The UK just announced that it is building its first lithium refinery in an effort to strengthen its supply chain for electric vehicles (EVs). The groundbreaking refinery, which will be developed by Green Lithium, will create over 1,000 jobs and ensure Britain’s supply of battery-grade materials for EVs as well as renewable energy and consumer technologies. The construction is coming amid concerns over the fragility of supply chains for important minerals, especially those from China, due to deteriorating relations between China and the US and UK. Over the past two years, lithium prices have risen about tenfold due to EV sales surging. Last year, global EV sales were roughly 6.75 million, and 2022 will likely end up at about 10.125 million. That means lithium demand from EVs alone will increase by roughly 152,000 tonnes of lithium carbonate equivalent, which bodes well for lithium mining companies like E3 Lithium Ltd (TSXV:ETL) (OTCQX:EEMMF), Lake Resources NL (OTC:LLKKF), Standard Lithium Ltd. (TSXV:SLI) (NYSE:SLI), Lithium Americas Corp. (NYSE:LAC) (TSX:LAC), and Albemarle Corporation (NYSE:ALB).
E3 Lithium Ltd (TSXV:ETL) (OTCQX:EEMMF) is a lithium resource and technology company that aims to produce lithium products to power the growing electrical revolution. On November 10, E3 Lithium announced the sample results from the first well in the Clearwater Project Area within the Bashaw District. Based on brine samples from five zones, the P50 lithium concentration from the company’s first well is 76.5 mg/L.
E3 Lithium’s well is the first of three designed to understand the aquifer’s production properties and lithium concentrations in an area not previously tested. This well was completed near the centre of the Clearwater Project Area and is a candidate location for E3’s first commercial operation. E3 retrieved samples of brine from five separate intervals to provide a vertical perspective of lithium concentrations across the 200 metres of producible aquifer in this area.
“This historic well, which was the first of its kind in Alberta drilled for the purposes of evaluating lithium, proves consistent lithium concentrations continue into this part of the aquifer,” said Chris Doornbos, President and CEO of E3 Lithium. “This data validates our model, supports our resource upgrade from Inferred to Measured and Indicated, and increases our confidence in the global significance of the Bashaw District as an emerging lithium jurisdiction in western Canada.”
The results come just two weeks after the company completed the production test on the first well. The test was designed to confirm the viability of the lithium-rich brine from E3 Lithium‘s resource in the Leduc Reservoir. The five-day production test provided the company with critical data to support the commercial viability of producing lithium from the Leduc Reservoir.
The test also included reinjecting brine back into the reservoir to confirm injectivity capacity, which is an important component of E3 Lithium‘s environmentally sustainable process. The test included re-injecting the produced brine at a rate of 1,200m3/d in less than two days.
E3 Lithium acquired the Clearwater Project Gross Overriding Royalty that was negotiated back in 2016 during the original amalgamation of the company’s permits in the Clearwater Project Area. As part of the original agreement, the company had the option to buy the royalty by September 30. The royalty would have provided 2.25% of gross revenue from any metallic and industrial mineral production to the original owner.
Based on E3 Lithium’s Preliminary Economic Assessment (PEA) released in 2020, the value of the royalty would have been roughly C$8.5 million per year. Using recent lithium prices, the royalty would be significantly higher, outlining the clear economics behind the decision to acquire it for C$800,000.
Lithium Producers Continue Expansion Efforts
Earlier this month, lithium developer Lake Resources NL (OTC:LLKKF) provided an update on progress at its Kachi project lithium processing demonstration plant. The company revealed that the demonstration plant had been completed and that the wet and dry commissioning processes had taken place in September and October. The demonstration plant is currently processing Kachi brines, with final process optimization almost complete. The demonstration plant’s initial operations have already delivered product to specification, with the demonstration plant achieving similar lithium recoveries as the Oakland pilot plant test work in California. The company also stated that the final lithium product would be qualified by a tier-one battery manufacturer in order to validate product specifications.
Albemarle Corporation (NYSE:ALB) recently released results for the third quarter ended September 30. The results highlight that the lithium unit netted sales of $1.5 billion an increase of $1.1 billion due to higher pricing, renegotiated contracts and increased market pricing. Volume increased as a result of the La Negra III/IV expansion in Chile, as well as higher tolling volumes to meet rising customer demand. The unit’s adjusted EBITDA was $1.1 billion, up $985.8 million year on year, as higher pricing and volumes more than offset higher costs. Going forward, the company reaffirmed its Lithium full-year 2022 outlook, expecting EBITDA to grow 500-550% year over year. Due to previously renegotiated contracts and increased market pricing, average realised pricing growth is expected to be 225-250% year over year.
Standard Lithium Ltd. (TSXV:SLI) (NYSE:SLI), an innovative pre-commercial lithium company, has announced that the United States Patent and Trademark Office has issued Notices of Allowance for the company’s first two US patent applications, both titled “Process for Recovering Lithium from Brines,” a novel and proprietary technique for continuous Direct Lithium Extraction (DLE) from lithium brines. These are two of three pending US patent applications for components of Standard Lithium’s innovative DLE processes. Standard Lithium anticipates that these patents will be officially registered in the coming months.
On November 3, Lithium Americas Corp. (NYSE:LAC) (TSX:LAC) announced its intent to advance the separation of its North American and Argentinian business units into two independent public companies. The Separation will establish two separate companies that include Lithium International, an Argentina-focused lithium company owning Lithium Americas’ interest in its Argentine lithium assets, including the near-production Caucharí-Olaroz lithium brine project in Jujuy, Argentina; and Lithium Americas (NewCo), a North America-focused lithium company that owns Thacker Pass lithium project in Nevada and the Company’s North American investments.
E3 Lithium is a development company with 24.3 million tonnes of lithium carbonate equivalent (LCE) inferred mineral resources in Alberta, Canada. As outlined in E3 Lithium’s Preliminary Economic Assessment, the Clearwater Lithium Project has an NPV8% of $1.1 Billion with a 32% IRR pre-tax and $820 Million with a 27% IRR after-tax.
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