ASX-listed Lithium Players Scaling Through The Turbulent Lithium Markets

Lithium prices have again taken a hit in the international market to post more headwinds for the beleaguered ASX-listed lithium miners. Just a recent few days, and lithium lost another U.S. dollar to trade at USD 10.0 per Kg (as on 26 September 2019 on the London Metal Exchange (99.5% min Li Carbonate Battery Grade- Spot CIF China, Japan and Korea).

China’s Dominance in the Lithium Value Chain

China is currently securing the lithium supply across the globe to meet its lithium value chain demand. Recently Contemporary Amperex Technology Co (or CATL)- a major Chinese battery firm took a stake in the ASX-listed Lithium player- Pilbara Minerals Limited (ASX: PLS).

CATL, which is one of the leading electric-vehicle battery makers in China bought 8.5 per cent stake in Pilbara under the roof of Pilbara’s $91.5 million capital raising programme. The Hong Kong unit of CATL purchased the stake in the Australian lithium company via a $55 million placement, while Pilbara raised the additional $36.5 via an institutional placement at $0.30 per share.

CATL is just a recent example of automotive battery makers in China taking exposure in the Australian mines to secure the supply chain of the raw material for its value chain.

To Know More, Do Read: Latest With Lithium Chemical Players- AGY, LPD, ADV, AJM

Not just Australia, Chinese battery makers are securing the supply for their value chain in Chile as well, which holds the world’s second-largest lithium capacity. Chinese battery makers’ interest has recently grown strong. Last year, Tianqi- a China-based lithium value chain supplier clinched a USD 4 billion deal to purchase a quarter stake in SQM- the behemoth lithium miner in Chile.

Australian Lithium Industry

The Australian lithium industry is facing some tough times in the current lithium supply glut, and many miners have decided to curb the production level to support the prices. The low prices environment for lithium and lithium-based products have forced many miners such as Alita Resources Limited (ASX: A40) to shut down their projects.

To Know More, Do Read: Lithium Demand Plays Spoilsport; Alita, Galaxy and Pilbara Limits Production

However, the recent stance of the Australian miners to choke the supply chain of the battery making raw material holds an imminent threat to the Australian lithium industry to lose its position at the top of the lithium supply chain to Chile.

Also Read:  Australian Lithium Industry And Three Australian Names- AJM, CXO, LI3

Chile Stance to Inch Up the Value Chain

Chile decided to increase the lithium production drastically to regain the number one spot in the supply chain, which the country previously lost over tighter regulations on private miners.

To Know More, Do Read: Chile To Boost Lithium Production; PLS, GXY and LPD Stance Over Predicted Li-OH Demand Surge

Chile is now pushing for the battery technology investment in exchange of access to its lithium deposits; however, despite the stringent conditions to put a value chain plant in Chile, many global firms from China, Japan and Europe have shown interest in Chile amid its abundance lithium resources.

Apart from that, the global firms look to tie up the supply of white gold, which is vital for the electric vehicle segment.

The South American country held global roadshows before the second lithium-for-investment tender, which attracted many global firms from China, Japan, Europe, etc. Toshiba Corporation and Russia’s state nuclear agency Rosatom have shown recent interest in Chile, and many more global firms are lured by Chile’s tremendous lithium deposits under the arid salt flats in the Atacama desert.

The slated auction for 2020 in Chile offers a promised supply of discounted Chilean lithium for the commitment to build lithium value chain plants in Chile.

However, the lithium market conditions had previously forced all the three tender winners including Samsung and Posco, to drop out from the previous deal.

Investors and Miners Riding on the Bumpy Road

Despite the odds, the lithium suppliers and investors are clinching to the hope of the lithium rush amid anticipated penetration of the electric vehicles in the global market.

To Know More, Do Read: Why Are Market Players Clinching to the EV and Lithium Forecast?

The ASX-listed lithium miners are aggressively securing deals and hosting takeovers to expand their production capacity to leap with the future forecasted lithium rush.

To know More, Do Read: Lithium Stocks in Action; Galaxy Acquires Alita’s Senior Loan Facility; While Orocobre Wraps Competitive Chemical Pricing

The ASX-listed lithium miners are also engaged in securing offtakes agreement for their respective prospects and are shipping lithium to China amid a slight increase in lithium chemicals demand in China, which took a down stroll post the trade spat between the two significant economies- China and the United States intensified.

Also Read: Will Takeovers Be Common In The Lithium Space – WES, KDR

ASX-Listed Lithium Miners

Altura Mining Limited (ASX: AJM)

The company loaded and shipped a combined 19,500 wet metric tonnes of spodumene concentrate from Port Hedland to the existing offtake partners in China in the previous week. The current shipments take spodumene exports since 1 July 2019 to about 37,000 dry metric tonnes, which is in line with the company’s previous guidance.

Altura is further planning to deliver a minimum of 10,000 dry metric tonnes, and the company delivered its production guidance of 45,000 wet metric tonnes of spodumene concentrate with a total of 45,484 wet metric tonnes (quarterly).

The company also observed a record production of 16,562 wet metric tonnes in September 2019, and the projects of the company marked the completion of two full quarters of Commercial Production and as per the company, is gaining strong sales interest from the existing offtake partners.

AJM closed the weeks trade at $0.068, as on 04 October 2019.

Lepidico Limited (ASX: LPD)

Lepidico Limited-an ASX-listed lithium miner known for its propriety technology to extract lithium chemicals from non-conventional sources, specifically mica minerals including lepidolite and zinnwaldite, recently presented its full-year statutory accounts for the financial year ended 30 June 2019.

The Key highlights from the FY2019 are as below:

  • The company increased the global Mineral Resources at Alvarrões by 290 per cent and contained lithium surged by approx. 210 per cent against the previous estimates. The JORC 2012 classified Mineral Resource is anticipated at 5.87 Mt @ 0.87 per cent of lithium oxide in Indicated and Inferred categories.
  • LPD produced high purity lithium hydroxide from the proprietary LOH-Max™ process, over which Lepidico has entered into a worldwide exclusivity arrangement.
  • The company entered an MoU with Gulf Fluor LLC for
    • the supply of sulphuric acid
    • provision of land to construct the Phase 1 Plant Project; and
    • the marketing of Phase 1 Plant by-products to be sold within the United Arab Emirates region.
  • The Phase 1 Plant Feasibility Study design was adapted for LiOH production via employing LOH-Max™ in Abu Dhabi, with engineering on-track for completion in the December 2019 quarter.
  • LPD started the Mine and concentrator design work or both Karibib and Alvarrões, which would allow the Ore Reserves to be estimated for both Projects in FY2020.

Likewise, many other ASX-listed lithium miners have progressed to inch up their production capacities and are securing offtakes for the anticipated rush for lithium.

LPD closed the weeks trade at $0.016, as on 04 October 2019.


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