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Sony Corporation initially sold lithium Batteries in 1991 for its camcorders, and these batteries have a much wider scope than its mere application in small consumer electronics. Currently, the lithium industry is amid technological advancements and metamorphosis. The application of lithium-powered batteries extends to sustainable growth in the environment of the present time, which is exaggerated by global warming and carbon emissions. Meanwhile, it becomes more significant when global leaders have been pushing for sustainable growth and low-carbon emissions to tackle the side effects of global warming.
Lithium is used for making the batteries applied in electric vehicles, which reduces the use of fossil fuels like petroleum and allied products. Besides, it is also used in the new-age renewable energy generator to store surplus electricity in batteries for the future use.
In this article, we would discuss two stocks from the Metals & Mining Sector with their recent updates. On 23 July 2019, the S&P/ASX 200 Materials (Sector) was at 14,337.4, up by 32.4 points (at AEST 2:51 PM) Meanwhile, the Australian benchmark index S&P/ASX 200 was at 6,719.3, up by 28.1 points (at AEST 2:52 PM).
Mineral Resources (ASX: MIN)
Mineral Resources Limited (ASX: MIN) is based in Western Australia, and engaged in the business of materials including Lithium & Iron ore. The stock of the company is a constituent of S&P/ASX 200, S&P/ASX Dividend Opportunities Index, S&P/ASX 200 Materials (Sector) and more.
MINâs PTR Pilot Plant Generates Graphite: On 23 July 2019, MIN released an update provided by Hazer Group Limited (ASX:HZR) that Paddle Tube Reactor (PTR) which is owned and run by MIN has concluded commissioning and also, fruitfully generated quality graphite. At present, the test program for PTR Pilot Plan has started. Also, graphite product purity of more than 95 percent was attained in the maiden pilot plant.
During December 2017, MIN and HZR has signed a binding co-operation agreement, for the purpose of developing a MIN owned and run commercial scale synthetic graphite output facility built on Hazer Process.
Farm-in Obligation: On 22 July 2019, Mineral Resources reported an update regarding the Farm-in and Joint Venture Agreement (FJVA) between Brockman Mining Limited (ASX: BCK), which is the company related to the Marillana iron ore project (Marillana) in the Pilbara, Western Australia.
Accordingly, Mineral Resources need to spend A$250k on exploration and development activities at the tenements in Marillana, conclude the process design criteria of processing plants and optimise the mine study plan and finalise the development layout plan. Subsequently, this would be done through its wholly owned subsidiary Polaris Metals Pty Ltd to acquire a 50% interest in Marillana.
FJVA Updates: As per the release, it has been agreed by the companies that the Farm-in Obligation would take up an additional twelve months to conclude. Also, the companies had decided to extend some key dates under the FVJA:
- The construction commencement date for the rail and port system under the agreement would be amended to âon or before 31 December 2020â from âon or before 31 December 2019â.
- The commencement date for operation at the rail and port system under the agreement would be amended to âon or before 31 December 2022â from âon or before 31 December 2021â.
Consequently, the companies have also decided to amend the time for fulfilling the conditions related to the Mine to Ship Agreement executed on 21 January 2019 (MSA), which have been amended to 31 December 2020 from 31 December 2019.
As per the release, the MSA conditions precedent involves execution of an agreement with the State of Western Australia, obtaining the leases and licenses related to the light rail system at Port Hedland. Also, the conditions also necessitate the company to obtain the funding to be used in the construction and commissioning of the rail and port infrastructure. Besides, one more condition requires to make a final capital investment decision to proceed with the infrastructure project.
Marillana Project: Reportedly, it is situated in the Hamersley Iron Province, which is close to 100km north-west of Newman, in the Pilbara zone, WA. Also, Marillana covers an area 82km2 near to Hamersley range wherein extensive areas with iron ore mineralisation, hematite detrital mineralisation has been developed in the dissected Brockman Iron Formation. Besides, the Marillana Project hosts mineral resources of iron ore amounting to 1.51 billion tonnes, including ore reserves amounting to 1.0 billion tonnes, as per the JORC.
YTD Performance till March 2019 (Source: Companyâs Presentation, May 2019)
News Clarification: On 17 July 2019, Mineral Resources responded to a notification for clarification. Accordingly, the notification was regarding an amendment issued by the WA Department of Water & Environmental Regulation (DWER) related to the Wodgina lithium plant. Also, approval of DWER related to the licensing of the plant would be necessitated for the commissioning of processing plants. Currently, the company is working on the requests from DWER, and it expects no material impact on the project or the financial position of the company.
Besides, the company also clarified that the allegations related to no-appropriate approvals sought by the company for the airport at Wodgina. Subsequently, it has been asserted the company has all the required approvals to operate the airport that was operational previously. In addition, the company has been engaged with the Civil Aviation Safety Authority, as the construction of the airport runway was concluded.
On 23 July 2019, the stock of Mineral Resources was up by 1.179% trading at A$15.45 (at AEST 2:50 PM).
Altura Mining Limited (ASX: AJM)
Altura Mining Limited (ASX: AJM) is focused on meeting the growing demand for products used in manufacturing lithium batteries. The company operates and owns Altura Lithium Project at Pilgangoora, Pilbara WA,. Also, the mine started its production in the year 2018.
On 23 July 2019, the company notified that it has extended its association with the important shareholder â Ningbo Shanshan Co. Ltd (Shanshan) with an equity investment with the purpose of raising A$22.4 million. With this move, the companyâs strategic partnership with the one amid the leading battery material player- Ningbo Shanshan has further solidified.
On 22 July 2019, the securities of Altura Mining were placed on a trading halt requested by the company due to the release of a pending announcement related to strategic equity investment. However, the securities of the company started trading on ASX on 23 July 2019 after the release of the pending announcement.
Also, the securities of the company were placed on a trading halt on 5 July 2019. Subsequently, on 9 July 2019, Altura Mining conveyed that a Binding Offtake Agreement (BOA) has been signed with a company focused on lithium material manufacturing in China â Shandong Ruifu. Accordingly, Altura Mining had executed the BOA for a term of 5 years until June 2024 to supply 35,000 tonnes per annum of 6% grade spodumene concentrate.
Besides, the first shipment within the agreement for approximately 8,000 tonnes has been scheduled for this month, and the pricing would be based on a Li2O content formula considering published reference pricing weighted for lithium carbonate and lithium hydroxide. In addition, the agreement with Shaanxi J&R Optimum Energy (JRO) would be terminated related to existing offtake arrangement for the rest 50,000 tonnes per annum.
As per the release, some of the key terms include a minimum price of US$550 dmt and maximum price of US$950 dmt based on Li2O content per dmt on 6% Li2O. Also, it provides the option to negotiate offtake from the proposed Altura Stage 2 development.
Offtake Commitments (Source: Companyâs Announcement)
James Brown, Managing Director of Altura Mining, stated that offtake agreement with Shandong Ruifu improved the customer base, and the new customer had received the supplies in 2019 that has now resulted in a long-term contract. Meanwhile, the quality of the product has been improving, which continues to attract customer interest to support short and long-term demand.
Stage 2 Expansion (Source: Companyâs Presentation, March 2019)
On 25 June 2019, Altura Mining reported Ningbo Shanshan Co. Ltd as a major shareholder of Altura. Accordingly, Shanshan acquired an 11.8% interest from former shareholder JRO, representing approximately 251 million shares in the company. Besides, Shanshan is based in China, is an integrated supplier of lithium-ion battery components such as cathode, anodes and electrolytes.
James Brown, Managing Director of Altura Mining, stated that the company is delighted to welcome the Chinese company as a shareholder, which has demonstrated its abilities in the global lithium battery materials. Besides, he stated that the sale of interest was a part of divestment procedure committed by JRO, and the transaction concluded the divestment procedure.
On 23 July 2019, the stock of Altura Mining was trading at A$0.115, up by 6.364% (at AEST 2:48 PM)
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