High on Lithium

With oil prices edging closer to $100 per barrel,

the chatter about electric cars is again on the rise

• • Talison Lithium Ltd. (TSX:TLH), based in Australia

  • Western Lithium USA Corp.'s (TSX.V:WLC;PK:WLCDF)

  • King's Valley lithium project in Nevada

  • In Chile, off of the Atacama Desert, you're going to see grades of 2,000 parts per million (ppm) of lithium. That's at the top of the range

Who are the major lithium players at this stage?

There are four major Lithium producers

3 produce from brine deposits in South America

Sociedad Quimica y Minera de Chile SA (NYSE:SQM; SN:SQM), which is the Chilean national mining and chemical company;

FMC Lithium (NYSE:FMC),

which is part of FMC Corporation; and Chemetall, which is part of Rockwood Holdings, Inc (NYSE:ROC).

Talison Lithium

Talison really dominates the market for lithium that's used to manufacture glass and ceramics. But they also sell a fair bit of their lithium to companies in China that produce battery-grade lithium.

Greenbushes Lithium

Operation in Western Australia, and, as you said,

that's a hard rock deposit. They produce a mineral called spodumene. The theoretical limit on lithium concentration in spodumene is about 8% lithium

What's the life expectancy of that operation? 20 - 40 YEARS

That's one of the reasons there are no other major hard rock suppliers because the primary market for that material is glass and ceramics. When you have something that's as inexpensive to produce as the spodumene from that high-quality deposit, it's very, very difficult for anybody else to get into that game.

Lithium batteries

are light, and have a low self-discharge rate

at about five per cent a month.Lithium-ion batteries have a long shelf life, but eventually they stop holding their charge. They are extremely toxic and need to be recycled.

Mining for Lithium at Salar de Uyuni Bolivia

Nissan LEAF,

it uses about 4 kg Lithium metal / car

or about 21 kg. of lithium-carbonate equivalent

Last year, the demand for lithium was about 100,000 tons.

(We usually quote the amount of lithium shipped in the world as lithium-carbonate equivalent because it's a nice, benign chemical.)

Major increase in the price of lithium per ton: $6,500

Lithium not on London stock market, but by deal

But the price for lithium is not set like copper or nickel prices on the London Metals Exchange. Lithium prices are determined by buyers and sellers working out agreements with each other

Orocobre Limited (TSX:ORL; ASX:ORE).

signed an offtake agreement and development program with Toyota Tsusho. Equity injection by Toyota into Orocobre's Salar de Olaroz lithium project in Argentina.

Lithium Americas Corp. (TSX:LAC).

with a target price of $2.50. It's trading around $1.90 now

They have lithium supply agreements with both Magna International Inc. (NYSE:MGA; TSX:MG) and Mitsubishi Corporation

Deposits in Chile, Argentina and Bolivia

that make them so prospective for lithium?

The salty brine has a high enough concentration of lithium to make it worthwhile to process. But it also has a low enough concentration of contaminants that those materials don't negatively impact the cost of the lithium. That has made the South American desert one of the least expensive places in the world from which to source lithium.

Tibet. China.

the lithium concentration is low and the concentration of some contaminants, like magnesium, is relatively high. That, unfortunately, has made those deposits uneconomic to mine.

Western Lithium, Nevada

The company has a clay deposit, the King's Valley lithium project in northern Nevada. King's Valley probably contains a never-ending stream of lithium. It's in the United States, so the political risk is minimal. Battery-grade lithium, at a very reasonable cost. The cost outlined in its study would make Western Lithium one of the least expensive producers of battery-grade lithium in the world.

Rodinia Lithium Inc.'s (TSX.V:RM; OTCQX:RDNAF) Argentina

Salar de Diablillos lithium brine project in Argentina

looks like a good one

Brine vs Hard rock

With brine, for example, lithium production is dependent on the weather, so guaranteed delivery can become an issue. Production of lithium from hard rock or clay is nearly certain and independent of the weather

source: stockhouse.com

click to enlarge source: dailymail.co.uk