Sayona Mining (ASX:SYA) shares fall 25% in last two weeks, here’s why

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Sayona Mining (ASX:SYA) shares fall 25% in last two weeks, here’s why

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Sayona Mining Limited (ASX:SYA) shares
Image source: © Suryasnair4288 | Megapixl.com

Highlights

  • The fall in Sayona share prices might be because of the lower demand for iron ore.
  • China is the major iron export market for Australia.
  • Currently, the Chinese economy is down as the country continues to isolate millions of people to combat COVID-19.

Sayona Mining Limited (ASX:SYA), a lithium producer, was founded in 2000 and the company has its projects in Canada, Western Australia, and Quebec.

It is to be noted that Sayona's shares touched the sky in its last trading session as its shares closed 9.09% on ASX on Friday (13 May 2022) at AU$0.24 each.

Why did Sayona's shares skyrocket on Friday?

While Sayona did not provide investors with any price-sensitive information, the most likely cause of the price hike on Friday is the broader material sector performance. The ASX 200 Materials Index was 1.56% up at 16,677.50 points in its last session.

However, Sayona's share price has fallen around 25% in the last two weeks. This might be because of the lower demand for iron ore. China is the major iron export market for Australia. Currently, the Chinese economy is down as the country continues to isolate millions of people to combat COVID-19 as part of its zero-virus policy.

Also Read: How did Sayona Mining (ASX:SYA) shares perform in last one month?

Source: © Kaikai | Megapixl.com

A look at lithium production in Australia

Demand for electric vehicles has been growing tremendously. Therefore, miners are now creating more lithium than ever before.

The United States Geological Survey (USGS) estimates that roughly 100,000 tonnes of lithium was produced globally in 2021 (excluding the US). This is an 18% increase over the 82,500 tonnes of lithium produced in 2020.

According to the data, Australia produced 55,000 tonnes of lithium in 2021, up 28% from the 39,700 tonnes it produced in 2020.

With this, Australia became the world's leading lithium producer in 2021, followed by Chile (26,000 tonnes), China (14,000 tonnes), and Argentina (6,200 tonnes).

However, global lithium output last exceeded 90,000 tonnes in 2018, when 95,000 tonnes were produced.

About Sayona's projects

Image Source: © 2022 Kalkine Media ®

Moblan Lithium Project

The Moblan project is roughly 100 kilometres north of Chibougamau and 85 kilometres from Mistissini, a Cree (First Nations) community. The project is accessible all year via the Route du Nord. Its proximity to Chibougamau and Mistissini and its infrastructure make it a suitable location for prospecting and mining industrial energy mineral reserves.

As the project advances, Sayona is committed to involving local communities, particularly First N.

On 26 April 2022, Sayona reported that drilling data from the Moblan Lithium Project in northern Québec identified a new southern lithium pegmatite zone near the main Moblan deposit. This project is 60% owned by the company.

Mallina Lithium Project

Morella Corporation updated exploration efforts at the Mallina Lithium Project (E47/2983) and the Mt Edon Lithium Project (E59/2092/E59/2055) on 22 April 2022.

Morella Corporation owns 51% of Sayona Mining's potential lithium development portfolio in Western Australia. The Mallina project is part of Sayona's Pilbara portfolio. Many zones of spodumene pegmatites have been identified within a 25-square-kilometre area.

Also Read: From PLS, SYA to CXO: Take a look at top 5 ASX lithium stocks

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