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Cadence Minerals (KDNC) – Bacanora Lithium (BCN) Update on Strategic Investment by Ganfeng Lithium.

Cadence Minerals (AIM/NEX: KDNC; OTC: KDNCY) is pleased to note the update published today by Bacanora Lithium (AIM:BCN) (“Bacanora”) on its Investment Agreement and Offtake Agreement (‘the Strategic Investment’ or ‘the Agreements’) with leading global lithium company Ganfeng Lithium Co., Ltd. (“Ganfeng” or “GFL”). As announced on 28 June 2019, the signed Agreements have been submitted to the relevant authorities in China for approval and completion.  The first of the approvals, from the PRC Ministry of Commerce, has now been received. The remaining two approvals required ahead of completion of the Strategic Investment are currently being processed by Ganfeng and further updates will be provided as the approval process proceeds. 

Bacanora is a lithium exploration and development company. Cadence holds 30% of Mexalit and Megalit joint venture companies and approximately 0.5% of Bacanora’s equity. Mexalit is the owner of the El Sauz, El Sauz 1, El Sauz 2, Fleur and Fleur 1 mineral concessions, which forms part of the 20-year mine plan of the Sonora Lithium Project in Northern Mexico.

Completion of the Strategic Investment would form a major part of the Bacanora’s finance package for an initial 17,500 tonnes per annum lithium carbonate operation at the large scale, high grade Sonora Project in Mexico.  For further details of the Agreements please refer to the Company’s announcement on 20 May 2019, however the key terms of the Strategic Investment are provided below:

Summary of Key Terms of the Ganfeng Strategic Investment:

  • GFL to acquire 29.99% of Bacanora
  • GFL to acquire 22.5% of Sonora Lithium Ltd (“SLL”), the holding company for the Sonora Lithium Project
  • Additional long-term offtake at a market-based price per tonne
    • 50% of Stage 1 lithium production
    • Up to 75% of Stage 2 lithium production

About GFL

GFL is the world’s third largest and China’s largest lithium compounds producer and the world’s largest lithium metals producer in terms of production capacity as of 31 December 2017, according to CRU International Limited.  GFL’s operations are vertically integrated, encompassing all critical stages of the value chain, including upstream lithium extraction, midstream lithium compounds and metals processing as well as downstream lithium battery production and recycling.  GFL has one of the most comprehensive product offerings split into five major categories of more than 40 lithium compounds and metals products.

The full release can be found at: https://www.londonstockexchange.com/exchange/news/market-news/market-news-detail/BCN/14171449.html

This announcement contains inside information for the purposes of Article 7 of EU Regulation 596/2014. 

Restructuring of Outstanding Loan Note

As announced on the 15 July 2019 Cadence had restructured two of its three outstanding Amortising Loan Notes (http://irservices.netbuilder.com/ir/cadence/newsArticle.php?ST=REM&id=2842635) and was finalising terms to fund the balance of the Amortising Loan Note. Cadence is pleased to announce it has now completed the restructuring of the third Amortising loan on substantially the same terms as outline in the announcement of 15 July 2019.

In addition, and to, in part, fund the working capital requirements of the Amapá Project, Cadence has drawn down a further US$ 0.5 million of the Convertible Loan Note under the same terms. After this draw down the outstanding balance on the Convertible Loan Note is US$3.98 million. Which is comprised of US$2.29 million of the restructured Amortising Loan notes plus a total of US$1.75 million of additional drawdowns. The note is secured over the Company’s assets.

– Ends –

 

For further information:

Cadence Minerals plc                                                    +44 (0) 207 440 0647
Andrew Suckling  
Kiran Morzaria  
   
WH Ireland Limited (NOMAD & Broker)                                 +44 (0) 207 220 1666
James Joyce  
James Sinclair-Ford  
   
Novum Securities Limited (Joint Broker)                                 +44 (0) 207 399 9400
Jon Belliss  

 

 

Qualified Person

Kiran Morzaria B.Eng. (ACSM), MBA, has reviewed and approved the information contained in this announcement. Kiran holds a Bachelor of Engineering (Industrial Geology) from the Camborne School of Mines and an MBA (Finance) from CASS Business School.

  

Forward-Looking Statements:

Certain statements in this announcement are or may be deemed to be forward-looking statements. Forward-looking statements are identified by their use of terms and phrases such as ”believe” ”could” “should” ”envisage” ”estimate” ”intend” ”may” ”plan” ”will” or the negative of those variations or comparable expressions including references to assumptions. These forward-looking statements are not based on historical facts but rather on the Directors’ current expectations and assumptions regarding the Company’s future growth results of operations performance future capital and other expenditures (including the amount. nature and sources of funding thereof) competitive advantages business prospects and opportunities. Such forward-looking statements reflect the Directors’ current beliefs and assumptions and are based on information currently available to the Directors.  Many factors could cause actual results to differ materially from the results discussed in the forward-looking statements including risks associated with vulnerability to general economic and business conditions competition environmental and other regulatory changes actions by governmental authorities the availability of capital markets reliance on key personnel uninsured and underinsured losses and other factors many of which are beyond the control of the Company. Although any forward-looking statements contained in this announcement are based upon what the Directors believe to be reasonable assumptions. The Company cannot assure investors that actual results will be consistent with such forward-looking statements.

 

For further information:

Cadence Minerals plc                                                    +44 (0) 207 440 0647
Andrew Suckling  
Kiran Morzaria  
   
WH Ireland Limited (NOMAD & Broker)                                 +44 (0) 207 220 1666
James Joyce  
James Sinclair-Ford  
   
Novum Securities Limited (Joint Broker)                                 +44 (0) 207 399 9400
Jon Belliss  

 

 

Qualified Person

Kiran Morzaria B.Eng. (ACSM), MBA, has reviewed and approved the information contained in this announcement. Kiran holds a Bachelor of Engineering (Industrial Geology) from the Camborne School of Mines and an MBA (Finance) from CASS Business School.

  

Forward-Looking Statements:

Certain statements in this announcement are or may be deemed to be forward-looking statements. Forward-looking statements are identified by their use of terms and phrases such as ”believe” ”could” “should” ”envisage” ”estimate” ”intend” ”may” ”plan” ”will” or the negative of those variations or comparable expressions including references to assumptions. These forward-looking statements are not based on historical facts but rather on the Directors’ current expectations and assumptions regarding the Company’s future growth results of operations performance future capital and other expenditures (including the amount. nature and sources of funding thereof) competitive advantages business prospects and opportunities. Such forward-looking statements reflect the Directors’ current beliefs and assumptions and are based on information currently available to the Directors.  Many factors could cause actual results to differ materially from the results discussed in the forward-looking statements including risks associated with vulnerability to general economic and business conditions competition environmental and other regulatory changes actions by governmental authorities the availability of capital markets reliance on key personnel uninsured and underinsured losses and other factors many of which are beyond the control of the Company. Although any forward-looking statements contained in this announcement are based upon what the Directors believe to be reasonable assumptions. The Company cannot assure investors that actual results will be consistent with such forward-looking statements.

 

Europe Thinks Like China in Building Its Own Battery Industry – Bloomberg

Article by Bloomberg – July 3rd 2019

  •  Governments working with industry and banks to spur technology
  •  At least $113 billion to be invested in battery supply chain

The European Union is starting to act like China when it comes to building the batteries that will drive the next generation of cars and trucks.

In the past few months, government officials led by European Commission Vice President Maros Sefcovic have joined with manufacturers, development banks and commercial lenders on measures that will channel more than 100 billion euros ($113 billion) into a supply chain for the lithium-ion packs that will power electric cars.

Germany and France are prodding for action out of concern that China is racing ahead in new technologies sweeping the auto industry. With 13.8 million jobs representing 6.1% of employment linked to traditional auto manufacturing in the EU, authorities want to ensure that manufacturers can pivot toward supplying electric cars and batteries.

“We are walking the talk,” Sefcovic said in remarks to Bloomberg. “We have overcome an initial resignation that this battle would be a lost one for Europe.”

A number of trends are catalyzing the program, starting with the determination by EU nations to rein in greenhouse gases and fight climate change. They’re increasingly focused on reducing pollution from diesel engines and alarmed at the head start Chinese companies have in greener technologies. French President Emmanuel Macron in February said he “cannot be happy with a situation where 100% of the batteries of my electric vehicles are produced in Asia.”

Drive Trains Go Electric

Global long-term passenger vehicle sales by drivetrain

About 57% of cars will be driven by batteries by 2040, according to BloombergNEF research.

So far, the EU’s program is starting to work and putting Europe on track to wrest market share away from China. By 2025, European companies that currently lack a single large battery maker will rival the U.S. in terms of capacity, according to forecasts from BloombergNEF. Measures that will spur investment include:

  • France and Germany are working on measures to channel billions of euros into the battery industry. Sefcovic has said the EC may be able to embrace the state-aid proposal as a special project by the end of October. The two nations are seeking to draw in additional support from Spain, Sweden and Poland.
  • The European Investment Bank gave preliminary approval in May to a 350 million-euro loan supporting NorthVolt AB’s bid to build a battery gigafactory in Sweden after the company completed a fund raising.
  • The EIB along with the European Bank for Reconstruction & Development are working on a “raw materials investment facility” that will help to build a supply chain for rare Earth metals needed for batteries, according to Sefcovic who says he hopes the program will be launched by the end of the year.
  • The EU in May started a 100 million-euro Breakthrough Energy Ventures fund with Microsoft Corp. founder Bill Gates and other investors to advance the energy transition, which is likely to include batteries.
  • The EC has gathered at least 260 industrial companies including Peugeot SATotal SA and Siemens AG in an alliance aimed at building capacity to make the energy storage devices in Europe.

“A year or two ago, everyone was under the impression that it was already too late for Europe,” said James Frith, an energy storage analyst at BloombergNEF in London. “But they’ve made a commitment, and Europe is in a strong position now.”

By 2025, Europe may control 11% of global battery cell manufacturing capacity, up from 4% now, according to Frith. That will pare back China’s market share and rival the U.S. command of the industry. The EC estimates the battery market may be worth 250 billion euros a year by then. It estimates at least 100 billion euros already has been committed to battery factories or their suppliers in Europe.

 

relates to Europe Thinks Like China in Building Its Own Battery Industry

Europe’s market share in battery making is set to grow to 11% by 2025 from 4% this year. Source: BloombergNEF

The goal is to build enterprises in Europe that could supply the region’s automakers without requiring imports from the major battery manufacturing centers in Asia. Currently, Contemporary Amperex Technology Co., or CATL, and BYD Co. dominate production in China. Elon Musk’s Tesla Inc. is also building battery gigafactories in the U.S.

So far, Europe has no established battery supply chain, though it has drawn investment in local factories from Korean firms including LG Chem Ltd. and Samsung SDI Co.as well as CATL.

The new ambition of the commission is to stimulate companies big enough to supply the likes of BMW AG and Volkswagen AG, which plan a massive increase in electric car production. Across the industry, the outlook is for a rising portion of cars to run on batteries in the coming years.

 

EV forecasts at-a-glance

No single company will get the lion’s share of the investment or aid. Instead, dozens will benefit in addition to Peugeot and Total, which are building a cell plant in Kaiserslautern, Germany. Funds will also trickle into suppliers of parts or raw materials including Siemens, Umicore SASolvay SA and Manz AG.

Scarred by losing control of the solar industry in the last decade, Germany is leading the push. The nation was the biggest producer of solar cells in the early 2000s before Chinese companies backed by government loans took the lead.

When it comes to batteries, Economy and Energy Minister Peter Altmaier is focused on the 800,000 jobs in Germany tied directly to car manufacturing. Batteries account for about a third of the value of an electric car, and without facilities to make those in Europe, more jobs will go to Asia, Altmaier has said.

“There’s going to be huge demand in Europe for battery cells,” Altmaier said on ARD Television in June. “We must have the ambition to build the best battery cells in the world in Europe and Germany.”

Sefcovic envisions 10 or 20 “gigafactories” making battery cells across Europe and with his support the European Battery Alliance is seeking to coordinate research that will be the foundation of the plan. NorthVolt intends to be one of the major battery makers, feeding BMW and other major automakers.

“If we want to be one of the major manufacturers in Europe by 2030 we need to build about 150 gigawatt-hours of capacity,’’ said NorthVolt Chief Executive Officer Peter Carlsson. “The customer demand is so strong that we are accelerating our plans. We have taken a huge step on the way to create a new Swedish industry that will have a big impact in cutting our dependence of fossil fuels.’’

 

Volkswagen plans 22 million electric vehicles in ten years

  • Almost 70 new electric models by 2028 – instead of the 50 previously planned
  • Comprehensive decarbonization program for the Volkswagen Group signed off
  • Volkswagen Group targeting fully CO2-neutral balance by 2050
  • Diess: “Volkswagen will change radically. We are taking on responsibility with regard to the key trends of the future – particularly in connection with climate protection.”

The Volkswagen Group is forging ahead with the fundamental change of system in individual mobility and systematically aligning with electric drives. The Group is planning to launch almost 70 new electric models in the next ten years – instead of the 50 previously planned. As a result, the projected number of vehicles to be built on the Group’s electric platforms in the next decade will increase from 15 million to 22 million. Expanding e-mobility is an important building block on the road to a CO2-neutral balance. Volkswagen has signed off a comprehensive decarbonization program aimed at achieving a fully CO2-neutral balance in all areas from fleet to production to administration by 2050. Volkswagen is thus fully committed to the Paris climate targets.

Dr. Herbert Diess, CEO of Volkswagen AG, said: “Volkswagen is taking on responsibility with regard to the key trends of the future – particularly in connection with climate protection. The targets of the Paris Agreement are our yardstick. We will be systematically aligning production and other stages in the value chain to CO2 neutrality in the coming years. That is how we will be making our contribution towards limiting global warming. Volkswagen is seeking to provide individual mobility for millions of people for years to come – individual mobility that is safer, cleaner and fully connected. In order to shoulder the investments needed for the electric offensive we must make further improvements in efficiency and performance in all areas.”

The Volkswagen Group has set milestones in all areas to be achieved in the coming years on the road to complete decarbonization by 2050. The measures follow three principles: first, effective and sustainable CO2 reduction. Second, switch to renewable energy sources for power supply. Third, compensate for remaining emissions that cannot be avoided. In order to improve the CO2 balance of vehicles throughout their lifecycle, for example, Volkswagen has already made a start on the supply chain. A detailed roadmap is currently being drawn up. There is particularly significant potential as regards steel and aluminum supplies.

The 2025 target is to reduce the CO2 footprint of the vehicle fleet by 30 percent across the lifecycle compared to 2015. Volkswagen is therefore electrifying the vehicle portfolio, with investment in this area alone amounting to more than €30 billion by 2023. The share of electric vehicles in the Group fleet is to rise to at least 40 percent by 2030. The first of the new-generation electric vehicles go into production this year: the AUDI e-tron will be followed by the Porsche Taycan. Reservations for each of these models already total 20,000 units. And electric vehicles will be brought into the mainstream with the ramp up of the Volkswagen ID. Other models in this first wave will be the ID. CROZZ, the SEAT el-born, the ŠKODA Vision E, the ID. BUZZ , and the ID. VIZZION.

In order to support the electric offensive, LG Chem, SKI, CATL and Samsung were selected as strategic battery cell suppliers. In view of the constantly increasing demand, Volkswagen is also taking a close look at possible participation in battery cell manufacturing facilities in Europe. Looking further ahead, solid-state batteries also have great potential. The goal is to enable an industrial level of production with this technology together with our partner QuantumScape.

At the same time, CO2 emissions at all plants are to be cut 50 percent by 2025 compared with 2010. The conversion of the power station in Wolfsburg from coal to gas will reduce CO2 emissions by 1.5 million tonnes annually from 2023 onwards. Audi’s production activities at the Brussels site, for example, are already completely CO2-neutral. The Zwickau plant will not only be the lead factory for the Modular Electric Drive Toolkit (MEB); the ID. built there will be delivered to customers with a CO2-neutral balance.

The MEB lies at the heart of Volkswagen’s electric offensive. The cost of e-mobility can be significantly lowered through partnerships to enable the widest possible spread of the MEB and the associated economies of scale. That makes individual mobility affordable and usable for the mainstream in the future as well. One example of such a partnership is the planned cooperation with Aachen-based e.GO Mobile AG recently announced at the Geneva International Motor Show.

To boost e-mobility further, we will be installing 400 fast-charging stations along Europe’s major roads and highways by 2020 in collaboration with industry partners in IONITY. 100 of these will be located in Germany. That means there will be a station every 120 kilometers. Elli (Electric Life), Volkswagen’s new subsidiary, will also offer wallboxes for charging at home, using green power – initially in Germany. In addition, there will be 3,500 charging points on employee car parks at all plants with further charging opportunities at dealerships.

Cadence Minerals #KDNC – Bacanora Lithium #BCN Signing of Investment and Offtake Agreement with Ganfeng Lithium.

Cadence Minerals (AIM/NEX: KDNC; OTC: KDNCY) is pleased to note the announcement today by Bacanora Lithium (AIM:BCN) (“Bacanora”) that it has signed its Investment Agreement and Offtake Agreement (‘the Strategic Investment’) with Ganfeng Lithium Co., Ltd. (“Ganfeng” or “GFL”), the world’s largest lithium metals producer in terms of production capacity and the world’s third largest lithium compounds producer. Both agreements, which are on substantially the same terms as outlined in the Company’s announcement on 20 May 2019, have now been submitted to the relevant authorities in China for approval and completion. Completion of the Strategic Investment is anticipated by the end of July 2019 and would form a major part of the Company’s finance package for an initial 17,500 tonnes per annum lithium carbonate operation at the large scale, high grade Sonora Project in Mexico.

Bacanora is a lithium exploration and development company. Cadence holds approximately 1.5% of Bacanora’s equity and 30% of Mexalit and Megalit joint venture companies. Mexalit is the owner of the El Sauz, El Sauz 1, El Sauz 2, Fleur and Fleur 1 mineral concessions, which forms part of the 20-year mine plan of the Sonora Lithium Project in Northern Mexico.

Announcement Highlights:

  • Cornerstone strategic investment of 29.99% in Bacanora for £14,400,091
    • GFL has been granted pre-emption rights proportionate to its shareholding in Bacanora.
    • GFL shall appoint one Director to the Board of Bacanora.
  • Project level investment of 22.5% in Sonora Lithium Ltd (“SLL”), the holding company for the Sonora Lithium Project, for £7,563,649.
    • GFL has an option to increase its interest in SLL to up to 50% within 24 months at a valuation based on the share price of Bacanora at the time of subsequent investment.
    • GFL shall appoint one Director to the Board of SLL.
  • Additional long-term offtake at a market-based price per tonne.
    • 50% of Stage 1 lithium production.
    • Up to 75% of Stage 2 lithium production.
  • GFL will complete a review within six months of the EPC engineering design and capital costs of Sonora Lithium Project with a view to reducing costs and accelerating the timetable.

The full release can be found at: https://www.londonstockexchange.com/exchange/news/market-news/market-news-detail/BCN/14129811.html

Cadence Minerals CEO Kiran Morzaria commented:“On behalf of Cadence Minerals, we are delighted to see Bacanora sign this milestone agreement with Ganfeng to develop the Sonora Lithium project. As Bacanora CEO Peter Secker says, Ganfeng’s operational expertise and industrial credibility is a strong endorsement of the Sonora Project’s potential.”

This announcement contains inside information for the purposes of Article 7 of EU Regulation 596/2014.

– Ends –

 

For further information:

Cadence Minerals plc                                                    +44 (0) 207 440 0647
Andrew Suckling
Kiran Morzaria
WH Ireland Limited (NOMAD & Broker)                                 +44 (0) 207 220 1666
James Joyce
James Sinclair-Ford
Novum Securities Limited (Joint Broker)                                 +44 (0) 207 399 9400
Jon Belliss

 

 

Qualified Person

Kiran Morzaria B.Eng. (ACSM), MBA, has reviewed and approved the information contained in this announcement. Kiran holds a Bachelor of Engineering (Industrial Geology) from the Camborne School of Mines and an MBA (Finance) from CASS Business School.

 

Forward-Looking Statements:

Certain statements in this announcement are or may be deemed to be forward-looking statements. Forward-looking statements are identified by their use of terms and phrases such as ”believe” ”could” “should” ”envisage” ”estimate” ”intend” ”may” ”plan” ”will” or the negative of those variations or comparable expressions including references to assumptions. These forward-looking statements are not based on historical facts but rather on the Directors’ current expectations and assumptions regarding the Company’s future growth results of operations performance future capital and other expenditures (including the amount. nature and sources of funding thereof) competitive advantages business prospects and opportunities. Such forward-looking statements reflect the Directors’ current beliefs and assumptions and are based on information currently available to the Directors.  Many factors could cause actual results to differ materially from the results discussed in the forward-looking statements including risks associated with vulnerability to general economic and business conditions competition environmental and other regulatory changes actions by governmental authorities the availability of capital markets reliance on key personnel uninsured and underinsured losses and other factors many of which are beyond the control of the Company. Although any forward-looking statements contained in this announcement are based upon what the Directors believe to be reasonable assumptions. The Company cannot assure investors that actual results will be consistent with such forward-looking statements.

Cadence Minerals #KDNC – Bacanora Lithium #BCN Feasibility Study Estimates €428m NPV and 27.4% IRR for Zinnwald Lithium Project

Cadence Minerals (AIM/NEX: KDNC; OTC: KDNCY) is pleased to note the announcement today by Bacanora Lithium (AIM:BCN) (“Bacanora”) regarding the results of the NI 43-101 Feasibility Study (‘FS’) for the Zinnwald Lithium Project in Germany (‘Zinnwald’ or ‘the Project’) which confirm the positive economics and favourable operating costs for the production of 5,112 tonnes per annum (‘tpa’) (~7,285 tpa LCE) of battery grade Lithium Fluoride (‘LiF’), a high value, downstream product used in the manufacture of lithium battery electrolytes for the European electric vehicle industry.  With a long life of project of 30 years, the FS estimates a pre-tax project Net Present Value (‘NPV’) of €428 million (8% discount rate); an Internal Rate of Return (‘IRR’) of 27.4%; favourable Life of Mine (‘LOM’) operating costs and a 46% EBITDA operating profit margin.

Bacanora is a lithium exploration and development company. Cadence holds approximately 1.7% of Bacanora’s equity and 30% of Mexalit and Megalit joint venture companies. Mexalit is the owner of the El Sauz, El Sauz 1, El Sauz 2, Fleur and Fleur 1 mineral concessions, which forms part of the 20-year mine plan of the Sonora Lithium Project in Northern Mexico.

Announcement Highlights:

Confirmed strong economic potential

  • Estimated Project pre-tax IRR of 27.4%; NPV of €428 million (8% discount rate)
  • Estimated Project post-tax IRR of 21.5%, NPV of €270 million with a project payback of 6.1 years
  • Average LOM annual earnings before interest, taxes, depreciation and amortisation (‘EBITDA’) estimated at €58.5 million per annum
  • Long life project with the 30 year FS mine plan equating to less than 50% of the current identified mineral resources
  • Base case 30 years revenue and EBITDA estimated at €3.86 billion and €1.75 billion respectively

Zinnwald: a significant lithium deposit, strategically positioned in Germany’s industrial heartland

  • Total Mineral Reserve (Proven and Probable) estimate of 31.20 million tonnes (‘Mt’) of ore at a grade of 3,004 ppm containing 94 thousand tonnes (‘kt’) of contained lithium (‘Li’)
  • Demonstrated Mineral Resource (Measured and Indicated) estimate of 35.51 Mt of ore at a lithium grade of 3,519 ppm, containing 125 kt of Li
  • Deutsche Lithium also owns the exploration licences for the lithium deposits of the claims “Falkenhain” and “Altenberg DL” which have the potential to significantly increase Zinnwald’s resource base and Project life
  • Conventional flow sheet uses established sulphate route processing technology
  • Integrated plant designed to process approximately 570,000 tpa of ore (LOM average)
  • Capital cost estimate of €159 million includes mining, processing plant, infrastructure, tailings management, general administration costs as well as the requisite contingencies
  • FS includes sale of 32,000 tpa of by-product potassium sulphate (‘SOP’, ‘K2SO4’) to the European fertiliser industry

Next Steps: advance Zinnwald towards production to satisfy expected continued growth in demand for lithium driven by growing sectors such as electric vehicles and energy storage

  • Subject to Board approvals and other key milestone events, project detailed design is expected to commence in H1 2020

The full release can be found at: https://www.londonstockexchange.com/exchange/news/market-news/market-news-detail/BCN/14098768.html

This announcement contains inside information for the purposes of Article 7 of EU Regulation 596/2014.

– Ends –

 

For further information:

Cadence Minerals plc                                                    +44 (0) 207 440 0647
Andrew Suckling
Kiran Morzaria
WH Ireland Limited (NOMAD & Broker)                                 +44 (0) 207 220 1666
James Joyce
James Sinclair-Ford
Novum Securities Limited (Joint Broker)                                 +44 (0) 207 399 9400
Jon Belliss

 

Qualified Person

Kiran Morzaria B.Eng. (ACSM), MBA, has reviewed and approved the information contained in this announcement. Kiran holds a Bachelor of Engineering (Industrial Geology) from the Camborne School of Mines and an MBA (Finance) from CASS Business School.

Forward-Looking Statements:

Certain statements in this announcement are or may be deemed to be forward-looking statements. Forward-looking statements are identified by their use of terms and phrases such as ”believe” ”could” “should” ”envisage” ”estimate” ”intend” ”may” ”plan” ”will” or the negative of those variations or comparable expressions including references to assumptions. These forward-looking statements are not based on historical facts but rather on the Directors’ current expectations and assumptions regarding the Company’s future growth results of operations performance future capital and other expenditures (including the amount. nature and sources of funding thereof) competitive advantages business prospects and opportunities. Such forward-looking statements reflect the Directors’ current beliefs and assumptions and are based on information currently available to the Directors.  Many factors could cause actual results to differ materially from the results discussed in the forward-looking statements including risks associated with vulnerability to general economic and business conditions competition environmental and other regulatory changes actions by governmental authorities the availability of capital markets reliance on key personnel uninsured and underinsured losses and other factors many of which are beyond the control of the Company. Although any forward-looking statements contained in this announcement are based upon what the Directors believe to be reasonable assumptions. The Company cannot assure investors that actual results will be consistent with such forward-looking statements.

Cadence Minerals #KDNC – Bacanora Lithium #BCN Proposed Strategic Investment by Ganfeng Lithium

Cadence Minerals (AIM/NEX: KDNC; OTC: KDNCY) is pleased to note the announcement today by Bacanora Lithium (AIM:BCN) (“Bacanora”) that it has signed a non-binding Heads of Terms for a strategic investment in both Bacanora and its flagship Sonora Lithium Project (“Sonora” or “Sonora Project”) in Mexico (“the Strategic Investment”) by Ganfeng (“Ganfeng” or “GFL”) , the world’s largest lithium metals producer in terms of production capacity and the world’s third largest lithium compounds producer. Completion of the Strategic Investment would form a major part of the Company’s finance package for the construction of an initial 17,500 tonnes per annum (“tpa”) lithium carbonate (“Li2CO3”) operation at the large scale, high grade Sonora Project. .

Announcement Highlights:

  • Proposed cornerstone strategic investment by top tier global lithium producer Ganfeng at both the corporate and Sonora Lithium Project level.
  • Includes subscription for a 29.99% interest in Bacanora, in addition to an initial 22.5% direct interest in the Sonora Lithium Project with an option to increase up to 50% of the Project.
  • Additional long-term offtake for both Stage 1 and Stage 2 lithium production.
  • GFL would assist Bacanora in the finalisation of the EPC engineering design and the subsequent construction and commissioning of Sonora Lithium Project.
  • Strategy would be in place to ensure project timetable of first production in 2021

As part of the Strategic Investment, GFL would subscribe for a 29.99% equity interest in Bacanora for a cash consideration of £14,400,091, being 57,600,364 new ordinary shares in the Company (the “Private Placement”), at a price of 25 pence per share, representing the volume weighted average price (“VWAP”) on AIM of the Company’s shares over the previous 20 trading days at the time of negotiation. Subject to the completion of the Private Placement, GFL would have the right to nominate one director to the main board of Bacanora.  GFL would also be granted pre-emption rights in relation to new share issues proportionate to its interest in Bacanora.

In addition, as part of the Strategic Investment GFL would be granted the right to acquire an initial 22.5% interest in a subsidiary of Bacanora which holds the Sonora Project (“Project Level Company”), for a cash payment of £7,563,649, equivalent to a price of 25 pence per share on the same basis as the Private Placement (the “Project Level Investment”).  Subject to the completion of the Project Level Investment, GFL would have the right to nominate one director to the board of the Project Level Company.  GFL would also be granted an option to increase its interest in the Project Level Company to up to 50% from 22.5%, within 24 months of the completion of the Project Level Investment.  The valuation of any additional investment in the Project Level Company by GFL would be based on the share price of Bacanora at the time of the additional purchase.

The £14,400,091 capital raised via the Private Placement and the £7,563,649 via the Project Level Investment would be used for the continued development and commercialisation of the Sonora Project. Under the proposed terms of the Strategic Investment, GFL would play an active role in this process. Within 6 months of the Strategic Investment, GFL would complete a review of the current EPC engineering design focusing on reducing the capital cost of the Sonora Project from the current figure of approximately US$420 million and accelerating the construction timetable from that envisioned in the Feasibility Study.  Based on the results of this review, GFL would assist with finalising an EPC engineering contract for the mine and plant construction and would work with Bacanora during the construction, commissioning and early operations phases of the Sonora Project. GFL would also provide a plant and process commissioning team to assist Bacanora in commissioning the Sonora Project.

Conditional on the completion of the Strategic Investment, GFL will be granted exclusive offtake rights to purchase 50% of all lithium products produced at Sonora for the life of the mine during Stage 1 planned production of Li2CO3 (“Offtake Agreement”).  GFL would also have the option to increase its off-take to 75% of all lithium products during Stage 2 of production.  GFL would pay market-based price for every tonne of Li2CO3 sold under the Offtake Agreement.

The Strategic Investment is conditional on, amongst other matters, completion of due diligence, definitive documentation and regulatory approvals.  Further announcements will be made in due course.

The Strategic Investment follows the completion of a Feasibility Study, which confirmed the attractive economics and low operating costs of a 35,000 tpa battery grade (+99.5%) Li2CO3 operation at Sonora: US$1.253 billion pre-tax project Net Present Value (“NPV”), 26.2% Internal Rate of Return (“IRR”), and Life of Mine (“LOM”) operating costs of c.US$4,000/t of Li2CO3 (see announcement dated 13 December 2017).

Bacanora is a lithium exploration and development company. At the end of April 2019 Cadence held approximately 1.6% of Bacanora’s equity and 30% of Mexalit and Megalit joint venture companies. Mexalit is the owner of the El Sauz, El Sauz 1, El Sauz 2, Fleur and Fleur 1 mineral concessions, which forms part of the 20-year mine plan of the Sonora Lithium Project in Northern Mexico.

The full release can be found at: https://www.londonstockexchange.com/exchange/news/market-news/market-news-detail/BCN/14079306.html

This announcement contains inside information for the purposes of Article 7 of EU Regulation 596/2014.

– Ends –

 

For further information:

Cadence Minerals plc                                                    +44 (0) 207 440 0647
Andrew Suckling
Kiran Morzaria
WH Ireland Limited (NOMAD & Broker)                                 +44 (0) 207 220 1666
James Joyce
James Sinclair-Ford
Novum Securities Limited (Joint Broker)                                 +44 (0) 207 399 9400
Jon Belliss

 

Qualified Person

Kiran Morzaria B.Eng. (ACSM), MBA, has reviewed and approved the information contained in this announcement. Kiran holds a Bachelor of Engineering (Industrial Geology) from the Camborne School of Mines and an MBA (Finance) from CASS Business School.  

Forward-Looking Statements:

Certain statements in this announcement are or may be deemed to be forward-looking statements. Forward-looking statements are identified by their use of terms and phrases such as ”believe” ”could” “should” ”envisage” ”estimate” ”intend” ”may” ”plan” ”will” or the negative of those variations or comparable expressions including references to assumptions. These forward-looking statements are not based on historical facts but rather on the Directors’ current expectations and assumptions regarding the Company’s future growth results of operations performance future capital and other expenditures (including the amount. nature and sources of funding thereof) competitive advantages business prospects and opportunities. Such forward-looking statements reflect the Directors’ current beliefs and assumptions and are based on information currently available to the Directors.  Many factors could cause actual results to differ materially from the results discussed in the forward-looking statements including risks associated with vulnerability to general economic and business conditions competition environmental and other regulatory changes actions by governmental authorities the availability of capital markets reliance on key personnel uninsured and underinsured losses and other factors many of which are beyond the control of the Company. Although any forward-looking statements contained in this announcement are based upon what the Directors believe to be reasonable assumptions. The Company cannot assure investors that actual results will be consistent with such forward-looking statements.

Cadence Minerals #KDNC – Bacanora Lithium #BCN says an additional exploration licence has been granted for Zinnwald lithium project

Cadence Minerals (AIM/NEX: KDNC; OTC: KDNCY) is pleased to note the announcement yesterday by Bacanora Lithium (AIM:BCN) (“Bacanora”) that its 50%-owned subsidiary, Deutsche Lithium GmbH, (‘Deutsche Lithium’), has been granted an additional Exploration Licence (‘the Altenberg Licence’) covering approximately 42km² in the Erzgebirge (Ore Mountain) region of Saxony, Germany. The Altenberg Licence, which completely encloses Deutsche Lithium’s existing Zinnwald Lithium Project (‘Zinnwald’), has the potential to significantly increase the life of mine at Zinnwald.

The Altenberg Licence forms part of the same geological unit that hosts the historic Li-Sn-W deposits at Zinnwald and Falkenhain, where Deutsche Lithium has existing mining and exploration licences.  The deposits on the Altenberg Licence have been explored and mined historically for tin, tungsten and lithium. Historical exploration data indicates additional exploration targets are present within the Altenberg Licence that could host lithium, tin and tungsten mineralisation.

Deutsche Lithium plans to investigate the deposits on the Altenberg Licence over the next five years and to combine its exploration and development with its Zinnwald and Falkenhain licences. The 5-year Exploration Licence was issued to Deutsche Lithium by Sächsisches Oberbergamt, the Saxony State Mining Authority.

Bacanora believes this work has the potential to increase the resource base already delineated at Zinnwald, which currently comprises 142,240 tonnes of contained Li (NI43 101, Measured + Indicated + Inferred).  A Feasibility Study (‘FS’) focused on developing a strategy to produce higher value downstream lithium products from the Zinnwald concentrates for the European battery and automotive sectors remains on track for completion in Q2 2019. In tandem with the FS, the Company is in discussi

ons with financial advisors and potential strategic partners with regards to a potential spin-off and separate listing of Deutsche Lithium.  This is being considered to assist in the funding of the construction of a high value lithium operation at Zinnwald.

The full release can be found at: https://www.londonstockexchange.com/exchange/news/market-news/market-news-detail/BCN/14009146.html

Cadence Minerals CEO Kiran Morzaria commented: “To echo the words of Bacanora CEO Peter Secker – ‘lying on the same geological play as other mines in the area, the Altenberg Licence is an excellent addition to our existing Zinnwald lithium project.

“Cadence are also pleased to note Bacanora’s comments that with the FS at Zinnwald on course to be completed in Q2.’”

This announcement contains inside information for the purposes of Article 7 of EU Regulation 596/2014.

– Ends –

For further information:

For further information:

Cadence Minerals plc +44 (0) 207 440 0647
Andrew Suckling
Kiran Morzaria
WH Ireland Limited (NOMAD & Broker) +44 (0) 207 220 1666
James Joyce
James Sinclair-Ford
Hannam & Partners LLP (Joint Broker) +44 (0) 207 907 8500
Neil Passmore
Giles Fitzpatrick
Novum Securities Limited (Joint Broker) +44 (0) 207 399 9400
Jon Belliss

Qualified Person

Kiran Morzaria B.Eng. (ACSM), MBA, has reviewed and approved the information contained in this announcement. Kiran holds a Bachelor of Engineering (Industrial Geology) from the Camborne School of Mines and an MBA (Finance) from CASS Business School.

Forward-Looking Statements:

Certain statements in this announcement are or may be deemed to be forward-looking statements. Forward-looking statements are identified by their use of terms and phrases such as ”believe” ”could” “should” ”envisage” ”estimate” ”intend” ”may” ”plan” ”will” or the negative of those variations or comparable expressions including references to assumptions. These forward-looking statements are not based on historical facts but rather on the Directors’ current expectations and assumptions regarding the Company’s future growth results of operations performance future capital and other expenditures (including the amount. nature and sources of funding thereof) competitive advantages business prospects and opportunities. Such forward-looking statements reflect the Directors’ current beliefs and assumptions and are based on information currently available to the Directors.  Many factors could cause actual results to differ materially from the results discussed in the forward-looking statements including risks associated with vulnerability to general economic and business conditions competition environmental and other regulatory changes actions by governmental authorities the availability of capital markets reliance on key personnel uninsured and underinsured losses and other factors many of which are beyond the control of the Company. Although any forward-looking statements contained in this announcement are based upon what the Directors believe to be reasonable assumptions. The Company cannot assure investors that actual results will be consistent with such forward-looking statements.

Oversold lithium could be about to rally – Mining.com

It’s been a decade of lows for commodities after posting 7 declines in 11 years, but we’ve seriously underestimated lithium. It’s back with a vengeance in 2019.

The commodities market endured yet another annus horribilis, with just four commodities—natural gas, uranium, cocoa and wheat—recording any uptick at all. Last year’s 12 percent slide by the Bloomberg Commodity Index–spurred by 20 percent-plus declines by industrial bellwethers like West Texas Intermediate crude, steel and platinum—came in the wake of two years of modest gains.

So far, there is no clear data or evidence that that the lithium demand narrative is about to slowdown, let alone reverse on the contrary, certain emerging trends in the industry suggest just the opposite

Viewed against that kind of backdrop, lithium’s 50 percent correction that snapped a multi-year winning streak appears less vicious. It’s important to remember that prior to the crash, lithium had enjoyed a meteoric rise with prices doubling since the beginning of 2016 and nearly quadrupling over the past decade. The fact that much of the rally coincided with a sharp rise in the value of the U.S. dollar makes it all the more remarkable.

Investing in the commodity market can be a roller-coaster ride; what with the incessant boom-and-bust cycles driven by the ebb and flow in infrastructural spending, production ramps/cutbacks and stockpiling/destocking supplies. And just like other financial markets, trader sentiment plays a big role in determining trajectories.

Unfortunately, it’s the latter scenario that took center-stage during last year’s lithium crash. A furor around anticipated new supply especially from China’s new hard-rock projects and Chilean brine mines got out whack and derailed the market.

 

Tsunami of Oversupply?

The situation was not helped by Wall Street punters sounding the alarm over the dangers of oversupply …

Shares of major lithium producers and explorers including Sociedad Quimica y Minera de Chile (NYSE:SQM), Albemarle Corp. (NYSE:ALB) and Orocobre Ltd (ASX:ORE) received a severe hammering in March after Morgan Stanley forecast that Chilean low cost brine producers could add as much as 200kt per year by 2025, while expansion of China’s and Australia’s hard-rock mines could pump in another half a million metric tonnes over the timeframe. That’s certainly a massive production ramp-up considering that global production in 2017 totaled just over 200kt.

In August, Macquarie Research provided the final straw after chiming in with a warning that the market was “sleepwalking into a tsunami of oversupply.”

The report put the final nail in the coffin of the decade-long lithium rally– Fastmarkets reckons that prices for battery-grade lithium carbonate in China, by far the world’s largest consumer of high-grade lithium carbonate, tumbled 50.31 percent last year to 75,000-83,000 ($10,885-12,046) yuan per tonne from 158,000-160,000 ($22,932-23,222) yuan per tonne the previous year, as demand waned.

But maybe the bear camp rushed their fences this time…

While it’s undeniable that the carnage managed to exceed even Morgan Stanley’s decidedly pessimistic outlook for global lithium prices to drop 45 percent by 2021, the fundamentals suggest that the selloff was greatly overdone and such low prices cannot be justified by simple market forces of supply and demand.

According to London-based Benchmark Minerals Intelligence senior analyst Andrew Miller, the disconnect between lithium prices and the demand side of the equation has never been bigger.

Reality check

A cross-section of materials experts have raised eyebrows at the negative assessment, criticizing the investment analysts for underestimating the rise in lithium demand and the complex nature of lithium mining and production ramps. According to them, both MS and Macquarie failed to account for just how big the gap between supply forecast and actual production can be.

And, they might be spot on.

Supply expansions in 2018 came in much lower than predicted and the tsunami of oversupply forecast by the likes of Macquarie Research proved to be little more than changing tides in the lithium supply chain.

A good case in point is Brisbane-based Orocobre, which has become the poster child for just how challenging new brine mining can be. The company’s Salar de Olaroz project in Argentina took seven years to hit its stride but still came up short of production targets. Meanwhile, run-ins with the courts and regulators coupled with mutual accusations of license violations facing Chile’s lithium giants SQM and Albemarle at their Atacama brine projects further reinforce this point.

The screenshot below from Orocobre’s investor slide presentation is a sobering reminder to this reality.

In terms of feedstock supply, SQM and Albemarle had laid out plans for increased production rates. But as is often the case with brine evaporation, the process has been hindered by seemingly endless production delays. SQM hit technical obstacles at its new brine conversion facilities that delayed its target capacity of 70,000 tpa LCE by end of 2018 while Albemarle continues to struggle to achieve full capacity at La Negra II.

The situation has not been much better in China—the ultimate lynchpin to the lithium bear thesis. Many Chinese brine producers in the Qinghai region had outlined plans to triple or quadruple capacities over the coming 3-4 years. A visit by Benchmark Minerals to these operations, however, has painted a dire picture—the technical challenges related to high magnesium concentrations in the region are nowhere near being comprehensively overcome. Across Qinghai’s 10 producers, only an additional 5,000-10,000 tonnes of lithium product found its way to the market, majority of which failed to reach technical grade specifications. This, in effect, means that much of what came online from the region was either reprocessed thus adding to costs or converted to lithium hydroxide in a bid to meet growing demand for nickel-rich cathode technologies.

Although tight credit in China forced some lithium buyers to destock and contributed to the glut, the predicted huge oversupply failed to materialize. Around mid-September, analysts at CRU estimated lithium surplus for 2018 at a relatively mild 22,000 tonnes against a demand of 277,000 tonnes.’

2019: A transition year

So far, there is no clear data or evidence that that the lithium demand narrative is about to slowdown, let alone reverse. On the contrary, certain emerging trends in the industry suggest just the opposite.

The biggest near-term driver for lithium demand is the NCM trend. The shift towards cathodes that use huge amounts of lithium hydroxide is already underway, something that is expected to trigger a huge NCM (nickel-cobalt-manganese) ramp up. Benchmark Minerals estimates that 44 percent of mega-and-giga-factories will use lithium as a raw material by 2028 translating into 534,000 tonnes of additional demand.

That projection seems to resonate with Elon Musk’s ambitious target to build 20 gigafactories across the globe over the next decade. Miller sees 2019 as the tipping point where demand will eventually outstrip supply starting 2020.

Meanwhile, Roskill has predicted that the shift to higher-nickel-cathode materials will push many lithium producers to favor production of lithium hydroxide over lithium carbonate thus taking some pressure off the lithium carbonate supply side. The firm has forecast lithium demand to expand by a brisk 21 percent annual clip between 2018 and 2025 with demand expected to grow 13.5 percent in the current year.

But, of course, no lithium bull thesis would be complete without the EV angle.

Currently, the EV market accounts for about 47 percent of global lithium demand. That, however, is expected to drastically change as EV penetration rates coupled with the ongoing trend of electric vehicles using larger battery packs that yield longer ranges leading to electric mobility gobbling up 83 percent of lithium supply a by 2027.

Fastmarkets has predicted EV penetration to hit 15 percent by 2025 from 2 percent currently. EV demand has actually been beating estimates and is constantly being revised upwards to reflect this. The EV explosion is expected to drive a nearly six-fold increase in lithium demand for the forecast period.

 

Key lithium trends to watch in 2019 and beyond

  • Lithium carbonate prices will steady in 2019 before picking up steam starting 2020
  • Lithium hydroxide prices could soften a little bit after remaining resilient in 2018
  • China will become less important as a global price trend driver as demand rapidly builds up in other key markets

Miller advises investors to keep an eye on new spodumene production, particularly how quickly it can be integrated into the chemical and converter supply chain and turned into either lithium carbonate or hydroxide. A slower ramp is likely to lead to supply constraints and raise prices and vice-versa.

New lithium hydroxide factory in Western Australia wins federal approval – Via the Guardian

Plant set to boost local jobs and supply growing global demand for lithium, which is used in renewable energy storage

Earthworks for a new lithium hydroxide factory in Western Australia are expected to begin this month after the $1bn project received federal environmental approval.

The plant owned by the world’s largest lithium producer, the US chemical company Albemarle, was approved by the WA government in October and is estimated to create up to 500 jobs in construction, with another 100 to 500 operational jobs once it is operational.

Australia’s trade minister, Simon Birmingham, said the plant would provide a much-needed local jobs boost and supply a growing global demand for lithium, which is used in renewable energy storage.

“This is a welcome investment and vote of confidence in our local lithium industry that will help attract further investment into the future,” Birmingham said.

Albemarle announced on Thursday that earthworks at the site at Kemerton Strategic Industrial Estate, just north of Bunbury, were on track to begin soon.

“Achieving this milestone underscores our commitment and confidence in developing LiOH [lithium hydroxide] operations and in our overall strategy to drive significant shareholder value and meet our customers’ demands,” said Eric Norris, the president of Albemarle’s lithium division.

The plant will process spodumene ore from the Greenbushes lithium mine, about 90km south of the industrial estate, and produce 60,000 tonnes of lithium hydroxide annually with capacity to expand to 100,000 tonnes.

It will also produce a byproduct of up to 200,000 tonnes of sodium sulfate, and a million tonnes of tailings per annum.

The company has been ordered to identify a new breeding and foraging habitat for WA’s three threatened black cockatoo species – Carnaby’s cockatoo, Forest red-tailed cockatoo, and Baudin’s black cockatoo – to offset habitat lost by clearing the 89ha plant site, including 54ha of coastal plain vegetation that is home to a number of threatened native orchids.

The director of the Conservation Council of Western Australia, Piers Verstegen, said the environmental impacts of the project were “manageable”.

“We think on the whole it’s a positive development for the south-west and one that could provide an alternative source of employment to the coal-based jobs in Collie,” Verstegen said.

Collie, about 70km east of Bunbury, is home to four of WA’s five coal-fired power stations, fed by two open-cut coalmines.

The Albemarle plan will run on gas, but Verstegen said he hoped the company would look into running it on renewable power.

WA is the world’s largest producer of lithium, and the plant at Kemerton is the second significant lithium hydroxide manufacturing plant approved in the state since 2016.

The state established a task force aimed at promoting the lithium industry last year, and the premier, Mark McGowan, met with the directors of Albemarle on a trip to Washington DC in February.

By the Guardian

Telegraph – Lithium rush: electric car boom drives race for rare metals

Bolivia’s salt plains are home to some of the richest reserves of lithium. CREDIT: IGNACIO PALACIOS /GETTY IMAGES CONTRIBUTOR

Article by the Telegraph

More than 11,000 feet up in the Andes mountains of southwest Bolivia lies Salar de Uyuni, a remote salt flat that is home to some of the world’s largest reserves of lithium.

Largely untapped, the seemingly endless expanse of bright white salt plains are on the verge of a frenzy of activity as a global scramble erupts to extract the metal and secure supplies for lithium-ion batteries – a basic building material for the electric vehicle industry.

Last month, Germany struck a deal with Bolivia under which YLB, a state-owned chemicals firm, will work alongside German industrial company ACI Systems to produce 40,000 tons of lithium per year in Salar de Uyuni once operations begin in 2022.

With the International Energy Agency predicting the number of electric vehicles on the road globally to hit 125m by 2030, the rush for lithium and other battery metals like cobalt is attracting players old and new. Established player Albemarle is bringing new lithium mines online in Western Australia, while Erik Prince, the founder of US private military contractor Blackwater, has plans to launch a $500m (£392m) fund focused on battery metals.

But valuing resources like lithium, which suddenly grab the attention of global investors, is never easy. Prices have proved extraordinarily volatile, plunging 29pc last year from $158 to $111 per kilogram and prompting many to ask: has the lithium bubble already burst?

Brian Menell, chief executive of mining specialist TechMet, says it remains a sound long-term bet.

“Last year there was a degree of over exuberance in some of these markets including lithium and cobalt that resulted in a bit of speculative hype, and the price ran further than the short term fundamentals justified,” he says.

Either way, Menell, who has worked in the mining industry for 25 years, thinks the price correction has been overdone. Since founding TechMet in 2017, he has made battery and technology metals such as lithium, cobalt and nickel his sole focus. They will be “the key ingredients of the tech revolution”, he says.

Lithium brine manufacturing in Chile

He claims the industry is at a nascent stage but demand for a consistent flow of battery metals in future is inevitable. Demand is set to climb as the car industry and governments globally take action to curb emissions to tackle climate change and poor air quality.

Adding an extra geopolitical twist has been China, which has worked doggedly over the past 15 years to secure control over the best resources and the processing of battery metals “while everybody else was sleeping”, according to Menell.

The need for Western nations to secure a central role has grown more urgent, he says.

“The drive to counter or balance China’s control is one that is in the minds of government agencies in the US and Japan and to an extent in Europe.”

 Dr Benjamin Jones, managing consultant at CRU Group says: “Lithium demand is set to double between 2017 and 2023, driven predominantly by growth in EV production and sales. Demand for battery-grade lithium is forecast to triple over this period.”

By comparison, demand for a metal like copper is expected to increase 2-3pc per year.

Despite the difficulty extracting lithium from locations such as the Bolivian salt plateau, where heavy rainfall can cause flooding, Menell’s predicts strong demand.

“There will be a massive dislocation over the next five, 10 and 15 years between the demand for these metals and the supply  which will result in [them] outperforming other commodities by many multiples over that time horizon,” he says.

Electric vehicle manufacturers like Tesla rely on lithium as a key resource.

Lithium comes from two chief sources: either the mining of a hard rock called spodumene found in places such as Western Australia, or as brine that forms beneath the high altitude salt flats of Chile, Argentina and Bolivia – a trio of countries collectively known as the lithium triangle.

Though downward pressure on price is likely to endure for a few years as the market enters a phase of “oversupply”, the metal remains in a favourable position, Jones added.

TechMet is looking at hard-rock lithium projects in Africa, rather than brine-based ones such as those in South America.

With a current glut of supply, lithium-based batteries look to be the mainstay for the future of the electric vehicle industry. However, not everyone is convinced.

Earlier this week, a lawsuit was filed against Elon Musk’s car company Tesla after the death of an 18-year-old passenger in Florida last year was alleged to have been the result of a defective battery, calling into question the safety of lithium-ion technology, which is highly flammable.

New technologies are being experimented with too. Flow batteries, which use a metal called vanadium, have emerged as a contender with significant backing from China. Solid state batteries, another alternative, carry reduced risk and have been of particular interest to Sir James Dyson, who is building his own electric vehicle fleet.

However, Menell predicts flow batteries being directed more towards grid storage, and attempts to bring new technology to the transportation industry could prove to be very expensive.

“In my view, in the next 10-15 years lithium ion batteries will in roughly their present configuration and chemistry dominate for electric vehicles,” he says.

“At the moment, it’s probably $30, $40bn going into lithium-ion battery manufacturing capacity in China and elsewhere in the world and every car company in the world has a program for their fleet to be dominated by li-ion battery driven vehicles.”

And with China keen to clean up its air pollution, output and focus on battery metals and technologies will be greater than ever from the Far East.

“Although policy targets have been reined in, Chinese regulators still require rapid improvements in the energy density of EV batteries. This will significantly impact the competitive landscape for different battery technologies in the years ahead,” says Jones.

Lithium and other battery metals may struggle on price in the short-term, but over the mid to long-term, one thing is clear: the world will eventually need a lot of lithium.

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