Lithium JV by Pilbara Minerals and South Korean POSCO

Australian lithium producer, Pilbara Minerals Limited has advised that the Company’s Board has conditionally exercised its option to enter into an incorporated joint venture with POSCO for the development of a downstream lithium chemical conversion facility in South Korea.

The plant is to be located in GWANGYANG Free Economic Zone in South Korea with a LCE capacity of 40ktpa. It is to process spodumene from the Pilgangoora Lithium-Tantalum Project.

“We are proud of the relationship we have developed with POSCO over the last year, which has gone from strength to strength as we continue to work through the joint venture development process.” said Ken Brinsden, Pilbara Minerals’ Managing Director

“It has been really pleasing to see the positive results generated by the due diligence work to date. The significant investment by POSCO into their PosLX technology has paid off and they have proven their ability to produce an industry leading, battery-ready lithium product through their innovative lithium purification process.”

“For Pilbara Minerals to have secured a strong and technically capable partner like POSCO is no mean feat and gives us an exciting opportunity to partner with them to enter the battery grade and cathode material product supply market and become a fully vertically integrated global lithium raw materials company.”

“The rapid growth in lithium chemicals consumption in South Korea cannot be underestimated and we believe this partnership positions Pilbara Minerals at the forefront of this emerging market, which is forecast by Benchmark Minerals Intelligence (October 2018) to position Korean battery manufacturers to supply around 25% of worldwide capacity by 2028,” he added.

Lithium – Price volatility to continue into 2019

Prices for lithium hydroxide and lithium carbonate are expected to remain volatile according to Brisbane based lithium producer Orocobre.  According to company management, its operations in Argentina have seen prices for their lithium drop up to 40% over the last 6 months, creating short term difficulty for financing new industrial projects.

“We continue to see and expect volatility in the market,” he said. “The market is changing significantly on the demand side and on the supply side.” 

The same sentiment was shared in December 2018 by Bernstein analyst Paul Gait, who claims that the margins experienced by lithium producers in 2018 were far too high to maintain a sustainable supply chain.

“Despite the price fall … lithium prices still imply astonishingly high returns on any investment in lithium production capacity,” he said.

“Current lithium carbonate prices are in the range of US$10,000-15,000 per tonne depending on the exact price series one selects to look at, but according to our analysis, these prices would still imply IRRs of between 46% and 74% based on our representative list of 20 lithium projects from around the world.”

Gait believes a fair long term price for lithium of $8000/tonne would generate the appropriate level on investment whilst maintaining sufficient demand levels. 

UK Investment firm buys up Aussie Lithium

A number of highly prospective lithium assets across the NT and WA have been purchased by Cadence Minerals, a UK based early investment strategy and development firm. The recent acquisition covers a number of potential high-grade projects namely Alcoota (NT), Picasso (WA) and Lithfield (NT).

The company already has experience in the lithium space, with current projects including Sonora Lithium, Cinovec Lithium as well as San Luis Lithium projects.  The new projects propose significant exploration advantage, with the Picasso development (near Bald Hill Mine) containing a potential 11 million tonnes reserve @ 1.01% lithium. The company is yet to disclose its detailed plans for the mines, however it is thought that development will begin as soon as Q2 2019. 

Could Galaxy Resources be Australia’s best value lithium producer?

Hard rock spodumene producer – Galaxy Resources (ASX: GXY) has started 2019 with a bang, reporting a net profit (after taxes) of US$3.5 million for the half year reporting season (ending December 31 2018). The Perth based spodumene producer also boasted a 60% increase in its total revenue up to $US154 million.

The profit numbers exclude the final payments made by POSCO for the sale of various tenements in the northern part of Salar del Hombre Muerto for the total price of $US 280 million.

Galaxy sold a total of 159,255 dry metric tonnes of spodumene in FY2018 and realised significantly higher selling prices than FY2017. The company also has no debt as of December 2018 and a net cash position of almost $US 25 million, positioning itself as one of the safest investments across the Australian lithium market.  

Galaxy Resources remains committed to optimizing its current lithium production facilities, hard rock mines, and brine assets in Australia, Canada and Argentina. It wholly owns and operates the James Bay lithium pegmatite project in Quebec, Canada and the Mt Cattlin mine in Ravensthorpe Western Australia, which is currently producing spodumene and tantalum concentrate.

AVZ Minerals Now Fully Funded Raising $9.8M

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AVZ Minerals announced the success of its placement to raise $9.8 million. Combined with the recently implemented Share Purchase Plan this will bring the total proceeds from the new share issues to $15 million.

The Placement was completed at 3.8¢ per share and 257 million new shares will be issued under the Company’s 15% placement capacity.

“This Placement together with the oversubscribed SPP will leave AVZ fully funded to final investment decision. I would like to thank Huayou Cobalt Group for its continued support and also welcome Lithium Plus and a number of new Australian and global institutions to our register. We look forward to working with Huayou Cobalt Group and Lithium Plus in developing the World-Class Manono Lithium and Tin Project.” Said Managing Director, Nigel Ferguson

“The placement comes at an exciting time for participants in the lithium industry as interest in EVs in the world’s largest vehicle market surges. The Company notes that sales of electric cars in China is reported to have increased 188% in January 2019” (source: The Australian Financial Review 23-24 February 2019, “Car Makers Brace for Electric Shock” written by Hans van Leeuwen).

About AVZ Minerals LTD

AVZ Minerals Ltd is a junior mineral exploration company focused on developing the Manono Project located in the south of the Democratic Republic of Congo (DRC) in central Africa. AVZ has a 60 per cent interest in the Manono Project.

The Manono Project is potentially one of the world’s largest lithium-rich LCT (lithium, caesium, tantalum) pegmatite deposits. The Manono pegmatite extends for a strike length of at least 13km and is more than 240m thick in places. The Manono Project includes the historic Manono Mine, a pegmatite deposit mined for its tin content from 1919 to 1982.

The Company also holds a 100 per cent interest in the Manono Extension Project which surrounds the Manono Project.

In addition, AVZ holds a 60 per cent interest in the Katanga Regional Project which comprises seven exploration licences in the Kibaran Belt in southern DRC which are known to host lithium-bearing pegmatites.

AVZ listed on the Australian Securities Exchange (ASX) in 2007 under the code AVZ.

Lithium Australia progressing German Sadisdorf project

By producing lithium from unconventional sources, Lithium Australia has identified a metallurgical process route which may provide security for the European renewable energy industry.

Lithium Australia is of the opinion that, by situating a SiLeach® plant at Sadisdorf to treat locally available micas and converting the lithium chemicals produced to cathode powders. This has been previously demonstrated at pilot scale.