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New York NY – December 4, 2018 – Amid the race to capture the lead with new developments in EV’s, lithium-ion batteries, and energy storage technologies, the pressure is mounting on global energy metals developers and existing producers to keep up with secure qualified supply to this growing demand from nations and global corporations for raw materials. Several developers and producers of energy metals (lithium, cobalt and vanadium) are ramping up operations, including Standard Lithium (TSX.V:SLL) (OTC:STLHF), Albemarle Corporation (NYSE: ALB), Sociedad Química y Minera de Chile S.A. (NYSE: SQM), Nemaska Lithium (TSX: NMX) (OTC: NMKEF), and Largo Resources (TSX: LGO) (OTC: LGORF).
Innovators like Standard Lithium (TSX.V:SLL) (OTC:STLHF) are providing the sector with potential new domestic US supply for the near future. With plans to install a demonstration rapid lithium extraction pilot plant at its flagship project in south Arkansas, the company presents an alternative to the longer-term development of conventional lithium mines and production facilities.
The Demands Put Upon the Producers Continue to Ramp Up
In the battle to capture the lion’s share of the rapidly growing lithium-ion battery industry, analysts point to China investing billions of dollars every year to develop a supply chain for battery-grade materials. Asian developers are also building more facilities to process raw materials required to and for manufacturing lithium-ion batteries.
Domestically, the US Advanced Battery Consortium just awarded US$1.8 million to Worcester Polytechnic Institute for the advancement of research regarding lithium-ion batteries. Meanwhile, discussions are mounting for the next phases of batteries that will not only incorporate lithium but graphene too. Danish researchers are even looking towards lithium batteries saving the planet from climate change impacts through powering supercomputing, which given the proper catalyst could spike demand from lithium buyers even more so.
Beyond the conventional methods of extraction being utilized, whether it’s hard rock lithium mining or brine evaporation, the producers are going to need to cover a lot more demand in years to come. One way is developing, from Standard Lithium (TSX.V:SLL) (OTC:STLHF) with its flagship 180,000 acres Lithium Brine Project in south Arkansas.
Feeding the project will be brine produced as a byproduct of existing bromine production facilities in the southern state. On November 14th, an NI 43-101 maiden resource report was announced for the 150,000 acres south central Arkansas project with Standard Lithium (TSX.V: SLL) (OTC: STLHF) and global specialty chemical company LANXESS Corporation. The report includes 3,086,000 metric tonnes of lithium carbonate equivalent (LCE) at the Inferred Resource category. Standard Lithium is also pursuing the resource development of 30,000 acres of separate brine leases located in southwest Arkansas.
Standard Lithium’s planned joint venture with global specialty chemical company LANXESS Corporation, if proven successful, could be a lithium game changer to bridge the inevitable supply gap on the horizon. The two hope to commercially produce, market and sell battery-grade products extracted from the ample brines with a so-far untapped lithium potential.
Lithium Supply’s Warning Signs
Thanks to growing demand from production of EVs by US manufacturers such as Tesla Motors, the lithium market is expected to struggle to meet demand through 2025. Tesla is facing major competition over lithium supplies from foreign lithium buyers, mostly coming from Asia. Even the European Union is sounding the alarm for its need to develop lithium mining and refining capacity.
Through a proprietary process that uses a solid ceramic adsorbent material with a crystal lattice Standard Lithium (TSX.V:SLL) (OTC:STLHF) has developed technology capable of selectively pulling Li + ions from the “tail brine” or waste brine after it has gone through the bromine-extraction step.
Meanwhile, the majors are spending billions to shore up their own production capacities. Albemarle recently boosted its lithium supply through a $1.2 billion deal for a 50% share in an Australian mine. Chinese firm Tianqi is looking to spend over $4 billion to buy a near-quarter stake in Chilean lithium miner, SQM.
The need to secure new lithium is quite apparent.
Brine Extraction To The Rescue?
Located in Eldorado, Arkansas, Standard Lithium’s (TSX.V:SLL) (OTC:STLHF) demonstration extraction plant is being utilized to process brine from existing large-scale commercial brine assets. Reducing and or eliminating the exploration, resource development and permitting stage the most of its peers face The project sits upon the Smackover Formation, which is one of the world’s largest brine deposits.
The company recently announced a planned joint venture with partners, German chemical giant, LANXESS Corporation to pursue the commercial development and sale of battery grade lithium products extracted from Smackover brines in south Arkansas. Standard Lithium’s (TSX.V:SLL) (OTC:STLHF) proprietary technology is key to the project’s success, while its partner provides the crucial brine supply.
Upon proof of concept, LANXESS is also prepared to fund the joint venture to commercially develop the future project.
These arrangements save Standard Lithium (TSX.V:SLL) (OTC:STLHF) significant time and capital which would have been quite challenging to secure independently. So far, they’ve already drawn and sampled multiple tanker trucks’ worth of brine, and the team has put in significant geophysics work, and additional drilling.
Historical data on the area shows 150 – 500 mg/L lithium in brines. The state of Arkansas currently produces the equivalent of 42.6 million m3 of brine per year—roughly 9.4 billion gallons, or over 35.5 billion litres.
Through additional agreements with independent oil and gas producers Standard Lithium (TSX.V:SLL) (OTC:STLHF) has access to open, unused Smackover wells in and immediately adjacent to the project from which to gather new, high-quality lithium brine samples from the key brine production zones in the Smackover Formation. A sampling program conducted in Q3 2018 yielded lithium grades ranging from 347- 461 mg/L.
Now that the Southern Arkansas project has an announced inferred resource of 3,086,000 tonnes LCE attached to it, the push to demonstrate the company’s technology works is going to be a key milestone for its shareholders. With access to extensive infrastructure, low-cost chemical reagents, and a highly skilled workforce, Standard Lithium (TSX.V:SLL) (OTC:STLHF) is an example of how one innovative developer plans to fast-track production of a new domestic supply of lithium.
Further Developments in Energy Metals
Located adjacent to the Standard/LANXESS site in Arkansas is Albemarle Corporation (NYSE: ALB). However, the lithium giant’s operations in Arkansas are currently for the manufacturing of bromine and bromine chemicals. In 2011 Albemarle announced it had successfully produced lithium from brine at the pilot plant level in Arkansas, and have identified their Arkansas project as a world-class asset. This asset may be receiving more attention from the company as Albemarle’s South American lithium operations are dealing with a distraction as Chile has rejected the company’s expansion plans for environmental reasons and is also taking the company to court over lithium prices.
Another ongoing shakeup in Chile is happening with Sociedad Química y Minera de Chile S.A. (NYSE: SQM), which is seeing a 23.77% stake in the company (currently owned by Nutrien) going up for auction. The Chilean stock exchange has put the auction in as the final step toward completing the sale of a coveted stake in the world’s No. 2 lithium producer to China’s Tianqi. The minimum bid would be set at $65 per share, for a total package price of $4.066 billion.
The hunt for a stable North American lithium supply continues, as Nemaska Lithium (TSX: NMX) (OTCQX: NMKEF) is moving forward with construction on its Whabouchi mine and electrochemical plant in Shawinigan, Quebec, Canada. With winter having arrived, Nemaska management is confident that they’ve properly taken weather impacts on construction and operations into account. Construction so far is moving ahead inside the concentrator building, and the company will be able to begin the installation of equipment as it arrives on site.
Beyond lithium, there have been further developments in other energy metals, including vanadium. In Brazil, Largo Resources (TSX: LGO) (OTCQX: LGORF) is set to expand its Maracás Menchen vanadium mine. Brazil’s Institute of Environment and Water Resources (IBAMA) has issued an environmental license for the mine’s expansion project. With the approved expansion, Largo wants to grow output by 25% by increasing the production capacity of the milling, fusion, leaching and filtering areas.
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