NetworkNewsWire
Editorial Coverage: A recent report released by the U.S.
government has identified as many as 23 minerals that are “critical
to the national economy and national security” of the nation.
Immediately following the report, President Donald Trump signed an
executive
order to urgently reduce foreign dependence on these minerals
and ramp up domestic production. One critical metal of heavy
emphasis on the list is lithium, which the U.S. is currently
importing 50% from
abroad. This presents an unprecedented opportunity for a
country that has so much undeveloped lithium reserves but
previously chose to mostly bypass domestic mining in favor of
imports. This executive order now changes everything, and with the
global demand for lithium used in electric car batteries rising at
an unstoppable pace, the global lithium supply landscape is set for
a shakeup. Companies poised to lead in the supply of lithium
include Standard Lithium Ltd. (TSX.V: SLL) (FRA: S5L)
(OTCQX: STLHF) (STLHF
Profile), Liberty One Lithium
Corp. (TSX.V: LBY) (OTCQB: LRTTF) (FRANKFURT: L1T),
Albemarle Corporation (NYSE: ALB), Lithium
X Energy Corp. (TSX.V: LIX) (OTC: LIXXF) and
Nemaska Lithium Inc. (TSX: NMX) (OTCQX: NMKEF) (FRANKFURT:
N0T).
The world is moving fast towards “electrification” of the auto
industry to reduce global emissions and pollution. For this,
lithium has become a hot commodity for its role as a key ingredient
in electric vehicle batteries. The global EV revolution, first
started by Tesla, is now getting bigger and more influential than
ever. Carmakers like General Motors and Volvo have pledged to end
production of gas-powered vehicles altogether in the future
(http://nnw.fm/HuFx7). Volkswagen is even
willing to thrust $40 billion
into EV development by 2022, just to name a few.
This means lithium is going to keep its status as an in-demand
critical commodity for a while. According to data from Global
Market Insights, Inc., the worldwide market for Li-ion batteries
alone is set to exceed USD $60 billion by the year 2024 (http://nnw.fm/Y84e0). It is estimated that one lithium
mine needs to be brought on line each year through 2025 to meet its
fast-growing demand. With Trump’s new executive order in effect,
the next lithium mine could well be in the U.S.
While U.S. Geological Survey (USGS) data reveal that continuing
exploration has increased global lithium resources worldwide
(http://nnw.fm/CRs1v), lithium producers will
have their hands full in meeting rampant demand. Lithium companies
like Standard
Lithium Ltd. (TSX.V: SLL) (FRA: S5L) (OTCQX: STLHF)
are wasting no time to get operations in order to potentially cash
in on this EV-driven lithium boom and embrace the U.S. government’s
new policy to expand lithium production.
Based in Vancouver, B.C., Standard Lithium stands out as a
premier lithium developer focused on the production of high-quality
lithium at a low cost. The company is engaged in unlocking the
value of large-scale lithium brine resources that are already in
existence in the United States and can be quickly brought into
production.
Standard Lithium’s approach is based on its stance that new
lithium production can be rapidly brought on stream through
minimizing project and process risks and through leveraging
advances in lithium extraction technologies and processes.
Exploration and Development
Standard Lithium recently announced the expansion of the lithium
brine project at its Bristol Dry Lake property in California’s
Mojave Desert, where six new evaporation ponds have been installed
(http://nnw.fm/9LBwK). The company is taking
advantage of record-high evaporation rates in this region to
pre-concentrate brines produced from the project, which will then
be shipped to its testing and processing facilities at three North
American campuses.
Standard Lithium is also in the midst of drilling work at its
Bristol Dry Lake property and has completed four exploration
boreholes, with two more planned. Preliminary results have equaled
and exceeded historic data, and full QA and QC results are
scheduled to be released during the first half of 2018.
The Bristol Dry Lake project encompasses an area spanning more
than 33,000 acres, including both patented and placer mineral
claims and private property. Geophysical data that was recently
acquired indicates the basin is deep and expansive, and historical
drill samples have shown lithium contents of more than 100mg/l over
the drilled interval. Bristol Dry Lake is an established mining
area with world-class infrastructure at the project as well as
paved road and rail access and water and electricity.
Standard Lithium has forged agreements with National Chloride
Corporation of America and TETRA Technologies (NYSE: TTI), two of
the established brine producers in this region, to explore and
develop the area for potential lithium production. Under the
agreements, the company can conduct exploration, brine sampling,
extraction, evaporation and process testing.
In order to advance the project, Standard Lithium has amassed a
strong team of scientists and process engineers who are applying a
hybrid approach that utilizes both conventional and modern
extraction processes.
The company has additionally entered into an agreement to
explore highly promising brines covering an area of about 30,000
acres in the Smackover Formation, which extends across Texas,
Arkansas and Louisiana. This presents a low-risk investment with
promising potential returns in a region with well-understood
geology that further has a lengthy history of brine production and
infrastructure for profitable mineral extraction. In historical
analysis of the Arkansas Smackover Formation, a lithium content of
365mg/l was shown.
Potential Industry Comparables
Another Canada-based player looking to help meet the growing
global lithium demand is Liberty One Lithium Corp. (TSX.V:
LBY) (OTCQB: LRTTF) (FRANKFURT: L1T). Headquartered in
Vancouver, B.C., Liberty One currently has plans underway to
examine a short list of prospective lithium properties in Latin
American and the continental U.S. during Q1 of 2018. The company
also recently announced plans to commence an evaluation of its
North Paradox property during 2018. Liberty One’s North Paradox
property consists of 233 placer claims encompassing 4,480 acres in
the Paradox Basin of Grand County, Utah. Liberty One seeks out
regions that are ideally situated for lithium brine production via
low-cost and well-proven evaporation methods and which are adjacent
to functional infrastructure and an experienced labor force.
One of the biggest producers of lithium raw material in the
world is Albemarle (NYSE: ALB), which is based in
Charlotte, NC, and is a global market leader for lithium compounds.
In Q3 2017, Albemarle logged net sales of $343.6 million for
lithium and advanced materials, representing a year-over-year
increase of 42.9 percent. This is clear evidence of the potential
for lithium producers to profit hugely in the face of increasing
prices and demand.
Growing global interest in lithium’s rising star is also
evidenced in recent acquisition activity. Lithium exploration and
development company Lithium X Energy (TSX.V: LIX) (OTC:
LIXXF) recently entered into a definitive agreement with
Nextview New Energy Lion Hong Kong Limited, through which Nextview
will acquire all of Lithium X’s issued and outstanding common
shares and warrants. Lithium X has two lithium projects in the
prolific “Lithium Triangle” in the Salta province of Argentina and
also has ownership interest in Pure Energy Metals, which is
developing a lithium project in Nevada.
Another Canada-based player that is specifically focused on
serving as a supplier for the lithium battery market is
Nemaska Lithium (TSX: NMX) (OTCQX: NMKEF) (FRANKFURT:
N0T). Nemaska Lithium is developing a key spodumene
lithium hard rock deposit in Quebec, Canada, that is being touted
as one of the most important spodumene lithium hard rock deposits
in the world, both in terms of volume and grade. The spodumene
concentrate that is produced at the company’s Whabouchi mine will
be shipped to Nemaska Lithium’s lithium compounds processing plant,
which is planned to be built in Shawinigan, Quebec. This facility
will transform spodumene concentrate into high-purity lithium
hydroxide and carbonate using the company’s proprietary methods,
for which Nemaska Lithium holds nine issued patents and various
patent applications that are pending in different countries.
The growing value and importance of the lithium market are
clear, and companies like those named are primed for profitability
as EV dominance blazes forward and lithium demand increases to keep
pace. Li-ion manufacturers and end-users of Li-ion batteries,
including car manufacturers, are increasingly motivated to ink
multiyear deals with lithium producers to spur them to greater and
faster investment and production. While the earth’s supply of
lithium is plentiful, processing capacity remains an issue—which
will continue to spell motivation for end users and profit for
lithium producers.
For more information on Standard Lithium, visit Standard Lithium
Ltd. (TSX.V: SLL) (FRA: S5L) (OTCQX: STLHF)
For a more in-depth look into Standard Lithium (TSXV:
SLL) (FRA: S5L) (OTCQX: STLHF) you can view the full
report on Streetsignals.com.
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