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Editorial Coverage: Without a commodities market for lithium,
investors wanting to get a share of this rapidly growing segment of
the energy industry are wise to keep an eye on lithium producers.
For lithium mining companies like Standard Lithium Ltd.
(TSX.V: SLL) (FRA: S5L) (OTCQX: STLHF) (STLHF
profile), the increased interest in metal
supply from the U.S. place it on watchlists occupied by larger
peers like Liberty One Lithium Corp. (TSX.V: LBY) (OTCQB:
LRTTF) (FRANKFURT: L1T), Nemaska Lithium Inc. (TSX: NMX) (OTCQX:
NMKEF) (FRANKFURT: N0T), eCobalt Solutions (TSX: ECS) (OTCQX:
ECSIF) and Sociedad Quimica y Minera S.A.
(NYSE:SQM).
Lithium Mining Focus Moves to the United
States
The majority of the world’s lithium is produced in mines located
in Chile, Argentina and Australia, but almost all of the lithium
mined there winds up in Asia to be used in manufacturing batteries.
The United States currently has only one active lithium mine,
located at Silver Peak, Nevada, about 200 miles northwest of Las
Vegas, although there are exploratory companies poking around other
locations (http://nnw.fm/1i1IF). Clearly there’s a real need to
develop additional lithium resources and processing methods,
according to Robert Mintak, the CEO and director of Standard Lithium
Ltd. (TSX.V: SLL) (FRA: S5L) (OTCQX: STLHF).
As a junior mining company, Standard Lithium is building one of
the largest portfolios of high quality, domestic U.S. lithium brine
assets. The company just announced its entry into an option
agreement with TETRA Technologies Inc. (NYSE: TTI) to acquire the
rights to conduct exploration, production and lithium extraction
activities on up to 33,000 acres of brine leases located in a
highly productive area of Southern Arkansas’ Smackover
Formation.
“In our search for opportunities of significance, this is one
that could really move the needle,” Mintak said in a January 2018
news release about the agreement (http://nnw.fm/8QUsp). “We believe the Smackover may be
one of the lithium industry’s most promising regions to develop,
given the potential resource size and large-scale brine-handling
infrastructure in the region.”
Global Lithium Demand Rise Being Fueled by Increase in
Electric Vehicle Production
Zion Market Research reports the global lithium-ion battery
market was valued at around $31.17 billion in 2016 and is expected
to generate revenue of $67.70 billion by 2022, growing at a CAGR of
slightly above 13.7 percent between 2017 and 2022 (http://nnw.fm/Xer7W). By 2040, 54 percent of new car
sales and 33 percent of the global car fleet will be electric,
Bloomberg New Energy Finance reports in its 2017 Electric Vehicle
Outlook (http://nnw.fm/WFmt2).
China, the United States and Europe will be the primary drivers,
picking up 60 percent of the global EV market in 2040. It’s
predicted that fossil fuel demand will be displaced by the growing
fleet of electric vehicles, Bloomberg’s report states, estimating
that up to 530 million electric vehicles on the road will mean up
to 8 million fewer barrels of transportation fuel per day will be
needed.
A spike in the market for electric vehicles about two years ago
hasn’t slowed in the months since, and sales may even be heading
for a bigger boost, according to industry experts. Annual global
electric vehicle sales are forecast to hit 24.4 million by 2030 –
an increase of more than thirtyfold, according to a study by
Bloomberg New Energy Finance (http://nnw.fm/s5iCX).
Plans by governments around the world to phase out the
combustion engine mean lithium miners will need to step up
production in order to meet demand, the report states. Cutting CO2
emissions will create a surge for vital minerals like lithium used
in renewable batteries, leading some to believe that lithium could
become “the new oil,” according to Forbes (http://nnw.fm/NgI8Z).
Standard Lithium Advances American Projects in
California
The recently acquired Smackover acreage is not the only project
that Standard Lithium
Ltd. (TSX.V: SLL) (FRA: S5L) (OTCQX: STLHF) is looking to
advance. Standard Lithium also has a significant lithium
exploration project under way in Southern California’s Mojave
Desert. (http://nnw.fm/GgYd7). The Bristol Dry Lake project
encompasses an area spanning more than 35,000 acres, including both
patented and placer mineral claims and private property. Standard
Lithium has forged agreements with 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.
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.
The aim is for Bristol Lake to become the second lithium
producing operation in the U.S. Everything about the project fits
nicely into the company’s criteria, Mintak says, pointing out the
area has seen almost a century of industrial mineral production
from brines. Test results from a new geophysical survey of the
35,000-acre total Bristol Lake site indicate that high
concentrations of lithium-bearing brines are present throughout the
company’s mineral lease agreement claims.
The company announced on Dec. 11, 2017, that it had installed
six new separate evaporation ponds at the property to take
advantage of the region’s record-high evaporation rates. The ponds
will be used to pre-concentrate brines produced from the project.
The pre-concentrated brine will then be shipped to the company’s
testing and processing facilities located at three campuses across
North America (http://nnw.fm/UTc8y).
Standard Lithium, which has established a world-class Scientific
Advisory Council of lithium extraction scientists and process
engineers to be in charge of the testing work, has brought an
enviable amount of extremely valuable experience in the resource
development and processing side of the lithium space. The company's
drive to provide battery-grade lithium materials is buoyed by a
belief in the transformative state of the world's energy
marketplace.
“I’ve been working in the lithium sector for the better part of
the last decade and the team that’s joined me has been working
extensively in the lithium space as well, at the cutting-edge of
new lithium processing technologies,” Mintak said in an October
2017 interview (http://nnw.fm/2YIHj). “We’ve been at the forefront of
applying new technologies and new processing applications to really
look at resources that haven’t been viewed through the right
lens.”
Potential Industry Comparables
Another lithium exploration company eager to tap into this
energy transition is Liberty One Lithium Corp. (TSX.V: LBY)
(OTCQB: LRTTF) (FRANKFURT: L1T), a Canadian mineral
exploration company engaged in the acquisition and development of
high-grade lithium brine deposits. Company CEO Brad Nichol said
plans are under way to examine a short-list of prospective lithium
properties in both Latin America and Utah during the first quarter
of 2018.
“We have had exploration plans for our Utah property in the
works for some time, and our extremely favorable $10MM in working
capital provides us the opportunity to advance those efforts as
well as broadening our reach in search of undiscovered or
undervalued projects in order to deliver on our strategic goals for
measured growth,” Nichol said in a December 2017 news release
(http://nnw.fm/35lXG). “Our desire to build a
global portfolio of lithium holdings is based on our assessment of
supply chain trends that we believe requires positive and decisive
action as the economics of the lithium market continues to
evolve.”
Nemaska Lithium Inc. (TSX: NMX) (OTCQX: NMKEF)
(FRANKFURT: N0T) is an exploration-stage lithium mining
company invested in evaluating lithium properties and processing
spodumene into lithium compounds in Quebec, Canada. The company
supplies lithium hydroxide and lithium carbonate to the lithium
battery industry used in electric vehicles, cell phones, tablets
and other consumer products.
“Our lithium hydroxide compares very favorably to that of our
peers in the industry and is well within the acceptable
specification limits of cathode producers globally,” Bourassa said
in a news release announcing the company produced 2 tons of battery
grade lithium hydroxide solution for a customer (http://nnw.fm/qiO0e). “Following discussions with
multiple cathode makers, I believe ours is one of the best lithium
hydroxide products available today.”
Also headquartered in Canada is eCobalt Solutions (TSX:
ECS) (OTCQX: ECSIF), a company engaged in exploring
mineral properties. Its primary asset is the Idaho Cobalt Project,
which will produce environmentally sound battery-grade cobalt
salts. The company recently announced (http://nnw.fm/P02cj) the shipment of 3 tons of a bulk
mineralized sample of Idaho Cobalt Project resource slated for
pilot level metallurgical testing at the Dundee Sustainable
Technologies’ facilities in Quebec, Canada. The testing will
further confirm the successful removal of arsenic on a pilot level
to less than 1 percent, producing a clean cobalt concentrate, the
company states.
Far from Canada and the United States, Sociedad Quimica
y Minera S.A. (NYSE: SQM) of Chile is a worldwide producer
of lithium, iodine (for X-ray contrast media) and specialty
potassium fertilizers (http://nnw.fm/Xe9Ew). The company extracts these
materials through its high-quality caliche ore and salt brine
deposits. As the world's largest lithium producer, SQM is committed
to the development and sustainability of the lithium industry.
Lithium’s Future
Recent breakthroughs in battery technology are expected to
continue to generate interest in lithium and its potential uses
(http://nnw.fm/Tgs5b). The huge uptake in demand
for electric vehicles and other devices dependent on batteries,
like smartphones and laptops, should only accelerate the world’s
demand for lithium.
For more information on Standard Lithium, visit Standard
Lithium Ltd. (OTCQX: STLHF) (TSX.V: SLL) (FRA:
S5L)
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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