Progressing global lithium projects

By Cameron Perks
Published: Thursday, 27 April 2017

After a couple of fallow years when there was insufficient investor interest to take projects forward, last year’s surge in lithium prices and projections for battery demand growth has given a boost to new and dormant lithium developments around the world. Cameron Perks, IM Correspondent, looks at some of the most advanced operations.

There are currently over 400 individual lithium projects scattered across the world, both green and brownfield developments, established or revived in response to the projected sharp rise in global lithium demand. 

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Current global lithium demand is estimated to be around 200,000 tpa lithium carbonate equivalent (LCE) but is expected to rise to somewhere between 400,000 and 600,000 tpa by 2021. 

As an historic producer of lithium, it is not surprising that Australia has been one of the first countries to react to the lithium market’s glowing prospects.

So far in 2017, around 90,000 tonnes spodumene has left Australia, mainly bound for China. 

Australia is home to more than 100 lithium projects, most of which are concentrated in Western Australia (WA), consisting of pegmatitic deposits. The most promising deposits are spodumene-rich, but there are also mica-rich deposits as well as potential brine deposits in the south of the country.

After refurbishing and upgrading the past-producing Mt Cattlin operation in WA, ASX-listed Galaxy Resources Ltd restarted mining at the site in 2016. In January 2017, the company announced it had just shipped approximately 10,000 tonnes of lithium concentrate. A second shipment of 13,950 tonnes was despatched March.

Fellow Australian producer Neometals Ltd’s Mt Marion project, also in WA, was the first real newcomer to Australian lithium production. Neometals, which has a minority stake in the mine alongside ASX-listed Mineral Resources Ltd and China’s Ganfeng Lithium Co. Ltd, which each hold 43.1% of Mt Marion, made its maiden shipment of 15,000 tonnes lithium in February. A further 16,662 tonnes of concentrate was shipped in March.

The historic Greenbushes lithium mine in WA, co-owned by Chinese company Sichuan Tianqi Lithium Industries Inc. and US-based Abermarle Corp., which acquired the mine’s long-timer Australian operator Talison Lithium, is estimated to produce around 60,000 tpa LCE. 

The success of Greenbushes has led several hopeful lithium explorers to apply for leases in the surrounding area. Lithium Australia NL, Cullen Exploration Ltd, China Magnesium Corp., Lithium Power International Ltd, Slipstream Resources Investments Ltd, Venus Metals Corporation Ltd and various smaller private companies hold exploration leases within a 10km radius of the Greenbushes mine.

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Figure 1: Cauchari-Olaroz lithium project testing ponds. 
Source: Lithium Americas 

Pilgangoora lithium

Pilbarra Minerals Ltd’s Pilgangoora lithium-tantalum Project, located 120km from Port Hedland in WA, is a spodumene deposit with measured, indicated and inferred resources of 156m tonnes, grading at 1.25% lithium oxide (Li2O).

In June 2016, Pilbara Minerals agreed to jointly progress Lithium Australia’s Sileach processing technology and has since carried out successful testing of spodumene concentrates from Pilgangoora.

The company has been granted a mining lease for Pilgangoora but is still looking to improve its financing and offtake position to fund the project’s construction. Pilbara Minerals currently has an offtake agreement with Chinese supplier General Lithium Haimen Corp. for 40% of Pilgangoora’s initial anticipated output of around 330,000 tpa concentrate, or around 44,000 tpa of LCE, as well as a memorandum of understanding (MoU) with General Lithium, another Chinese firm, to establish a downstream processing joint venture. 

If the project goes ahead according to plan, the 330,000 tpa of concentrate, which includes technical grade material, will be a substantial addition to Chinese imports of spodumene, which Pilbara Minerals has estimated to be around 416,000 tpa of 6% spodumene concentrates.

While the project may take some years to ramp up and iron out any processing issues, the Pilgangoora mine looks set to add substantially to global lithium supply in the foreseeable future.

Adjacent to Pilbara Minerals’ project is another development, also called Pilgangoora, owned by Altura Mining Ltd with measured, indicated and inferred resources of 35.7m tonnes. According to Altura, their project could be in production by early 2018. 

Melbourne-based financial consulting group Beer and Co. estimates that Altura can produce around 50,000 tonnes 6% spodumene concentrates before June 2018 from Pilgangoora, and ramp up to 237,000 tpa by the 2020-21 financial year. 

Altura already has a binding offtake agreement with China-based Lionergy Ltd for 100,000 tpa of 6% Li2O spodumene concentrate for an initial five-year period as well as a non-binding MoU with Optimum Nano Battery Co. Ltd, a Chinese lithium battery and electric vehicle maker.

Developed projects

SQM

Chile’s Sociedad Quimica y Minera SA (SQM) was the world’s largest lithium producer in 2016 with a market share of 29%, and it shows no sign of stopping. The company is taking advantage of strong global demand with lithium prices up 80%, and lithium revenue up 130% year-on-year respectively.

The company obtains lithium brine from the Atacama Salar, Chile, which includes a rough 30 year mine life at current production levels. SQM’s production capacity amounts to 48 ktpy of lithium carbonate, while hydroxide capacity is 6ktpa.

Expansion plans for SQM are focused on Lithium America’s Cauchari Olaroz joint venture project.

FMC

FMC currently sits on one of the world’s best lithium resources, the Salar del Hombre Muerto (SHM) in Argentina, where it extracts relatively high purity, high grade lithium at a production capacity of 23ktpa.

FMC is taking a relatively different approach in expanding its lithium business after committing to triple its lithium hydroxide capacity in May, 2016. The company said in its Q4 2016 earnings call that their "hydroxide expansion will result in a significant increase in volume in 2017" and that they are "confident" that commercial sales will commence in July 2017.

In addition to this, Nemaska Lithium has agreed to supply 8,000 tpa lithium carbonate to FMC beginning in mid-2018 in October 2016, but has since moved this date to the 1st of April 2019. Besides internal expansions, the deal seems crucial for FMC to achieve their expansion commitments. The company has since announced that it intends to "spin-out" their lithium business not before the end of 2018.

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A view from above: the scale of the brine evaporation process needs
to be seen to be believed. Here is an image taken by NASA of FMC’s
salar de Hombre Muerto 
Source: NASA 


Albemarle

Albemarle Lithium, otherwise known as Rockwood Lithium, produces lithium carbonate and lithium hydroxide from the Atacama Salar in Chile as well as from Silver Peak brine, Nevada. In addition, Albemarle also obtains lithium through its part-owned spodumene mining operation at Greenbushes, Western Australia.

Albermarle has said that it plans to grow its total combined LCE production to around 165,000 tpa in the next 10 years, helped along by doubling lithium concentrate from Greenbushes some time after construction begins in Q2 2019. The company plans to bring on 10,000 tpa LCE this year, the majority of which will come from its Chilean La Negra facility. 

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Ready to load: a shipment of spodumene from Tianqi Lithium’s
Greenbushes mine in WA. 
Talison 


International lithium projects

Argentina

Galaxy Resources is looking to use cash-flow from Mt Cattlin to develop the Sal De Vida lithium brine project in Argentina, with initial site works due to start this year, including test evaporation ponds, exploratory wells and further processing tests.

In February 2017, Galaxy appointed several leading lithium experts to help it begin the project.

Chilean industry heavyweight Sociedad Quimica y Minera (SQM) last year paid $25m for a 50% stake in Canada-based Lithium Americas’ Cauchari-Olaroz lithium brine project in Argentina.  

In January 2017, the company revealed that GFL International Co. Ltd, part of China’s Ganfeng, had agreed to invest $174m in the project in order to secure an offtake share of production. In the same month, Thai petroleum refiner the Bangchak Petroleum Public Co. Ltd announced it would contribute $112m for a 16.4% stake in Lithium Americas and provide an $80m debt facility for the construction of Cauchari-Olaroz.

The deal also gives Bangchak the right to purchase, at market prices, 15% of Cauchari-Olaroz’s lithium carbonate produced during the 25,000 tpa first phase of the project.

Lithium Americas is aiming to start construction of Cauchari-Olaroz in the first half of this year, with production due to start in 2019.

Canadian junior Enirgi Group Corp., through its local subsidiary ADY Resources, has begun developing the Salar del Rincon lithium property – a fairly advanced in Argentina’s Salta province, for which the company is working on a direct extraction processing technology in order to extract lithium from raw, concentrated brine in less than 24 hours.

Despite concerns over high magnesium and low lithium concentrations in the brine, the company has demonstrated the viability of its process through work conducted by the Australian Nuclear Science and Technology Organisation (ANSTO). 

Enirgi had planned to begin construction of a 50,000 tpa LCE plant at Salar del Rincon in 2015 and begin production in 2017, but a downturn in the global mining cycle and a lack of cash for exploration set the company’s schedule back. It is now looking to produce its first 50,000 tonnes LCE in 2019, subject to funding and receipt of necessary approvals. 

Canada and US

Critical Elements Corp. is in the advanced exploration stage at its hard rock spodumene and lepidolite Rose lithium-tantalum project in Quebec, Canada.

In April this year, the company announced that pilot plant tests on Rose spodumene had produced concentrate grading up to 6.56% Li2O, with recoveries of up to 83.4%. 

Rose is estimated to contain 26.5m tonnes of indicated resources at 1.30% Li2O equivalent, or around 642,000 tonnes LCE.

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Figure 2: Contour map of lithium-bearing formation 
waters in west-central Alberta, Canada. 
ERCB/AGS Open File Report 2011-10 

The company hopes to begin producing spodumene by 2019 or 2020 and to enter the battery grade lithium carbonate market by 2022 or 2023.

Fellow Canadian company Nemaska Lithium Inc. has already began trialling production methods using ore from its 32.9m tonne measured, indicated and inferred Whabouchi project in Quebec, with around 1,200 tonnes of ore having been so far fed successfully into the dense media separation plant. 

The company intends to send samples of lithium hydroxide to global customers by mid-2017 and last year signed an agreement with US lithium-producer FMC Corp. to supply it with lithium carbonate once in production. 

The agreement was amended in March this year to allow for the company to extend the timeline for supply to no later than 1 April 2019, from a previously deadline of mid-2018". The company insisted that it is on track to commence the commissioning of the Shawinigan Hydromet Plant during the second half of next year and said that FMC would make a $10m payment in April towards the deal. 

In the US, MGX Minerals is in the bulk sample and pilot plant design optimisation phase of developing a project to extract lithium from petrolithium waste brines originating in Alberta, Canada and is also looking to source brines from the US states of Utah Colorado, Texas and Arkansas.  

The possibility of producing lithium from wastewater yielded from petrochemical production was identified decades ago. The Smackover Brine in Arkansas was acknowledged as a potential source of lithium as early as the 1970s, but it is only recently that technology has started to catch up with the opportunity. Early studies such as Dang & Steinberg (1978), spurned by a perceived rise in future lithium battery usage, determined the concentrations from this brine in several locations, determining that it could represent a substantial reserve, and even proposed methods to extract lithium from this source.

Progress in this area has inspired other companies, including Canada-headquartered Power Metals Corp., to invest in developing petrolithium.

IM Research recently published its Global Lithium Market Report, which includes details on the latest supply, demand and processing trends. For more information, see the brochure here.