this last? NEO does have an arrangement with Energy Fuels Inc. (NYSE American: UUUU | TSX: EFR) to supply concentrate from Energy’s uranium operation in White Mesa, Utah. This is the only uranium production facility in the USA. Energy Fuels is going to process monazite to produce RE concentrate. To that end, Energy Fuels announced a deal in May of this year to take a position in a heavy minerals deposit in Bahia, Brazil, which contains monazite.

Another announcement from Solvay this October was that it took 100% control of Solvay Special Chem Japan (SSCJ) through its purchase of the remaining 33% from Santoku Corporation. This facility, like La Rochelle, is focused on catalyst and semiconductor industries. Decades ago this plant was processing RE concentrate from China. When China stopped exporting concentrate in the late 1990s Anan Kasei, a Japanese joint venture between Santoku Chemical and Rhodia, stopped the separation of rare earths and bought intermediate products from China again to produce more value-added products. Ilham Kadri, Solvay’s CEO, commented on the transaction saying: “This transaction marks a logical step forward in our global plan to expand our leadership in Rare Earths specialties.”

It will be interesting to watch Solvay and NEO position themselves in the European market which currently only has one metal/alloy producer, Less Common Metals, and one magnet manufacturer, Vacuumschmelze, a German producer. Let the games begin.




Biden Leads the build-out of an EV market critical minerals supply chain outside of China parade

For the past decade it has been China that has massively supported its battery and EV industry resulting in China now being by far the leader in EV production globally; and quite frankly a threat of totally dominating the future global auto industry as it goes electric.

Now, finally, the tide is turning with the Western governments starting to make very significant moves to support the EV and energy storage sectors (including batteries & the electric grid) and its supply chain. Today’s article gives a summary of major western governments’ new policies to support the EV and energy storage supply chain so far in 2022.

USA

As announced last week the DoE awarded US$2.8 billion of grants to accelerate U.S. manufacturing of batteries for electric vehicles and the electric grid. As stated by Energy.Gov.:

“The 20 companies will receive a combined US$2.8 billion to build and expand commercial-scale facilities in 12 states to extract and process lithium, graphite and other battery materials, manufacture components, and demonstrate new approaches, including manufacturing components from recycled materials.”

A key component of the US$2.8 billion in grants is that they will be matched with US$9 billion in recipient funds. Furthermore, the 20 company’s projects are spread across the key areas of the battery supply chain with the key purpose to build a new U.S lithium-ion battery industry.

As shown below some of the winners were lithium companies Albemarle Corporation (NYSE: ALB) and Piedmont Lithium Inc. (Nasdaq: PLL | ASX: PLL), spherical graphite (soon to be a producer) company Syrah Resources Limited (ASX: SYR), nickel junior Talon Metals Corp. (TSX: TLO) and several others.

Location map showing the planned project locations of the DoE project grant recipients

Source: Energy.Gov DoE

Earlier in 2022, the U.S government announced funding in the Inflation Reduction Act of US$369 billion towards clean energy and climate change initiatives.

The Biden Administration is certainly leading the West in supporting the environment and building up a new clean energy industry with factories and jobs in the USA.

Canada

Canada has recognized that it is extremely well positioned to be a supplier of EV metals and components due to its inherent wealth of critical raw material resources. In the 2022 Canadian Budget the government allocated an additional “C$3.8 billion for critical minerals, including those that feed into clean technologies”. Clean Energy Canada stated:

“This new funding will help Canada realize its vision of building an “end-to-end” battery supply chain through which Canada can do it all, from sourcing the materials to building the parts, batteries, and clean cars.”

Specifically, the Canadian government will spend up to C$1.5 billion over seven years, starting in 2023-24, for infrastructure investments that would support the development of the critical minerals supply chain, with a focus on priority deposits. Many very promising Canadian projects, such as Frontier Lithium Inc.’s (TSXV: FL | OTCQX: LITOF) PAK Lithium Project, need roads to be built to help bring their projects to production. Canada has a plan to make this happen, albeit rather slowly.

Australia

The Australian government under Prime Minister Albanese has brought a new focus towards EVs and climate change. As announced last week the “support for critical minerals breakthroughs” policy is designed to accelerate the growth of the critical minerals sector. The announcement stated:

“The Strategy will complement other Government initiatives including the National Battery Strategy and the Electric Vehicle Strategy. The National Reconstruction Fund will include the $1 billion Value Adding in Resources Fund which will work alongside the $2 billion Critical Minerals Facility…….The Government will also allocate $50 million over three years to the Critical Minerals Development Program for competitive grants to support early and mid-stage critical minerals projects, building on the $50 million recently committed to six key projects across Australia.”

The winning “six key projects” are owned by Alpha HPA Limited (ASX: A4N), Cobalt Blue Holdings Limited (ASX: COB), EQ Resources Limited (ASX: EQR), Global Advanced Metals Pty Ltd, Lava Blue Ltd., and Mineral Commodities Ltd. (ASX: MRC).

Europe

Last month the European Commission announced a new policy proposal called the ‘European Critical Raw Materials Act’. The announcement emphasized Europe’s need to secure a safe and secure supply of critical minerals, notably lithium and rare earths. The announcement stated:

Lithium and rare earths will soon be more important than oil and gas. Our demand for rare earths alone will increase fivefold by 2030. […] We must avoid becoming dependent again, as we did with oil and gas. […] We will identify strategic projects all along the supply chain, from extraction to refining, from processing to recycling. And we will build up strategic reserves where supply is at risk. This is why today I am announcing a European Critical Raw Materials Act.”

The European Critical Raw Materials Act is still being developed but it looks like it will follow along similar footsteps as the U.S Inflation Reduction Act, supporting and building local supply chains, but also relying on ally countries. The European Commission stated one objective as:

“To facilitate the roll-out of targeted raw materials projects in the EU, the Commission should be empowered to list Strategic Projects – which would be labelled as of European interest – based on proposals from Member States. These projects could benefit from streamlined procedures and better access to finance.”

An excerpt from the recent 2022 State of the European Union address discussing the need for Europe to source critical raw materials

Source: European Commission

Some possible winners might be rare earths processing company Neo Performance Materials Inc. (TSX: NEO) and European Metals Holdings Limited (ASX: EMH | AIM: EMH | OTCQX: EMHXY). The former owns the only commercial rare earth separations and rare metal processing plant in Europe and the later has a JV 49% ownership of the largest hard rock lithium project in Europe.

Closing remarks

The Western governments have woken up from a decade long slumber and are now finally moving to build key critical raw material, battery, and EV supply chains both locally and with ally countries. Project funding and permitting are key obstacles being addressed as they are the reason why much of USA and Europe have virtually no EV supply chain today.

As we approach COP 27 starting on November 6, the 2022 awakening of the Western governments should lead to one of the biggest investment themes this decade. That is, investing in quality companies that are likely to succeed in supplying the EV and energy storage supply chains as the Western world looks to gain independence from China.

InvestorIntel has been bringing attention to these companies for more than a decade and provides the ideal starting point to research and learn about promising critical raw materials companies. Stay tuned.

Disclosure: The author is long Albemarle Corporation, Piedmont Lithium Inc., Syrah Resources Limited, Frontier Lithium Inc., Cobalt Blue Holdings Limited, European Metals Holdings.

Disclaimer: The editor of this post may or may not be a securities holder of any of the companies mentioned in this column. None of the companies discussed in the above feature have paid for this content. The writer of this article/post/column/opinion is not an investment advisor, and is neither licensed to nor is making any buy or sell recommendations. For more information about this or any other company, please review all public documents to conduct your own due diligence. To access the InvestorIntel.com Disclaimer, click here




ACME Lithium targets the fuel of the new, green economy – lithium

In today’s volatile market, one commodity is performing quite well, the fuel of the new, green economy – lithium. Lithium appears to have the greatest leverage for hard rock mining investors right now, likely due to current sentiment, as well as, its long term supply/demand picture. SIGMA Lithium Corporation (NASDAQ: SGML | TSXV: SGML) is the poster child for lithium explorers having gone from a market cap of next to nothing to roughly US$4 billion in a little over two years. Lithium prices are high enough now that a small amount of drilling can create a valuable resource fairly quickly. Tack on security of supply issues and President Biden’s Inflation Reduction Act and one needs to start looking even closer to home than the current sources of the majority of lithium resources like the Salar’s of Chile, Argentina and Bolivia (the Lithium Triangle) or Brazil (home of SIGMA’s deposit). Even Australia’s large hard rock reserves aren’t exactly convenient for the burgeoning North American EV market.

It’s time to find a legitimate, home grown solution if there is any hope of economically meeting the growth projections for lithium demand. Fortunately, there is no shortage of North American explorers out there trying to fill this need and perhaps ACME Lithium Inc. (CSE: ACME | OTCQX: ACLHF) could fit the bill. Led by an experienced team, ACME Lithium is a mineral exploration company focused on acquiring, exploring, and developing battery metal projects in partnership with leading technology and commodity companies. The Company has multiple North American projects in areas known for lithium development and exploration. Two are found in a highly prospective region for lithium production in Clayton Valley and Fish Lake Valley, Esmeralda County, Nevada, USA, and another three are in the pegmatite fields of the Bird River Greenstone Belt in southeastern Manitoba, Canada.

Today we’ll have a quick look at the two most advanced projects for ACME – Clayton Valley and Fish Lake Valley. The Clayton Valley project claims are located directly north of the only lithium brine production operation in North America, Albemarle Corporation’s (NYSE: ALB) Silver Peak Lithium mine, which has been in production since 1966. Clayton Valley has the potential to host lithium brines similar to Silver Peak, where samples analyzed up to 228 ppm lithium and concentrations up to +1,000 ppm have been found to occur within specific horizons of fine sediments. In June 2022, ACME commenced its Phase 1 Drill Program in Clayton Valley where the first drill hole (DH-1) was completed at 1,400 feet depth below ground surface to assess lithology, permeability features, clay, sand and gravel content, and lithium brine potential. Results announced August 17th reported lithium was detected from all brine samples at concentrations ranging between 38 and 130 mg/L with the highest concentrations from samples collected in the deep gravels at 1,350 feet and at 1,400 feet. The results strongly indicate the existence of a bicarbonate rich groundwater quality affinity which is typical in the Clayton Valley lithium brine aquifers.

The Company’s Fish Lake Valley (FLV) Project is located about four miles west-northwest of Australia-based Pioneer Ltd.’s Rhyolite Ridge Project where a 2020 resource of 146.5 million metric tons at 1,600 ppm lithium and 14,200 ppm boron was reported. On October 11th ACME announced it had mobilized a crew and equipment for a geophysical profile across a newly recognized conceptual target for mineralized tuff at the property. Field work is expected to be complete in two weeks, with data collected to test the graben concept and to be used to locate drilling test holes. The FLV geology and geomorphology are interpreted as a possible gravel covered graben while scattered outcrop samples assaying up to 600 ppm lithium and 1,270 ppm boron suggesting a mineral system is present.

It’s still early days for ACME Lithium but they are well funded to pursue their lithium dreams with approximately C$12 million in working capital which includes strategic investor Lithium Royalty Corporation and Waratah Capital Advisors Ltd. After all, we’ve seen what SIGMA was able to convert approximately US$19 million in exploration expenditures into.

Disclaimer: The editor of this post may or may not be a securities holder of any of the companies mentioned in this column. None of the companies discussed in the above feature have paid for this content. The writer of this article/post/column/opinion is not an investment advisor, and is neither licensed to nor is making any buy or sell recommendations. For more information about this or any other company, please review all public documents to conduct your own due diligence. To access the InvestorIntel.com Disclaimer, click here




Troy Boisjoli on the rising demand for battery grade nickel and Murchison Minerals summer drilling results

In this InvestorIntel interview, host Tracy Weslosky talks to Murchison Minerals Ltd.‘s (TSXV: MUR | OTCQB: MURMF) President, CEO, and Director Troy Boisjoli about their Summer Exploration Program which continues to hit high grade Nickel-Copper-Cobalt mineralization at the HPM Project in Quebec. Troy highlights the supply deficit in the nickel market with the demand for battery grade Class 1 nickel expected to increase by 600% by 2040. Touching on how Class 1 nickel has been identified from Murchison nickel sulphide deposits, he discusses how the analysis was done using portable x-ray fluorescence (pXRF) technology at the Barre de Fer Zone on the 100% owned HPM (Haut-Plateau de la Manicouagan) Project, located in Quebec.

To access the full InvestorIntel interview, click here.

Don’t miss other InvestorIntel interviews. Subscribe to the InvestorIntel YouTube channel by clicking here.

About Murchison Minerals Ltd.

Murchison is a Canadian‐based exploration company focused on nickel-copper-cobalt exploration at the 100% – owned HPM Project in Quebec and the exploration and development of the 100% – owned Brabant Lake zinc‐copper‐silver project in north‐central Saskatchewan. The Company also holds an option to earn 100% interest in the Barraute VMS exploration project also located in Quebec, north of Val d’Or. Murchison currently has 218.2 million shares issued and outstanding.

To learn more about Murchison Minerals Ltd., click here.

Disclaimer: Murchison Minerals Ltd. is an advertorial member of InvestorIntel Corp.

This interview, which was produced by InvestorIntel Corp. (IIC) does not contain, nor does it purport to contain, a summary of all the material information concerning the “Company” being interviewed. IIC offers no representations or warranties that any of the information contained in this interview is accurate or complete.

This presentation may contain“forward-looking statements” within the meaning of applicable Canadian securities legislation. Forward-looking statements are based on the opinions and assumptions of the management of the Company as of the date made. They are inherently susceptible to uncertainty and other factors that could cause actual events/results to differ materially from these forward-looking statements. Additional risks and uncertainties, including those that the Company does not know about now or that it currently deems immaterial, may also adversely affect the Company’s business or any investment therein.

Any projections given are principally intended for use as objectives and are not intended, and should not be taken,  as assurances that the projected results will be obtained by the Company. The assumptions used may not prove to be accurate and a potential decline in the Company’s financial condition or results of operations may negatively impact the value of its securities. Prospective investors are urged to review the Company’s profile on Sedar.com and to carry out independent investigations in order to determine their interest in investing in the Company.

If you have any questions surrounding the content of this interview, please contact us at +1 416 792 8228 and/or email us direct at [email protected].




Can Standard Lithium’s DLE technology be the miracle that helps solve the forecast lithium deficits ahead?

The widely forecast lithium deficits this decade and next will need a miracle to solve the problem. Enter ‘Direct Lithium Extraction’ or DLE for short.

DLE is a promising new set of technologies designed to extract lithium from projects that are considered unconventional or have lower lithium concentrations. There are several types of DLE such as lithium bonding (adsorption), ion exchange, and solvent extraction.

Today we look at the latest progress of arguably USA’s leading DLE company, Standard Lithium Ltd.

Standard Lithium Ltd. (TSXV: SLI | NYSE American: SLI) is a lithium development company using Direct Lithium Extraction (“DLE”) at their projects in the USA. The lithium extraction projects are:

  • Southern Arkansas Projects (flagship) – LANXESS JV Project and the SOUTHWEST ARKANSAS Project.
  • Mojave Project – Located at the Bristol Dry Lake in the Mojave Dessert, California.

Standard Lithium uses their propriety ‘LiSTR’ DLE process and typically partners with existing projects where they already have a brine product, such as at the LANXESS Project (where Lanxess already produces bromine from brine, but not lithium). Standard Lithium simply ‘bolts’ on their DLE technology to extract the lithium and achieve a high purity lithium chloride solution that can then be converted into battery grade lithium carbonate or hydroxide.

Standard Lithium state that they have the “most advanced direct lithium extraction technology industrial scale precommercial demonstration plant in installed at the project. Over 5,000 hours of operation.”

Standard Lithium ‘LiSTR’ DLE technology can be used to bolt onto existing bromine or brine operations to extract the unused lithium

Source: Standard Lithium company presentation

As announced on September 7, 2022 Standard Lithium is now proceeding with a Front End Engineering Design (“FEED”) Study and a Definitive Feasibility Study (“DFS”) for the first commercial plant, at their LANXESS Project. This progress by Standard Lithium is as a result of their successful demonstration plant validating their technology.

Standard Lithium states:

This project contemplates processing the brine that is currently being handled by Lanxess at its South Facility, where the Company’s continuously operating pre-commercial Direct Lithium Extraction (DLE) Demonstration Plant is located. The existing brine flow at this location is approximately 3,000 US gallons per minute (usgpm), and using the design criteria of 90% lithium recovery during the DLE process, results in expected annual production of between 5,000 to 6,000 tonnes per annum (TPA) of battery quality lithium carbonate. This first project at Lanxess South, designated as Phase 1A, forms part of a staged development of commercial lithium projects contemplated by Standard Lithium:

  • Phase 1A Existing brine flow at Lanxess South Plant (design 5-6,000 TPA lithium carbonate);
  • Phase 1B Expansion at Lanxess South Plant (expected approximately 5,000 TPA);
  • Phase 2 Lanxess West Plant…..,
  • Phase 3 Lanxess Central Plant……

Added to this Standard Lithium plan to develop their stand alone South West Arkansas Project (~30,000tpa lithium hydroxide) and others.

The results of the FEED study will be summarized in a NI 43-101 DFS report in H1 2023.

Elon Musk says the lithium refining business (what Standard Lithium is working towards) is a license to print money

In July 2022, at Tesla’s Q2 Earnings Call (transcript here), Elon Musk made his famous comment regarding lithium refiners/processors making great money. He explicitly stated:

“I would like to once again urge entrepreneurs to enter the lithium refining business. The mining is relatively easy. The refining is much harder…….So, it is basically like minting money right now. There is like software margins in lithium processing right now. So, I would really like to encourage, once again, entrepreneurs to enter the lithium refining business. You can’t lose. It’s licensed to print money.”

Source: Yahoo Finance

All of this is great news for Standard Lithium investors and good news for the auto manufacturers desperate to get future lithium supply.

Of course all of the above takes time and does not solve today’s lithium deficit; however, it could be the miracle we need to help solve the increasingly large lithium deficits forecast post-2025.

Standard Lithium trades on a market cap of US$622M.

Disclaimer: The editor of this post may or may not be a securities holder of any of the companies mentioned in this column. None of the companies discussed in the above feature have paid for this content. The writer of this article/post/column/opinion is not an investment advisor, and is neither licensed to nor is making any buy or sell recommendations. For more information about this or any other company, please review all public documents to conduct your own due diligence. To access the InvestorIntel.com Disclaimer, click here




Ucore Steps into the American Rare Earths Processing Ring in Louisiana.

Ucore Rare Metals Inc. (TSXV: UCU | OTCQX: UURAF) just announced a mutual commitment between themselves and the State of Louisiana to establish a rare earth separation facility in the state which Ucore refers to as a Strategic Metals Complex (SMC). This is a change in direction from the earlier management drive to build a facility in Alaska. The government of Alaska had committed to supporting this approach through a bond of US$145 million to develop the Bokan Project for infrastructure and construction costs. This is a significant shift — which, I view as positive.

From their news release, they point to some advantages “Critical markers for success, such as streamlined inbound and outbound freight, ample supply and proximity of chemicals and reagents, attractive energy costs, the robustness of labor pools, room for ramp-up and production expansion and community support, including technical education infrastructure were all part of the size-up.” In addition, they are evaluating several brownfield sites which typically come with infrastructure already in place like power and buildings which would reduce the capital investment.

The Louisiana Economic Development (LED) sent a non-binding Letter of Intent (LOI) to Ucore last week. The LED laid out a 10-year US$9.6 million economic incentive package in consideration for Ucore’s projected investment of US$55 million. There may also be additional incentive’s once a site has been chosen which could bring the total package up to US$11 million from the LED.

According to the LOI, the following were identified:

  • The financial, economic and tax incentive offers described in the LOI are estimates based on the Company’s commitment to and fulfillment of its capital investment, employment and expected payroll schedules for the Louisiana SMC. This includes: (i) a total capital investment by the Company for the Louisiana SMC of at least US$55 million by December 31, 2026; and (ii) new jobs in Louisiana at the Louisiana SMC in the amount of 45 jobs in 2025 with an annual payroll of US$2.4 million rising to 80 jobs in 2034 with an annual payroll of US$5.2 million.
  • Louisiana’s Industrial Tax Exemption Program can offer up to a 10-year tax exemption to the Company. LED estimates that the exemption may result in up to US$6.0 million in tax savings for the Company. The State’s Industrial Tax Exemption Program is administered by and will be subject to a contract to be finalized between the Company and the Louisiana Board of Commerce and Industry and requires approval from Parish and municipal governing bodies as well as the Parish school board.
  • Louisiana’s Quality Jobs Program provides a 4% or 6% payroll rebate on the gross annual payroll for qualifying new jobs for up to 10 years. The program also refunds state sales/use tax paid on construction materials purchased during construction or a 1.5% project facility expense rebate on certain capital expenditures. LED estimates that the value of this program could be up to US$3.6 million for the Company. The Quality Jobs Program is administered by and will be subject to a contract to be finalized between the Company and the Louisiana Board of Commerce and Industry.

Initial plans are to build a plant that will produce 2,000 tonnes per year (TPY) of separated rare earths by the second half of 2024. Plans would be to expand to a world scale production level of 5,000 TPY by 2026. The technology to be used is Ucore’s wholly owned Innovation Metals Inc. Rapid SXTM  technology. This has been piloted for some time now at Kingston Process Metallurgy (KPM) to develop knowledge of the process and design parameters.

This appears to be the first major investment in rare earth separation processes in the USA, although there are others also talking about this including Lynas Rare Earths Ltd. (ASX: LYC) and MP Materials Corp. (NYSE: MP) with grants from the Department of Defense (DoD). MP received US$35 million and Lynas US$120 million. This begs the question of whether or not the DoD will support Ucore with this plan of action. With a current market cap of approximately US$30 million raising the funds through equity financing would be very dilutive to existing shareholders so either the DoD assists or Ucore gains a strategic partner or a combination of these two will allow the financing of the SMC.

I am sure more news will be forthcoming as engineering and construction will likely need to start by mid-2023 to achieve the stated target of production in 2024-H2.

Disclaimer: The editor of this post may or may not be a securities holder of any of the companies mentioned in this column. None of the companies discussed in the above feature have paid for this content. The writer of this article/post/column/opinion is not an investment advisor, and is neither licensed to nor is making any buy or sell recommendations. For more information about this or any other company, please review all public documents to conduct your own due diligence. To access the InvestorIntel.com Disclaimer, click here




A look at the lithium market leaders as EV manufacturers face generational challenge to keep factories running

Investors are starting to realize the lithium boom is likely to last the next 1-2 decades. EV manufacturers are now facing a generational challenge to secure enough lithium supply to keep their factories running.

In 2021, the IEA forecast that the world will need 13-42x more lithium by 2040 (from 2020 levels). The 13x increase was based on the stated policies track (as of 2021) and the 42x increase was based on the sustainable development scenario (we move rapidly towards a world of zero emissions). Just this past week Benchmark Mineral Intelligence forecast: “Lithium has to scale twenty times by 2050 as automakers face generational challenge”. This was based on 2021 levels. Our exclusive research at Trend Investing forecast a 35x increase in lithium demand from 2020 to 2037.

As of October 2022, the best positioned EV manufacturers are Tesla & BYD Co, and perhaps Ford & GM. These companies have made good preparations including multiple lithium off-take agreements and investments in the lithium companies or projects. Examples are Ford’s July 2022 off-take and A$300 million debt facility agreement with Australian lithium junior Liontown Resources Limited (ASX: LTR), and the August 2022 GM off-take and US$198 million pre-payment deal with Livent. Both these recent deals show the new reality of what it takes to secure future lithium supplies.

Tesla Model 3 – A global leader in electric car sales the past 5 years

Who are the lithium leaders?

The lithium leaders are those lithium companies that are currently the leading producers and who have potential to significantly ramp their lithium production this decade.

Sociedad Quimica y Minera S.A. (NYSE: SQM) – A Chile company with a 51% share of the world’s best lithium brine mine at the Atacama Salar in Chile. They also own 50% share of the Mt Holland spodumene project (with Wesfarmers) set to begin production in Q4, 2023. SQM is targeting lithium carbonate equivalent (“LCE”) sales in 2022 of 150,000t, 210,000t in 2023, and 240,000t in 2024.

Albemarle Corporation (NYSE: ALB) – An American company often seen as the lithium leader. They own 49% of the Atacama Mine (with SQM JV) and 49% of the world’s best spodumene mine Greenbushes in Australia. They also have a 50% JV ownership (with Mineral Resources) of the massive Wodgina Mine in Western Australia, which recently began producing again with plans for a large ramp ahead. The JV also has a recently completed hydroxide conversion plant (60% ALB; 40% MIN) in Kemerton, WA. Albemarle’s production is targeted to increase from ~130,000t LCE in 2022 to ~220,000t LCE in 2025.

Ganfeng Lithium Group Co., Ltd. (SHE: 002460 | HK: 1772 | OTC: GNENF) – A Chinese lithium company focused on lithium refining, however now has multiple projects around the world including 49% of Mt Marion in WA and a 50% JV with Lithium Americas at the massive Cauchari-Olaroz project in Argentina due to start production soon. Ganfeng aims to boost production from ~90,000t in 2022 to 200,000tpa by 2025.

The other leaders with large projects include Pilbara Minerals Limited (ASX: PLS) with their massive Pilgangoora Mine in Western Australia (~90,000tpa in 2022/23), Mineral Resources Limited (ASX: MIN), Tianqi Lithium Corporation, Livent Corporation (NYSE: LTHM) and Allkem Limited (ASX: AKE | TSX: AKE).

Together the names above represent the biggest eight lithium producers and they produce most of the world’s lithium today.

Some others such as AMG Advanced Metallurgical Group NV and a few smaller Chinese producers make up the balance of global lithium production.

The next or near term producers set to come online include (in rough order) Argosy Minerals Limited (ASX: AGY), Lithium Americas Corp. (NYSE: LAC | TSX: LAC), Core Lithium Ltd (ASX: CXO), – SIGMA Lithium Corporation (NASDAQ: SGML | TSXV: SGML), Sayona Mining Limited (ASX: SYA | OTCQB: SYAXF)/Piedmont Lithium (Nasdaq: PLL | ASX: PLL) (NAL Project in Canada), and Liontown Resources Limited (ASX: LTR).

There are also a bunch of other very promising lithium junior miners with potential to become new lithium producers after 2025. Three of the biggest projects could be in Canada with Critical Elements Lithium Corporation (TSXV: CRE | OTCQX: CRECF), Patriot Battery Metals Inc. (TSXV: PMET | OTCQB: PMETF) and Frontier Lithium Inc. (TSXV: FL | OTCQX: LITOF).

Closing remarks

It may seem like there is a lot of lithium supply coming online in the next few years, but of course demand is rising faster than supply, assuming EV sales growth continues at a 50%+ growth rate as expected.

Could there be some periods of short term oversupply? Yes, but only likely if EV sales falter. Either way the decade or two ahead looks set to be a very exciting time for lithium investors and the lithium leaders discussed in this article.

Disclosure: The author is long Tesla, BYD Co and most of the lithium stocks mentioned in the article.

Disclaimer: The editor of this post may or may not be a securities holder of any of the companies mentioned in this column. None of the companies discussed in the above feature have paid for this content. The writer of this article/post/column/opinion is not an investment advisor, and is neither licensed to nor is making any buy or sell recommendations. For more information about this or any other company, please review all public documents to conduct your own due diligence. To access the InvestorIntel.com Disclaimer, click here




Critical mineral Vanadium finds new interest in grid energy storage battery applications

Vanadium (V) is a critical mineral element named after the Scandinavian goddess of beauty and fertility Vanadis. It is the 20th most abundant element in the earth’s crust. Global production in 2020, according to Statista, was about 105,000 tonnes. China accounted for 70,000 tonnes or two-thirds of global production. Russia was next at just over 19,500 tonnes, followed by South Africa at 8,584, and Brazil at 7,582. India produced 100 tonnes and the USA 17 tonnes. Vanadium occurs in magnetite and in China and Russia it is produced from steel smelter slag. Other sources are bauxite, crude oil, coal and tar sands, or as a byproduct of uranium mining.

About 85% of all vanadium is used as an alloy for steel to improve its strength and wear resistance, particularly in tool steel where the amount of vanadium used ranges from 1% to 5%. A few years ago China passed requirements for rebar to use vanadium but the advent of COVID and the current malaise of the Chinese construction/real estate business has not seen the potential increase in demand that the industry widely expected. Vanadium is also used in titanium/aluminum alloys in jet engines and dental implants. Recently there has been renewed interest in the large potential capacity of the vanadium redox battery, also known as the vanadium flow battery (VFB), for grid energy storage. An advantage of vanadium flow batteries is they have no limit on energy capacity and long charge/discharge cycle lives of between 15,000-20,000 cycles making them useful for power plants and electrical grids. Also, Lithium vanadium oxide has been explored for a high-density anode.

Earlier this year the Ferrovanadium price in Europe was $62.8/kg but recently has fallen to about half at $31/kg. In late 2018 and early 2005 Ferrovanadium prices spiked over $120/kg but these were short lived peaks. It has short periods where producers can make significant profits.

There are two producers of vanadium outside China and Russia that are of particular interest. The first is Largo Inc. (TSX: LGO | NASDAQ: LGO), which listed on the Nasdaq last year. Largo is a Toronto based company with operations in Brazil from one of the world’s highest grade vanadium deposits. Largo reported revenues in Q2 of this year at $84.8 million, which was due to the spike in vanadium prices. Volume sold was 3,291 of V2O5 equivalents while production of V2O5 was 3,084 tonnes. Expected production for the full year is estimated at 11-12,000 tonnes of V2O5. Their cash operating cost is reported at $4.10-4.50/lb. V2O5 ($9.03-9.92/kg). Recent pricing inside China is shown to be $16.80/kg, so Largo is in a good position relative to the market. In addition, Largo is investigating diversification in 2022-23 in an ilmenite concentration plant with a nameplate of 150,000 TPY. This will feed a titanium oxide (TiO2) pigment at a rate of 30,000 TPY beginning in 2024. This is a very small operation compared to the size of the TiO2 industry, but this will diversify their product line and possibly soften the impact of the swings in vanadium pricing.

Another part of Largo’s business is Clean Energy Storage. They boast a “unique, vertically integrated business model” to “supply some of the world’s most advanced vanadium redox flow battery solutions for the integration of renewable energy.” By supplying their own vanadium Largo can lower the upfront cost to its customers. To that end Largo signed a non-binding MOU with Ansaldo Green Tech to negotiate the formation of a Joint Venture for making and deployment of Vanadium Redox Flow Batteries in the European, African and Middle East markets. In their latest press release Largo announced it had completed its qualifying transaction for Largo Physical Vanadium Corp. (TSXV: LPV). According to Largo’s President and CEO Paulo Misk, “this listing will allow investors direct exposure to vanadium.”

Another vanadium company is Bushveld Minerals Limited (LSE: BMN), a South African company, which owns 2 of the 4 world’s operating primary vanadium processing facilities. Last year they produced just under 3,600 metric tonnes of vanadium. Bushveld has announced they plan to grow production by 40-50% this year, and subject to funding and market conditions they would increase their output to 8,000 TPY.

It is also worth mentioning that Glencore International AG, one of the world’s largest global diversified natural resource companies, is also in the V2O5 market with production around 6,900 tonnes in 2021.

Vanadium is an interesting element, though the pricing swings make it challenging to plan budgets and investments, but the use in vanadium redox flow batteries has given a new growth market for the industry.

Disclaimer: The editor of this post may or may not be a securities holder of any of the companies mentioned in this column. None of the companies discussed in the above feature have paid for this content. The writer of this article/post/column/opinion is not an investment advisor, and is neither licensed to nor is making any buy or sell recommendations. For more information about this or any other company, please review all public documents to conduct your own due diligence. To access the InvestorIntel.com Disclaimer, click here




With plans to become a significant producer of the magnet rare earths, Defense Metals deserves a deeper dive

The Wicheeda Project plans to produce 25,000tpa of REO which represents ~10% of the current global production

Magnet rare earths demand is forecast to surge this decade. This is because an electric vehicle (“EV”) uses 1kg to 3kg of neodymiumironboron (“NdFeB”) magnets in standard drivetrain electric motors. NdFeB magnets are in 93% of all EVs. Global demand for EVs is expected to grow from 6.75 million in 2021 to over 70 million by (or before) 2040. This will require huge amounts of neodymium.

Every ten million new EVs require ~10,000 tonnes of additional neodymium or ~20% of the current annual global supply

Source: Company presentation

The key problem for the EV industry is where will the new magnet rare earths supply come from and can the West become independent from Chinese supply. Today’s company is working towards a solution.

Defense Metals Corp. (TSXV: DEFN | OTCQB: DFMTF | Frankfurt: 35D) (‘Defense Metals’) plans to become a significant producer of the magnet rare earths neodymium and praseodymium from their 100% owned Wicheeda Rare Earth Element Project spread over 4,244 hectares and located 80 km northeast of Prince George, British Columbia, Canada.

Brought to my attention a few dozen times over the last 2-years, I am fond of Dr William Bird, Director – who is deemed a leader in understanding rare earths in our sector; and likewise, President & Director Luisa Moreno who has at least 10,000 professional hours in this sector by now I suspect. With a PhD in Materials Science and Mechanics, this is the theme we are stressing at the Critical Minerals Summit on Wednesday, November 9th and that is the scarcity of talented professionals with both the experience and education to tackle the formidable task of creating a decarbonized economy.

The Project has an Indicated Mineral Resource of 5 million tonnes averaging 2.95% LREO (“Light Rare Earth Oxide”), and an Inferred Mineral Resource of 29.5 million tonnes averaging 1.83% LREO. Key rare earths contained include neodymium (Nd) and praseodymium (Pd), as well as cerium (Ce) and lanthanum (La). The Resource is amenable to an open pit project and contains a mix of monazite and bastnaesite ore.

Some of the best drill results to date at the Wicheeda Rare Earth Element Project include:

Strong PEA result with a NPV8% of C$517 million

The Wicheeda Project PEA (Jan. 2022) resulted in a posttax NPV8% of C$517 million and a post-tax IRR of 18%, using a price assumption of US$100/kg NdPr. Initial CapEx is estimated at C$440 million.

Once in production Defense Metals targets to produce 25,423tpa of REO over a 16 year mine life, which would make the company a globally significant rare earths producer with ~10% of the current global production.

The Wicheeda Project plans to produce ~25,000tpa of REO which represents ~10% of the current global production

Source: Company presentation

The Wicheeda Project is accessible by a major forestry road that connects to a highway, with the town of Prince George 80kms away. Power lines and a gas pipeline are <40kms away and a major rail line is nearby.

Next steps for Defense Metals include a PFS to be completed in H1 2023, a pilot plant in 2024, and a FS completed in 2025.

The Wicheeda Project location map and key points showing adequate road access and reasonable local infrastructure including access to power and gas <40kms away

Source: Company presentation

Given the size and quality of the resource, safe location in Canada (with forestry road access, power & gas not too far away) and strong fundamentals supporting key magnet rare earths demand this decade; most investors would agree Defense Metals is worthy of a deeper look. Defense Metals current market cap is C$44 million.




Chris Thompson of eResearch talks about his Search Minerals “Holy Grail” rare earths research report

In this InvestorIntel interview, host Tracy Weslosky talks to eResearch Corporation’s President & Director of Research, Chris Thompson, about his recently released 72-page Initiation Equity Research Report on Search Minerals Inc. (TSXV: SMY | OTCQB: SHCMF).

Talking about the need for a comprehensive report, Chris tells Tracy: “The report on Search Minerals contained a lot of information on the rare earth minerals because a lot of people don’t know a lot about them. So, and since there are 17 different minerals in that grouping, it was like writing a report on 17 different minerals in one report.” He goes on to talk about the importance of rare earths to modern industries like electric vehicles, wireless imaging and solar power: “All these modern technologies rely on one or many of these rare earths and they are critically important because you cannot substitute them, so you cannot take another mineral and substitute them into the product, so you need these minerals and that’s what makes them very important.”

Discussing Search Minerals, Chris continued that “the important thing is that Search Minerals is a Canadian company that’s focusing on developing a project in Labrador, so it’s a homegrown project for the very important rare earths sector and it looks like that may be driving forward to be one of the first operating mines and processors in North America.” With a revised PEA and improved economics, he continues that “I think the important thing about this company and the project is the fact that it is a district scale project, and it can go on for over 20 years, which is important when you’re developing a project of this size.”

To access the full InvestorIntel interview, click here

Don’t miss other InvestorIntel interviews. Subscribe to the InvestorIntel YouTube channel by clicking here.

About Search Minerals Inc.

Led by a proven management team and board of directors, Search is focused on finding and developing Critical Rare Earths Elements (CREE), Zirconium (Zr) and Hafnium (Hf) resources within the emerging Port Hope Simpson – St. Lewis CREE District of South East Labrador. Search controls two deposits (Foxtrot and Deep Fox), two drill ready prospects (Fox Meadow and Silver Fox) and numerous other REE prospects, including Fox Valley, Foxy Lady and Awesome Fox, along a 64 km long belt forming a REE District in Labrador. Search has completed a preliminary economic assessment report for DEEPFOX and FOXTROT. Search is also working on three exploration prospects along the belt which include: FOX MEADOW, SILVER FOX and AWESOME FOX.

Search has continued to optimize our patented Direct Extraction Process technology with the support from the Department of Industry, Energy ad Technology, Government of Newfoundland and Labrador, and from the Atlantic Canada Opportunity Agency. We have completed two pilot plant operations and produced highly purified mixed rare earth carbonate concentrate and mixed REO concentrate for separation and refining. We also recognize the continued support by the Government of Newfoundland and Labrador for its Junior Exploration Program.

Search Minerals was selected to participate in the Government of Canada Accelerated Growth Service (“AGS”) initiative, which supports high growth companies. AGS, as a ‘one-stop shop’ model, provides Search with coordinated access to Government of Canada resources as Search continues to move quickly to production and contribute to the establishment of a stable and secure rare earth element North American and European supply chain.

To learn more about Search Minerals Inc., click here

Disclaimer: Search Minerals Inc. is an advertorial member of InvestorIntel Corp.

This interview, which was produced by InvestorIntel Corp., (IIC), does not contain, nor does it purport to contain, a summary of all the material information concerning the “Company” being interviewed. IIC offers no representations or warranties that any of the information contained in this interview is accurate or complete.

This presentation may contain “forward-looking statements” within the meaning of applicable Canadian securities legislation. Forward-looking statements are based on the opinions and assumptions of the management of the Company as of the date made. They are inherently susceptible to uncertainty and other factors that could cause actual events/results to differ materially from these forward-looking statements. Additional risks and uncertainties, including those that the Company does not know about now or that it currently deems immaterial, may also adversely affect the Company’s business or any investment therein.

Any projections given are principally intended for use as objectives and are not intended, and should not be taken, as assurances that the projected results will be obtained by the Company. The assumptions used may not prove to be accurate and a potential decline in the Company’s financial condition or results of operations may negatively impact the value of its securities. Prospective investors are urged to review the Company’s profile on Sedar.com and to carry out independent investigations in order to determine their interest in investing in the Company.

If you have any questions surrounding the content of this interview, please contact us at +1 416 792 8228 and/or email us direct at [email protected].