AXcess News: The Launch of Electric Cars Is Commercializing Demand for Lithium
March 31 2010 - 11:33AM
Marketwired
Nissan Motor Co. unveiled its new electric car, the Leaf, which
will hit showrooms across the US a month after the GM Volt. Both
cars are powered by lithium batteries, which is spurring demand for
commercialization of mining projects to fill it. Pan American
Lithium Corp. (TSX-V: PL) (PINKSHEETS: PALTF) looks to get in on
the action, having announced that it was extending its option with
Escondidas Internacional S.A. de C.V., a privately held Mexican
corporation, to acquire its lithium and precious metals brine
processing in the Cierro Prieto geothermal brines in Baja
California, Mexico.
The Mexican lithium brine project was originally announced in
December 2009 and not long after that Pan American Lithium entered
into a deal with Korean-based POSCO, the world's fourth-largest
steel producer, to invest up to $5 million pending its own due
diligence of the lithium brine property. That agreement was also
extended to give POSCO more time and based on Pan American
Lithium's move to extend its own deal on the lithium property, it
appears that the deal may be moving forward.
Lithium commercialization has been increasing, though tonnage
prices have dropped from $5,000 per ton to $4,500 due to the
slowdown in demand attributed to the recession. But prices may be
on the rebound and with it, growing demand for lithium mining
projects. Or so says Byron Capital Markets analyst, Dr. Jon Hykawy,
who told AXcess News in a telephone interview Wednesday that the
softening market price appeared poised for a rebound. Hykawy said
that electric car makers' commercialization would most likely lift
lithium prices back into the $5,000 per-ton range and could even
surpass that level, having just returned from an auto show in
Switzerland where Hykawy said many automakers were showcasing
lithium battery technology.
Byron Capital Markets saw growing interest in lithium mining to
warrant the launch of the first Lithium Index, which currently
monitors 15 mining companies based on minimal market cap. Byron
Capital Markets weekly "Electric Metals in the News" noted a report
on Pan American Lithium and demand forecast that indicated "The
current suppliers of lithium in the market place are few and new
participants need the involvement of offtake partners, among other
necessities, to exist as producers successfully." Dr. Hykawy
agreed, saying more partnerships were in the works, calling it a
"consolidation" in the market place.
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