This Week in Critical Minerals - #1
This Week in Critical Minerals - #1
Lithium drill results, Indonesia's nickel industry, US pushback to Chinese batteries, and more
Welcome to It’s Time to Mine. This newsletter covers the mining and resource processing projects and technologies being built around the world. A weekly roundup of mineral-related news is posted at the end of each week, with additional newsletters going in-depth on specific topics.
Thank you for joining me! Let’s dig into it.
Lithium
Patriot Battery Metals releases positive drill results
On Wednesday, January 18th, Patriot Battery Metals announced positive results from its Corvette lithium project in the James Bay region of Quebec. The results included a 156.9 m interval of 2.12% Li2O including 25.0 m of Li2O from one of its drill holes (CV22-083). These results were outstanding, causing shares of the company to surge more than 20% since the announcement. The property’s geology is of lithium pegmatite (a coarse igneous rock), with six outcrops/clusters discovered in a linear arrangement. Exploration is continuing east along this trend spanning more than 20 km as they work to release an initial mineral resource estimate in the first half of this year.
Sigma Lithium increases mineral reserves
On Thursday, January 19th, Sigma Lithium filed a technical report supporting its December announcement of a 60% increase is mineral reserves, bringing the company’s NPV up to $15.3B. With the latest announcement, Sigma claims it would be producing 104 kt of LCE (lithium carbonate equivalent) in 2024, making it the fourth largest lithium producer in the world, after SQM, Albemarle, and Mineral Resources. The company operates a project in southeast Brazil, where production on its phase 1 mining operations is expected to begin in the first half of this year. Phase 2 and 3 (which comprise the latest announcement) could start production as soon as 2024. A dense media separator production plant is also being constructed on site, taking the company’s spodumene ore exclusively as feedstock to produce battery-grade lithium-concentrate. The company recently secured $100MM in debt financing and has signed an offtake agreement with LG Energy Solution.
CATL to develop Bolivian lithium production
Bolivian President Luis Arce announced that a Chinese consortium including CATL (largest battery producer in the world) would invest more than $1B to develop two lithium plants in the country using direct lithium extraction technology. This consortium beat out 5 other firms in the bidding process, including US-based Lilac Solutions and Russian Uranium One Group. Bolivia is a part of the “lithium triangle” also including Argentina and Chile which contains more than half the world’s lithium. Though Bolivia contains some of the largest lithium reserves in its vast salt flats, there is little production of the mineral in the country.
Nickel
BASF/Eramet to build Indonesian processing plant
Indonesian officials announced that German chemical conglomerate BASF and French mining company Eramet are finalizing a $2.6B deal to build a nickel processing facility for EV batteries. The plant would use Indonesian nickel from Eramet’s mine in Weda Bay to produce mixed hydroxide precipitate using a high-pressure acid leach process. Indonesia is rapidly growing as a hub for EV supply chains as BYD and Tesla are finalizing deals to construct EV factories in the country.
Nickel Industries raises $471MM
Australia-based Nickel Industries announced on Wednesday a capital raise of $471MM to invest in nickel projects in Indonesia, as the company transitions its focus from the stainless steel market to battery-grade nickel. $270MM of the financing is from Newstride Development, a subsidiary of Chinese nickel and stainless steel giant Tsingshan Holdings. This $270MM is being used to buy 10% of PT Huayue Nickel Cobalt, an asset owned by Newstride. A further $70MM is purchasing an additional 10% of Oracle Nickel, an asset the company previously bought 70% of from Shanghai Decent for $371MM in November 2021. The institutional placement and Newstride investment show continued interest in Indonesian nickel resources.
Talon Metals finds new system of nickel mineralization
Talon Metals announced on Thursday that they have intercepted high-grade nickel-copper mineralization two miles outside the current resource area at the Tamarack Nickel Project in central Minnesota. Talon is the majority shareholder of Tamarack, in a joint venture with Rio Tinto. They are currently focused on expanding their high-grade nickel mineralization resource by drilling both infill and outside the current resource area and developing a mine plan to submit to regulators. This discovery could increase Talon’s nickel reserves substantially. The company also has a supply agreement with Tesla, and when in production would be only the second operating nickel mine in the US (the other being Eagle Mine, located in Michigan).
Cobalt
US State Department signs MOU with DRC and Zambia
On Wednesday, the US State Department released a signed MOU with Zambia and the Democratic Republic of the Congo (DRC) pledging to “cooperate in feasibility studies, consultancies, and technical assistance opportunities” in undertaking projects critical to EV supply chains. This is just a signed agreement, and no partnerships or ventures have resulted from this yet, but further collaboration between the US and the DRC/Zambia could lead to increased strength of US supply chains and influence in that part of the world, potentially lessening the corruption and human rights abuses that have plagued cobalt mining in the region for decades. Cobalt is a metal critical to battery cathodes, but there is intense research looking into reducing and eliminating its use from mainstream lithium ion batteries. The DRC currently produces 70% of the world’s supply of cobalt.
Rare Earths
Australian govt provides A$220MM REEs loan
On Tuesday, the Australian government announced that the Northern Australia Infrastructure Facility (NAIF) will increase a loan to Hastings Technology Metals from A$140MM to A$220MM for the development of its Yangibana rare earths mine and processing plant in Western Australia. The loan increase reflects rising costs and the strength of the rare earth magnet market. The project contains neodymium and praseodymium resources, elements integral to permanent magnets for electric vehicles. Australia is currently the 4th largest producer of rare earths (after China, US, and Myanmar). Hastings joins Australian companies Lynas Rare Earths and Iluka Resources developing an ex-China rare earths supply chain.
Batteries
Britishvolt collapses
Britishvolt entered Administration on Tuesday as a last-ditch attempt by shareholders to save the company failed, marking the end of the UK’s first major battery producer. Without significant IP or large orders from automakers (and few domestic auto manufacturers), the company struggled to raise money to build their site. Many have criticized the UK government’s approach to incentives, which was to give the company £100MM contingent on construction starting. Other countries offer support much earlier because by the time construction commences, government financial support may not be needed. The business, once valued at more than £700MM, could sell for less than £10MM.
Ford-CATL plant: “a Trojan Horse”
Virginia Governor Glenn Youngkin has rejected a proposed $3.6B battery plant proposal put forth by CATL in collaboration with Ford. In addition to calling the plant a “front for the Chinese Communist party,” Youngkin also said that the investment would undermine the intent of the Inflation Reduction Act, which would provide subsidies to companies producing batteries in the United States. CATL and Ford are still looking for a site in which to make the investment, with Michigan now being a top contender. CATL is a supplier to Tesla and soon Honda (in addition to Ford). Though it does not have any production in North America, CATL recently opened a factory in Germany to complement production across China.
“We have other interests in the site. I’d much rather have a good clean deal than one that’s embroiled in controversy and one that is going to promote the Chinese Communist party.” - Glenn Youngkin on Bloomberg, 20 Jan 2023
That’s all for this week. Thank you for reading, and if you have not yet, please consider subscribing.
- Teddy