Most commodities are
presently operating in a depressed market and financing
environment. Lithium and graphite, and now to a lesser extent
rare earths, are receiving interest that other minerals are
not, owing to excitement in electric vehicles (EVs), grid
storage solutions and high tech industries. However, even
considering the extra attention, times are hard for battery
Graphite and lithium
booths at the Prospectors and Developers Association of Canada
(PDAC) 2015 conference in Toronto, Canada this week were party
to a different atmosphere than the broadly depressed one
experienced by many other exhibitors.
relative level of interest in battery mineral projects,
compared with properties in both the industrial minerals and
wider metallic mineral commodity markets was noticeably higher,
with a more positive development, financing and pricing feel
being present at the conference for these minerals.
to other struggling companies in other commodities which are
circling the bankruptcy drain, one developer told IM that graphite
and lithium companies are in far better shape, and are unlikely
to experience the woes of the wider mining industry.
lithium and graphite, and to a lesser extent rare earths
companies, have struggled in the financing downturn relative to
other commodities, the two minerals have received extra
interest in the wake of Tesla Motors Inc.’s
announcement during 2014’s PDAC
would build a Gigafactory in Nevada, tasked with
lithium, the debate at the conference was not about supply or
financing, rather where the extra demand would come from.
Stria’s COO, Julien Davy told IM that the
biggest short term demand would come from the "unglamorous"
grid storage industry, while Pure Energy’s Jeremy
Poirier and Nemaska Lithium’s CEO, Guy Bourassa
said that the primary growth driver would be EVs.
and Bourassa focused on the excitement and expected vehicle
industry shift, with Poirer noting the recent launch of General
Motors Inc.’s new Volt model.
however, said that despite not receiving comparable media
attention, real growth was already being seen in grid storage
batteries, where industrial clients are driven by cost cutting
and business requirements; he contrasted this against an
as yet unconvinced general public who must make an active
decision on purchasing an EV.
also enjoyed some of the buzz from the battery space, though to
a lesser extent than lithium.
junior developer explained to IM that their
company had reduced is costs as much as possible, partially by
only supporting a small executive team, but they remained
positive about the industry and their prospects for supplying a
the positive sentiment was created by a greater interest in
higher purity products by customers, which, in both graphite
and lithium, means higher battery performance, longevity and
efficiency, according to Stria’s Davy.
Focus Graphite Inc. is "basically done, we just need financing
and equity," according to its vice president of corporate
development, Jeff Hussey.
spoke of the importance of purity to spherical graphite
consumers, adding that Focus’ graphite had lower
costs and better performance results than synthetic
juniors, in contrast, need more than just the prospect of a
growing market for their projects to reach production, which
one source told IM has been priced
into the stocks of agrimineral companies for many years
it will be hard for any potash juniors to enter production
without the backing of a major," one potash developer told
of potash (MOP) projects that do not have specific positive
characteristics are unlikely to progress was the consensus by
those attending from the agriminerals sector.
grades, impressive opex figures and well-designed mine plans
are what investors should be looking for," the developer told
they hear a 'b’ for billion after a capex figure,
they stop listening," the source said. "Scaled production and
exploration may be the only viable way forward without a
earths are due for an uptick in investor sentiment owing to
their potential in EVs and other high tech applications, which
have thus far only translated to excitement in lithium and
graphite, sources told IM.
rare earths projects following Molycorp and Lynas Corp. have no
chance of success, it was agreed, but companies with effective
and cheap processing methods and a heavy rare earth favourable
deposit will have greater development chances, delegates
shift towards light emitting diode (LED) lighting and related
fall in phosphorescent tubing lighting use, europium may lose
its crown as the top-priced rare earth, one developer told
of interest in the industry is now shifting to the rare earths
most consumed in magnets, most of all dysprosium.
(frac) sand, which was riding a large wave of interest until
late last year, had an outlook of cautious optimism, despite
the fall in oil prices
became one of the largest stories of 2014.
Silica’s deputy project director, Laird Tomalty,
that despite the fall in oil price, frac sand companies would
be protected by rising per-well consumption — which
increases well yield — however, he said that this was
a hard story to get across to investors.
to this, he imagined that fracking could displace Saudi Arabia
as the "swing producer" of the oil industry, owing to each
well’s smaller production volumes and faster
depletion being ideal for short term production.
falling oil prices have been a cause for concern for oilfield
mineral producers, so far, frac sand sales have held