Graphite and lithium booths at the Prospectors
and Developers Association of Canada (PDAC) 2015 conference in
Toronto, Canada this year were party to a different atmosphere
than the broadly depressed sentiment expressed by many other
The 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 feel for development,
financing and pricing.
Referring to 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.
While lithium and graphite have struggled in the
financing downturn, the two minerals have received extra
interest owing to their consumption in the growing battery
This excitement was supercharged by Tesla Motors
Inc.’s announcement during 2014’s
PDAC that it would build a Gigafactory in Nevada US, tasked
with producing large volumes of lithium-ion (Li-ion)
The PDAC 2015 conference in
Commerce Resources Corp.
Grid storage vs EVs
For lithium, the debate at the conference was not
about supply or financing, but rather where the extra demand
would come from.
Stria Lithium Inc.’s chief operating
officer, Julien Davy, told IM that the biggest
short term demand would come from the "unglamorous" grid
storage industry, while Pure Energy Minerals Ltd director
Jeremy Poirier and TSX-V-listed Nemaska Lithium’s
CEO, Guy Bourassa said that the primary growth driver would be
electric vehicles (EVs).
Poirier and Bourassa focused on the excitement
and the expected automotive industry shift, with Poirer noting
the recent launch of General Motors Inc.’s new
Davy, 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, which must make
an active decision on purchasing an EV over petrol and diesel
Davy’s conservatism on EV growth is
due to the perceived sentiment of the consumer market
– which is personal, not business related. "If EVs can
take off, manufacturers need to prove that long distance use is
possible, and that battery power is a viable alternative to
using conventional fuels, to vehicle customers," he told
"Tesla will need to make an announcement this
year," he said, adding that what the amount of battery mineral
consumption on the table from Tesla will be, and from where
this will be sourced are important investor questions.
The energy grid storage solution end market is
also hard to quantify in terms of demand, he told
"The power industry is generally run by big,
multi-billion dollar capex companies, which are relatively
private about their demand projections," Davy said.
Mining and mining services
companies set out their stalls at PDAC
Purity and processing are
Davy told IM that his
company’s value lies in its processing technology,
which allows for low cost production of lithium (Li) using a
chlorination process from spodumene. This lithium metal can be
transported in mineral oil, Davy confirmed, or converted via
simple reactions to lithium carbonate or hydroxide.
The process can take spodumene ore material and
create "four nines", or 99.99% pure lithium, which increases in
value by almost double, to $15,500/tonne from "three nines"
pure lithium metal, at 99.9% Li.
"Purity is key – the processing is where
the value is," Davy told IM. "The higher the
purity of battery mineral ingredients, the higher the
performance, longevity and efficiency of the end product
"We will also simplify our business model by
offering the processing technology to others under a licensing
agreement; we may also purchase this material post-production
and find the customers ourselves," Davy added.
Focus Graphite Inc’s vice president
of project development, Jeff Hussey, told IM
that similar demands of purity are being demanded in the
battery-destined graphite industry.
"Heading straight for a 98% C graphite product
from all flake sizes is advantageous," he said.
It can be less difficult to produce high purity
graphite products from higher flake sizes but the distribution
of the impurities in the Lac Knife resource in Quebec and the
lack of need for specific processing items mean that Focus can
produce the higher grade material from all mesh sizes, Hussey
Further to this, the company is able to produce
"five nines", or 99.999% C spherical graphite for the battery
market, with a higher performance than is achievable with
synthetic graphite. "We can prove that irreversible capacity
loss at first charge is lower with our material," he told