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Lithium - Between A Rock And A Salt Lake

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Before the boom: market research I did on the lithium industry in 2007 before the boom in exploration. Just have a look at the producer/explorer table!! Now there are nearly 100 participants

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Lithium - Between A Rock And A Salt Lake

  1. 1. HEAD TO HEAD Li HARD ROCK Li BRINES Production imminent: The Salar del Rincon is currently being developed for lithium production by Admiralty Resources of Australia. Courtesy Admiralty Resources Between a rock and a salt lake Powered by the battery market, the lithium production ball is gaining momentum. As establish producers expand and new producers start up to meet the ever growing demand, the lithium market now is stronger than ever By Simon Moores, Assistant Editor RUMOUR HAS IT the origins of the Virtually all production from brines Australia popular soft drink, 7-Up was owed to occur in the South American countries Sons of Gwalia one of its main ingredients, lithium. Chile and Argentina with China Australia is dominated by hard rock There was common consensus that the beginning to threaten as it adds yet production from Perth based mining name, Bib-Label Lithiated Lemon-Lime, another mineral to its already packed company, Sons of Gwalia (SOG). just wasn’t snappy enough and was production repertoire. Hard rock SOG is the world leading lithium hard thus changed to 7-Up. The new production continues, particularly in rock producer with 60% of global moniker was believed to be a Western Australia, Canada, Finland, lithium concentrate capacity, mined combination of lithium’s atomic weight and Zimbabwe, with potential new from its Greenbushes operation near (6.94), and its effect as a pick-me-up, operations in Canada and Portugal. Perth, Western Australia. The 2007 popular when the drink was launched It is an interesting time for lithium production figure was confirmed to IM during the US great depression of consumption patterns, a gradual shift as approximately 150,000 tpa. 1929. has been in progress over the past The Greenbushes operation produces Unsurprisingly consumption patterns decade as lithium ion batteries impose spodumene (pyroxene, crystalline), today have changed and lithium an increasingly tight grip on demand. which when pure comprises 8% Li2O. producers now aim to quench the The once secure number one spot SOG produces several grades that can increasing global thirst of a range of owned by the more traditional be tailored to different applications; growing market applications. consumers, ceramics and glass, has delivered in bulk or bags. Although Lithium is mined from hard rock ores been under significant threat from hard rock mining can have large and brines (see panel) to lithium ion batteries powered by rapid operational costs, the keys to success predominately produce lithium growth in mobiles, laptops, digital were highlighted as: a high grade carbonate, the basis for all cameras, and in particular hybrid deposit; good logistics; and a clearly downstream lithium chemicals. In the electric vehicles (HEV) and portable defined need for lithium minerals. second half of the 20th century, brines heavy duty tools. And with life SOG provides a high grade became the dominant source, becoming more hi tech and portable concentrate to glass and ceramic dramatically shifting production from by the year, it is a threat which is not industries. traditional hard rock pegmatite. going away any time soon. SOG has been in administration 58 June 2007
  2. 2. Li HARD ROCK Li BRINES HEAD TO HEAD Lithium derivatives Lithium carbonate (Li2CO3), a fine white powder, is less soluble in hot than cold water. It is not hygroscopic and is generally stable when exposed to the atmosphere. Lithium carbonate reacts easily with strong acids and is frequently used for the manufacture of other lithium salts. Li2CO3 main applications include: Fuel cells; electricity cogeneration. Glass industry; optics, screens, container glasses. Enamels; iron coating. Glass ceramics; telescope mirrors, kitchen glass. Aluminum production. Construction; concrete. Lithium hydroxide may be directly recovered from spodumene or other ores by a high temperature process employing lime. It is a white fine powder that has relatively low solubility in water. Its main applications include: High performance lithium greases; lubricating greases. Lithium chloride is prepared by the reaction of hydrochloric acid with either lithium carbonate or lithium hydroxide. After evaporation and crystallisation, the crystals are isolated and dried to yield anhydrous lithium chloride. It is very hygroscopic and highly soluble in water. In contrast to the other alkali metal chlorides, its solubility in many polar organic liquids, such as alcohols is significant, with its main applications in: Welding fluxes; manufacture of aluminium heat exchangers. Butylithium is an organolithium compound and is the most commonly used as reagent, because of its high reactivity, versatility and low cost. Its applications in preparative industrial chemistry have developed to an important extent. These compounds have become very valuable tools for the production of pharmaceutical and agrochemical intermediates. Its main applications include: Rubber and plastics market, tire industry, pharmaceuticals Source: SQM Between a rock and salt lake Although the two deposits types could not physically be more different, the lithium compounds they produce are effectively the same and can compete for the same market ground. Lithium occurs in brines as solution and rocks as a compound. Hard rock deposits trap lithium in over 145 different minerals, however, the commercial quantities of today are found in only a handful. Hosted by the coarse igneous rock, pegmatite, the following minerals are the principal sources: spodumene, the most abundant source of lithium; petalite; lepidolite; eucryptite; amblygonite; and hectorite. Hard rock miners produce lithium as a concentrate, further processing provides lithium carbonate. The main hard rock deposits are in: Perth, Australia; Bernic Lake, Canada; Masvingo province, Zimbabwe; and the Xinjiang- Uygur province, China. Brines hold lithium in solution either as a brine or salts depending on the degree of solar evaporation. They occur as lakes in some of the most unforgiving deserts in the world (see Chile and Argentina) in conditions of high solar and wind evaporation, and low humidity and precipitation. It is these conditions which have allowed the soluble lithium – from volcanic origins – to naturally concentrate. The dry, impervious basin, coupled with the high evaporation levels create a pretty much close system, where the lithium is the surface, or trapped in underground lakes with a high lithium salt crust capping it. Further concentration is achieved through custom built solar evaporation pools. The main brine deposits are: Salar de Atacama, Chile and Salar de Hombre, Argentina, with Bolivia and China showing promise. since 2004. At present the against the Group by way of a debt for being undertaken to increase that Administrators and Consultative equity exchange under a Scheme of capacity to meet strong market Creditors Committee have been Arrangement. demand. engaged in developing a restructuring Operational restructuring has IM understands that a deal with a proposal for the SOG Group. maximised tantalum production at the private equity firm is currently under According to a Ferrier Hodgson report lower cost Wodgina mine, whereas the evaluation although no further details to creditors in November 2006, the Greenbushes underground and open were forthcoming at the time of press. preferred restructuring option which the cut tantalum mining operations have Administrators have sought to pursue is been placed on care and maintenance. Argentina one which involves all creditors Lithium production at Greenbushes Active production in Argentina comes restructuring their existing claims continues at full capacity with trials from Salar de Hombre Muerto, a June 2007 59
  3. 3. Li HARD ROCK Li BRINES HEAD TO HEAD medium sized brine deposit located The advantage of the Salar de declared the Salar del Rincon a world 240km south-east of Antofagasta, Chile. Hombre Muerto is the relatively small class deposit. The brine lake has a surface area of surface area, so major transport links 565km² at an altitude of 4,300 metres. are closer. FMC The south-east area of the salar is The Salar del Rincon (see title picture, FMC Lithium, part of the group FMC susceptible to partial flooding, owing to p.58) is a major multi-elemental brine Corp, USA, is the sole producer in the the perennial floods from the Catal resource, located in the Salta province Salar de Hombre Muerto, after it Lagoon; the floods recede and leave a of Argentina. It has an elevation of purchased the site in 1995. FMC smooth white salt layer. The remaining ~3,700 metres within the Antofalla- identified this brine deposit as high majority of the salar surface is an Pocitos volcanic rift valley in the high concentration, low in contaminants, and uneven, cracked salt clay surface, Andean Plains. The deposit is estimated was the first to develop and similar to that of the Salar de Atacama. to contain 1,450m. tonnes of commercialise a selective purification To access the brine deposit, a salt cap recoverable brine within a 250km² process. The process extracts lithium has to be breached to ~20cm below closed basin and a maximum depth of chloride from the salar brine in a nearly the surface, where an estimated 60m. pure form with minimal processing. 800,000m. tonnes lithium solution is Recent extensive exploration, FMC’s current production capacity is trapped. geological and chemical analysis has 17,500 tpa. George Sandor, global Lithium producers of the world Company/subsidary Operation location Source type Li mineral Concentration(ppm) Capacity (TPA) Current production Status Admiralty Resources Salar del Rincon, Argentina Brine 200-2,400 17,000 17,000 Development Chemtalle Foote /Sdad Chilena 30000(total 30,000(total with Salar de Atacama, Chile Brine 1,000-7,000 Active de Litio(SCL) with USA) USA) CITIC / CITIC Guoan Lithium Sci. & Tech. Co Taijinaier Salt Lake, Qinghai, Brine *35,000 Pilot * expected output once in full China operation CITIC / CITIC Guoan Lithium Xitai Ginar salt lake, Qinghai, Brine Development Sci. & Tech. Co China FMC/Minera del Altiplano SA. Salar de Hombre, Argentina Brine 190-900 (average 521) 17,500 17,500 Active Rockwood Specialities/ 30,000(total 30,000(total with Silver peak, NV,USA Brine Active Chemtalle Foote with Chile) Chile) SQM SA * expected output following Salar de Atacama, Chile Brine 1500 average *40,000 27,800 Active expansion Sterling Group Ventures/Tibet Dangxiongcuo(DXC) salt lake, Saline Lake Mining High- Brine 300 average 5,000 Development Science & Technology Co. Ltd. Naqu, Tibet Lake Zabayu, Tibet Brine 700-1,000 5,000 Development Salar de Uyuni, Bolivia Brine 80-1,150(average 321) Development Separation Rapids, Ontario, Avalon Ventures Hard rock petalite 5,000 Development Canada spudomene/ Bikita Minerals Ltd Masvingo province, Zimbabwe Hard rock petalite/ 120,000 Active lepidolite spodumene/ Cabot Corp./Tanco Bernic Lake, Ontario, Canada Hard rock 24,000 Active montebrastite CITIC / CITIC Guoan Lithium Gajika Mine, China Hard rock spodumene Pilot Sci. & Tech. Co CongoÉtain Kittolo, DR Congo Hard rock spodumene Active CongoÉtain, DR Congo Manono, DR Congo Hard rock spodumene Active Separation Rapids, Ontario, Gossan Resources Ltd Hard rock petalite Development Canada Keliber Resources Ltd *expected output once in full Länttä, Finland Hard rock spodumene *150,000 150,000 Development operation spodumene/ Sons of Gwalia, Australia Greenbushes mine, Australia Hard rock *150,000 150,000 Active montebrastite Sterling Group Ventures/Micro Jiajika lithium deposit in Hard rock spodumene 5,000 Development Express Ltd Sichuan, China Western Uranium Corp./ Spodumene/H Kings Valley, Nevada, USA Hard rock Prospecting Newco ectorite spudomene/ Covas do Barroso, Portugal Hard rock petalite/ Prospecting lepidolite June 2007 61
  4. 4. HEAD TO HEAD Li HARD ROCK Li BRINES Lithium hard rock and brine deposits of the world marketing manager at FMC, said to meteorological station has been amount of evaporation occurring and IM: “We are looking at developed and is in full operation to aid the power of nature. The residence debottleknecking [in Argentina] and with the planning of the site. The time will be 61 days. evaluating the current market situation.” station provides all the necessary See Exposure, p.99, for a detailed Sandor could not comment on any information to make vital decisions such look at Admiralty’s activity in the Salar expansion plans. as the evaporation pond locations. The del Rincon, Argentina. FMC announced in 2007 its intentions data includes: precipitation, humidity, to invest in the emerging lithium ion wind evaporation levels, and solar Bolivia battery sector in India. Currently the evaporation levels. Salar de Uyuni in south-east Bolivia is Indian energy storage sector is focused It is the first such station in the Andes the world’s largest salt flat with a on the defence industry, but with mobile and one of the highest in altitude in the 10,582 km² surface area, an altitude phone manufacturers starting up, fast world of 3,650 metres, and an average depth growth is expected soon. Sandor made The concentration of the extracted of 121 metres. The surface is more clear to IM, that the investments were brine will be a four stage process. The forgiving than Chile and Argentina with very small in FMC’s lithium scope. first evaporation pond will contain a smooth, hard and flat surface. The 10,000m3 of brine and will evaporate concentration of the brine ranges from Admiralty Resources 43% of the water content, crystallising 80-1,150ppm, averaging 321ppm. It is The Salar del Rincon is being developed 2,600 tonnes of salts. The residence estimated to contain 13km3 of brine by Admiralty Resources NL, Australia, time will be 175 days. with 5.5m. tonnes of lithium. for imminent production of lithium. The second evaporation pond will It is yet to be developed for lithium. Admiralty aims for 17,000 tpa with repeat the process. conceptual construction plans being When the concentrated brine reaches Chile complete. the third pond it will have the correct Chile’s world leading production comes Admiralty is seeking $65m. in project ionic strength to further separate from the Salar de Atacama in northern funding and an additional $40-50m. compounds such as potassium chloride. Chile, the third largest playa in the from selling a 10% stake in the The surface area of the third pond will world. The salt deposit is 360-400 company. Major tasks yet to be be 30% the size of the first and will have metres deep, diminishing to 40 metres complete include: the electrical design a residence time of 91 days. at the edge; it has a surface area of of the plant, carbonate purification The fourth and final pond will serve to ~3,000km² at an elevation of 2,300 plant, environmental permits, and concentrate the brine to yield a clear metres. There is an estimated 277m. construction permits. lithium enriched product that will feed tonnes of proven and probable reserves Admiralty has scheduled to start 50% the lithium purification plant. The in the salar. production in September 2007, with full surface area of this pond is 0.008% of Early exploration in 1975 highlighted production in March 2008. the first evaporation pond, a dramatic the initial problems with brine deposits, The current situation: a decrease serving as a reminder of the the locations were so remote that much 62 June 2007
  5. 5. Li HARD ROCK Li BRINES HEAD TO HEAD of the geochemical work was done by Chemtall said to IM: “We are currently The foreseeable future looks secure helicopter with the surface of the salar expanding our Chile facility where the for Chemetall at the Salar de Atacama, inaccessible owing to extensive extension will be on-stream 2008/9, it Boes said: “In the Atacama there is polygonal cracking. The demanding will be up to a 20% increase in enough raw material available.” conditions are highlighted by the fact capacity.” Boes told IM: “ The success of that the Atacama is by far the driest “Nevada is our secondary plant which alternative brine deposits relies on: place on the planet, receiving is smaller than Chile and we have no concentration and composition of the ~10mm/rainfall a year and over expansion plans there.” He said. The brine, area of operation and technology 3,000mm/evaporation a year. Silver Peak facility is a backup plant to applied. A deposit must be valid for a the Salar de Atacama operation and is long time (preferably over 50 years) for SQM mainly for internal use for further all investments to pay dividends.” Sociedad Quimica y Minera de Chile downstream products. Boes warned: “Chemetall has 40 SA (SQM), Chile, is the largest producer of lithium from brines in the world, operating in the Salar de Atacama. Chile produces ~50% of world’s lithium carbonate, SQM has a 30% market share. It mines the raw material from the salar and process it to the intermediate product, lithium chloride to be converted into lithium carbonate, lithium hydroxide, and butylithium. Currently, SQM is producing 27,800 tpa of lithium carbonate, with rumours to increase production to 40,000 tpa by 2008. It also participates in the lithium hydroxide and lithium chloride markets. Business at SQM appears to be strong and is reflected in its first quarter earnings of 2007. Revenues for lithium and lithium derivatives saw a massive 72.7% increase on the same period in 2006 – revenues increased from $25.8m. to $44.6m. SQM explained: “Higher revenues are explained by a significant increase in volumes and sales prices. The tight supply scenario generated a continuous increase in Hard rock mining at Sons of Gwalia’s Greenbushes mine in Western Australia. Courtesy SOG prices.” (see Prices). SQM also announced in 2007 that it has increased sales to the Asian battery industry and the European glass industry. This years business, however, is likely to be the same as 2006, simply because it is running at capacity and has little room for improvement on the output front. Chemetall Chemetall GmbH of Frankfurt, through its subsidiary Sdad Chilena de Litio (SCL), runs two lithium operations in Antofagasta, Salar de Atacama, Chile, and Silver Peak, Nevada, USA. Chemetall has a combined lithium carbonate output of 30,000 tpa and since 2004 has been owned by Rockwood Holdings Inc, USA. Chemetall is responding to the strong lithium carbonate market at the moment, Wolfgang Boes, global Solar evaporation ponds increases the extracted brine to even higher concentrations. business manager lithium salts at Courtesy SQM June 2007 63
  6. 6. HEAD TO HEAD Li HARD ROCK Li BRINES years experience of extracting brines. Extracting lithium salts without the necessary know-how or experience is a very risky business.” Chemetall supplies the glass, ceramics, secondary battery, building chemicals industries and a large proportion material for downstream applications. Bose said: “Lithium carbonate is the basic product for the whole lithium chemistry. Chemetall produces over 100 products all based on lithium carbonate.” China China is on the verge of significant production from brine resources. Currently its main lithium concentrates production is from hard rock sources in the Altai Mountains, a geologically Sons of Gwalia (SOG), the Australian hard rock mining company produces around 150,000 tpa of active area of south-central China. lithium concentrate. Courtesy SOG Other hard rock lithium mineral production comes from the Henan lithium carbonate and by products Eye on China province, and the Koktokay pegmatite (sodium borate). The production cost of Recent activity in China has producers district of the Xinjiang-Uygur province. lithium carbonate has been estimated at keeping an eye on the competition. The up and coming areas of less than 11,000 RMB Yuan/tonne George Sandor, global marketing significant production for hard rock ($1,356/tonne). manager at FMC, told IM: “China has sources is the Jaijika resource in the Sterling has been very active in China the potential to be a very strong player Sichuan province, and for brines are over the past four years. Besides the along with the current players and can the Quinghai province of west China. projects mentioned, a number of other definitely be a future large participator. lithium deposits were also prospected I would not call it a future hub of Sterling Group Ventures by Sterling – including the hard rock lithium compound production, as South Sterling Group Ventures Inc. of USA sources of the Henan province and the America will continue to participate seized a stake in the Jaijika lithium Dahongliutan spodumene deposit of with significant amounts.” deposit when it acquired Micro Express the Xinjiang province – that were not “With the Chinese production, it Ltd of the British Virgin Islands in persued. depends when the material comes January 2004. Micro Express signed Sterling has not disguised its onstream, and if they can deliver what an agreement with Sichuan Province ambitions “to be a major lithium they quote.” Sandor said. It was also Mining Ltd of China to develop Jaijika, producer in China”. mentioned by Sandor that he expected the largest hard rock lithium deposit in the new production to even out the China. CITIC Lithium current squeeze in supply, which hard Jaijika is a spodumene deposit with CITIC Guoan Lithium Sci. & Tech. Co. rock production is doing to a lesser 1.03m. tonnes of lithium oxide (grading (CITIC Lithium) of Chengdu, China is degree. 1.28%), with a ready-to-mine, proven the largest spodumene and lithium From a hard rock view point, Anand reserve of 0.49m. tonnes. chemicals producer in Asia which aims Sheth, marketing manager at SOG said In September 2005 Sterling signed an to claim the leading position in the to IM: “There has been hard rock agreement through Micro Express with world lithium market. A subsidiary of mining in China for the past decade, Beijing Mianping Salt Lake Research state owned China International Trust the new sources are mainly brines Institute to develop the Dangxiongcuo and Investment Co. (CITIC), CITIC which are in competition with other brine deposit (DXC), in Nima county of Lithium currently owns both hard rock brine sources. To the overall market, Naqu district in Tibet, China. Both have and brine deposits. brine production from China will be a established a new, jointly owned Its Gajika mine is touted by CITIC as: concern. We have been hearing for company, Tibet Saline Lake Mining “the best spodumene mine in the many years the Chinese production High-Science & Technology Co. Ltd (TSL world”, and is estimated to have 1.2m. potential. For the long term this will Mining), to develop DXC salt lake. tonnes of lithium oxide reserves. Its have an impact, but right now I’m not The DXC deposit is a 55.53 km2 salt Maerkang spodumene mine is sure.” lake with an average depth of 7.8 estimated to have 483,000 tonnes of An interesting point was raised to IM metres with a grade of ~2.45-3.06% lithium oxide and is located in Sichuan by Joyce Ober of United States LiCl (0.4-0.5% Li) and reserves: Li, province. Geological Survey (USGS) minerals 373m. lbs; and Li2CO3 262.1m. lbs. It is also actively involved in the division, that when SQM dropped the It is anticipated that total investment exploitation and pilot production in price of lithium carbonate to $0.90/lb, in TSL Mining will be approximately Taijinaier Salt Lake of Qinghai province, production in China stopped in some 240m. RMB Yuan ($30 m.) and will a world-class lithium deposit with places. China is price sensitive, and it result in production of 5,000 tpa of estimated reserves of 3.37m. tonnes. is not expected to suddenly and 64 June 2007
  7. 7. Li HARD ROCK Li BRINES HEAD TO HEAD dramaticaly introduce large volumes been for past several years. Focus has WUC explained that lithium is not into the market place at a low price. been on the lithium province of western core to its plans suggesting that even The common consensus seems that Finland and new deposits have been companies not directly involved in China has great potential, but is not discovered. production are recognising the expected to flood the market at once. potential of lithium minerals. Newco It is more likely to be drip fed until the Portuguese exploration will have the right to explore for, large brine producers become Exploration into the lithium potential of develop and mine the lithium assets, established within the next five years. Portugal has been conducted by Jorge subject to the Company’s rights to Right now, the industry seems to be Carvalho and João Farinha of Instituto develop the uranium resource, which taking the predicted Chinese brine Nacional de Engenharia, Portugal. The will take priority. production figures with a pinch of salt! Corvas de Baroso and Guada regions Phillip Thomas, managing director at of northern Portugal have been found Tanco Admiralty, spoke of how, potentially, to contain lithium bearing pegmatite of In Canada, Tantlum Mining China could effect the new brine economical quanitites. In particular, Corp.(Tanco) is the major producer operation in the Salar del Rincon, glass grade spodumene, 5% Li2O from a complex spodumene/tantalum Argentina. He told IM: “We are content which was recovered at a rate bearing pegmatite hard rock resource. keeping a close eye on the CITIC of 50%. Wholly owed by Cabot Corp., USA, it Chinese joint venture and are reviewing Carvalho stated: “The resources can operates a concentrating facility in its progress in terms of quality and be considered a raw material for Bernic lake, Manitoba, Canada. It is range of product they can supply. I do standard spodumene concentrates in actively mined for ceramic grade not think it will become a direct ceramic and glass with applications in spodumene, and montebrasite as a competitor, as Chile and Argentina the Iberian market.” The Baroso and lithium phosphate concentrate for have better salar chemistry, and Guada regions are two of many ceramic applications. perhaps are more established players. studied, all potentially offering a new, Tanco’s production output of lithium I would not be surprised if Admiralty substantial source of hard rock lithium. concentration (5% Li2O) is currently actually win part of CITC’s market around 24,000 tpa. share when we enter the market.” North America Wolfgang Boes of Chemetall echoed Chemetall Avalon Ventures Admiralty’s comments, he said to IM: Production in the USA is limited to a One of companies on the verge of “One side of China has some hard rock brine source in Silver Peak, Nevada, hard rock lithium mineral production is resources with big production levels and operated by the German company, Avalon Ventures Ltd of Canada, who is there is large potential production from Chemetall. It has a combined lithium developing a spodumene resource at brines, however composition of the carbonate output with its sibling Separation Rapids, located ~60km brines maybe not very favourable.” operation in Argentina of 30,000 tpa, north of Kenora, Ontario. Regarding the touted production but IM was told that Silver Peak Separation rapids is only the second figures from China, Boes said: “It is represented a secondary operation for major economically viable deposit to always a concern when new producers Chemetall. contain petalite. The Avalon section start up, but the amounts produced are Comparatively, the USA has a small contains ten mineral claims totalling 90 difficult to predict. It is hard to say lithium resources base, however there claim units, covering ~3,600 acres whether these large volumes will be are a number of potential production owned 100% by Avalon. It is known as produced in China in the future.” sites. the ‘Big Whopper’ pegmatite system, with an indicated petalite resource of Europe Newco 8.9m. tonnes and an inferred petalite Keliber Resources On the 2 May 2007, Western Uranium resource of 2.7m. tonnes both grading In Finland, the native Keliber Resources Corp. of Canada (WUC), announced a 1.34% Li2O. Ltd Oy, is set to be the major producer proposed spin-off of its lithium As reported in IM March 2000 of spodumene from a hard rock resources to a newly created, wholly (Lithium takes charge, p.47), Avalon source, operating in the Länttä area of owned subsidiary, Newco. WUC has were at a development stage and Ullava and Kaustinen. The project mining operations at Kings Valley, looking to produce 200,000 tpa. aims to produce 100-125,000 tpa of Nevada, which hosts a number of Since, little has changed and Avalon ore, and is forecast to last for the next lithium bearing minerals in a hard rock are still in development. 15 years. source. Don Bubar, president at Avalon told Keliber has recently developed a new Kings Valley has an estimated lithium IM: “We are looking at potential production method for lithium carbonate resource of 1,905m. tonnes. markets for a new mineral composite carbonate and received an Interestingly, the site has a layer of [Avalon are developing] for application environmental permit for producing lithium rich hectorite claystone and in non combustible materials, but it is 6,000 tpa of lithium carbonate. The WUC has determined it is possible to still at development stage.” building phase is going to commence recover the lithium from the clays and in the summer of 2007 and production be able to market both products (see Gossan Resources is is scheduled for the latter part of Alternative sources). The magnesium- Gossan Resources Ltd of Manitoba, 2008. lithium clays have commercial value as Canada has established a spodumene The Geological survey of Finland suspending agents, binders, and mining operation adjacent to Avalon at (GTK) confirmed to IM exploration into stabilisers in cosmetics, chemical, and Separation Rapids. It established 100% new hard rock lithium resources has pharmaceutical industries. ownership of the site in June 2006 after June 2007 65
  8. 8. HEAD TO HEAD Li HARD ROCK Li BRINES buying the 50.1% held by other major development of the lower concentration construction, pool chemicals, agriculture, shareholder, Angus & Ross Plc of the UK. brines hinges on evaporation ponds to 21%. naturally increase the concentration to a The general feeling in the industry is Worldwide viable level which has to be done that the battery market (owing to lithium Bikita Minerals Ltd operates a hard rock, naturally, most probably in the deserts of ion batteries) has grown to at least level spodumene operation in the Masvingo the world. with the number one consumer, ceramics province of Zimbabwe, the largest lithium Brines, however, do occur in some of and glass, if not overtaken it. Lithium ion bearing area in the country. Bikita mines the most inhospitable regions of the batteries has been the fastest growing lithium minerals from its tin fields which world such as Salar de Atacama located consumer of lithium minerals over the host a 1,700km long pegmatite vein, in the Atacama desert of Chile and Peru past decade. The number one consumer varying from 20-70 metres in width. – the driest place on Earth. These has always been the traditional glass and Bikita has been plagued with conditions are the reason why the ceramics applications – this is set to infrastructure problems in Zimbabwe in deposits exist yet one of the greatest change due to the growth in portable the past including electricity shortages challenges faced by producers. rechargeable devices (mobiles, mp3 which hit a number of the countries Logistical costs add up, including players, heavy duty tools) and hybrid mines. The lithium operation, however, transport to the nearest markets, and the electric vehicles. is remote from major cities and virtually cost of supplying electricity to such HEV is set to be the future main self sustainable. It has a capacity of remote locations, resulting in companies consumer in the batteries industry, Toyota 120,000 tpa. setting up a whole operation on site from Motor Sales, USA, Inc. predict sales of Operations also exist in the Democratic raw material to product – so any HEV will rise from ~400,000 in 2005 to Republic of Congo, which are believed transport is of the finished product 6m. units in 2013. to host the largest hard rock resources in straight to the market. George Sandor of FMC said to IM: the world, situated in Manono and Hard rock sources tend to occur in “Lithium ion batteries have grown from a Kittolo. Currently it is the native mining more favourable conditions but also small to a very large base. Now it is company, Congo-Etain, that mines only have larger cost issues. The extracted competing closely for the number one casserite and columbite from the ore has to undergo extensive primary consumer spot. I see future significant Manono pegmatite. However, increased processing, unlike the naturally growth in this sector of 10-15% and significant production in such an concentrated brines in evaporation above.” unstable country as the Congo seems ponds. Hard rock sources also deal with Interestingly Wolfgang Bose of unlikely in the near future. greater bulk; for example the Chemtall gave the same growth figure: South Africa hosts spodumene Greenbushes operation, Austrialia, has a “Annual growth in the lithium ion battery pegmatites in the Noumas and spodumene concentration of 2–2.3% market is expected to be 10-15% over Norrabees regions of the Cape province, liO2. In both equipment and processing the next five to six years.” estimated at 30,000m. tonnes of the terms, initial start-up costs will be Sheth of SOG told to IM: “A focus has lithium mineral. significantly more when compared to been on the potential of lithium ion brines. batteries for the past ten years, it is a Brine v hard rock: This is certainly a view shared by growing market and the potential for use comparable sources? Wolfgang Boes of Chemetall, owner of a in HEV’s is getting close to realisiation; Essentially, yes. The end product from brine deposit in Argentina, he told IM: this is the next big market from 2010 both can be lithium carbonate and “Hard rock mining is a completely onwards.” although the process is different, the different process. It requires much higher IM spoke to Joyce Ober of the USGS: product is the same and competes for costs and [on these terms] cannot be “The lithium ion battery market is the same market ground. It is important compared.” Boes suggested that as long probably level with ceramics and glass to note that hard rock produces a as the process was to produce lithium now [ as the number one consumer]. concentrate for use in more traditional carbonate, the two end products can be There is still a lot of potential in lithium applications such as glass and ceramics, compared and compete for the same ion, but there is a question over the the concentrate purified further will market applications. safety issue [ after Sony recalled 90,000 produce lithium carbonate. Sheth of SOG commented to IM: of its Vaio laptop batteries, in October So the question arises: which is the “Brines and hard rock sources can 2006, due to over heating].” more superior source? Industry activity compete in certain applications. For the “ It is heavy duty portable tools that speaks for itself of late, with most glass industry lithium carbonate from require larger batteries that are the next producers opting for new brine deposits brines and spodumene from hard rock big consumer within the lithium battery in the salars of South America. Brines are actually [in some areas] used to market. Larger batteries in plug in hybrid provide a ready source of lithium mineral complement each other [where they vehicles will be needed for a larger rich water/salt that can be extracted with would normally be expected to range. There is also increased demand comparatively little capital investment, compete].” for the minor consumers of and are the most predominant source of pharmaceuticals, air conditioning and lithium today. The 2007 market construction” Ober added. The stumbling block thus far is the Figures from SQM in 2004 showed Don Bubar of Avalon Resources, yet to availability of high concentration deposits market share for consumers as: ceramics go in production, said of the current such as Salar de Atacama, Chile, and and glass, 21%; batteries, 19%; market: “The most exciting potential is Salar de Hombre Muerto, Argentina, the pharmaceuticals and polymers, 9%;, air the automotive sector with HEV. This two first brine deposits to become conditioning, 8%; primary aluminium should see another stage in demand and commercial operations. The production, 6%; other, including alloys, keep prices buoyant.” 66 June 2007
  9. 9. Li HARD ROCK Li BRINES HEAD TO HEAD Prices There are some key points overlooked Lithium carbonate per lb since 2003 The price of lithium in recent years has in this argument: (bagged or drums, del USA; large started to reflect the tightening supply volume contract) issue. As discussed, established Massive resources in China (both producers are expanding and new brines and hard rock), Bolivia (brines), Date $ producers are emerging, but there is Great Lakes (brines), the Dead Sea Jul-03 0.9-1.20 certain to be a lag time where the supply (brines) to name a few. Refer to the Jan-04 0.9-1.20 is squeezed by the ever growing demand. table of producers for the abundance Jul-04 0.9-1.20 Lithium is entering the start of the lag of new producers in development of time period, seen in the price trends of new sources also. Jan-05 0.95-1.40 lithium since 2003 (see table), and The abundance of hard rock sources Jul-05 1.5-2 mentioned by SQM in its first quarter still available. This has taken a back Jan-06 1.8-2.5 earnings report of 2007. It stated: “The seat to brines in recent times, with a Jul-06 2.1-2.5 strong demand observed during the last vast potential that is easily Jan-07 2.7-3.00 few years, combined by high capacity overlooked. May-07 3.1-3.30 utilisation rates, have put an upward New lithium sources including clays pressure on prices.” (see Alternative sources) and sea Source: Mineral PriceWatch FMC implemented a price increase on water. lithium carbonate in August 2004 by 9%, Lithium recycling methods, which at materials science and engineering it gave “rising energy, raw material, and present are in early development. department, Anadolu University, Turkey, freight costs” as factors contributing to Technological advances which Tahil who worked in conjunction with Eti Mine the rise. seems to have written off owing to his Works of Turkey, the state owned mining With expansions by the major players short time scale. company. and new production from China, in The focus was on boron clays mined particular, all predicted to converge in It is important to note that lithium is from the Bigadiç boron clay fields in 2008/09, the prices will be expect to really just taking off in a development Turkey. The major cost with this source is bottom out or fall. But with the price of sense. The demand for lithium the raw materials used. Büyükburç’s oil continuing to be astronomical, the compounds has seen accelerated growth research outlined some cost cutting price fall, owing to a slackening demand, over the last ten years. This means that initiatives that included: using natural raw may be offset by the rise in production only recently has there been a focus on materials (limestone rich clay) instead of and logistical costs. exploration for new sources and recent grade materials; and refining the The most recent price for lithium processing techniques(see Keliber production process by reducing carbonate is $3.10-3.30 per lb, del Resources and Portuguese exploration). pelletising. continental USA, bags or drums (Mineral Don Bubar of Avalon Resources Büyükburç told IM: “With our PriceWatch, May ’07, p.13). questions the figures Tahil bases his approach, we have achieved a significant argument on, he told IM: “The published cost reduction for producing from clays. South America, the new resources figures [used by Tahil] don’t However, it is important to have a Middle East? give a true picture. There are a lot of minimum clay content of ~4,000 ppm William Tahil of Meridian International pegmatites that have never been drilled. (ours were 2,000 ppm) and fine-tuning Research has put forth an argument The figures are a function of how much to the process details”. against lithium usage in batteries in his exploration has been done. You will see As a result of the research, the price of December 2006 article: “The Trouble as demand increases, exploration lithium carbonate (in a test scenario) with Lithium: implications for future PHEV increases and so will the resource produced from Bigadiç boron clays was production for lithium demand”. figures.” $6.36/kg in 2005, compared with $3.5- The dramatic piece warned that a Tahil has based his argument on 2005 4.4/kg at the same time. Interestingly, switch from oil dependant cars to lithium USGS figures, comparing the here and lithium carbonate prices have risen so ion battery powered cars will result in now resource figures with future needs. much recently that the prices now stand “South America becoming the new There is little foresight into new sources, at $6.82-7.26/kg (see Prices). middle east”, and create “new exploration, and technological advances, It is important to note that research into geopolitical tensions not reduce them.” which could significantly increase reserve clays as a source of lithium is at an early A truly dramatic scenario. levels. stage; Büyükburç’s 2005 research was Tahil’s argument is based on a time based primarily on work from the 80s. constraint of ten years, as he states at the Alternative sources He stresses that: “…additional testing beginning of the piece: “…a significant With an element as abundant as lithium should be conducted to optimise the percentage of the world’s 1 billion (65ppm average content in the Earth’s process and reduce production costs.” vehicles must be electrified in the coming crust), options are not hard to come by The next five years should be interesting decade”. It is not stated precisely what a for new sources. The main challenge is with expansions at established producers, significant percentage is. However to making the extraction economically new production from China, the embrace even start to envisage 50% of all viable. of the lithium ion battery market, and automobiles on the road being electrified increased investment into exploration. It (or partially) in ten years is difficult. Clay is difficult to predict how large the lithium Given this time constraint and this One promising future source is clay, in market will become, but at the moment dramatic shift, any commodity would particular hectorite. Research into this the mood is positive and the market suffer, even his favoured nickel and zinc. has been carried out by Atýl Büyükburç of stronger than ever. June 2007 69