Lithium Market Shifts on Acquisitions and Promising Lithium Discoveries - Seite 2

Still in Need of More Lithium

The Paris agreement, which came about as a result of the increasing threat of climate change, has spurred many developed markets to promote the replacement of combustion engine vehicles with EVs as well. Coupled with various breakthroughs in eliminating various limitations in li-ion technology, companies like Tesla have been able to speed up the adoption of EVs in markets outside China. So with competition for lithium supplies from EV and electronics manufacturers intensifying, Chinese companies and the government are moving fast to secure lithium resources across the globe. This is especially evident in South America where the majority of active lithium supplies are located. In order to grow output, global mining concerns are investing huge amounts of money.

Most recently, Chinese mining company Tianqi Lithium acquired a 24% stake in Chilean company SQM, with further intentions to invest $525 million to expand refining facilities. This is expected to increase annual output of lithium carbonate by nearly four times from the current 48,000 tons to 180,000 in three years.

Companies from other countries are also positioning themselves for the inevitable demand crisis. In Argentina, American chemical maker FMC is expected to inject $300 million by 2019 in the hope of doubling lithium carbonate output to 40,000 tons. NRG Metals Inc. has seen a caravan of companies looking to capitalize on the high grade lithium emerging in this region. Both FMC's producing Fenix mine and Galaxy Resources' Sal de Vida development stage project are in close proximity to NRG Metal's project in northern Argentina.

NRG Metals just published assays from the drilling program on its Hombre Muerto Norte project that include some very important results collected over the first 100 meters of the hole, including average 905 mg/l lithium with a low Mg to Li ratio of 3.0 to 1.0. These are significantly above expectations for this salar (brine type deposit) and have industry peers watching NRG as even more results emerge from drilling.

Not to miss a beat, a recognized Chinese battery material producer closed on a $1.4 million private placement with NRG Metals to fund ongoing exploration activities in Argentina and the potential, as an Off-Take producer, for future lithium products extracted. In this scenario, NRG Metals could end up selling its lithium before it's mined.