RESOURCE Volume 5, Issue 2
GLOBAL NETWORK
Mining, renewable energy and oil & gas worldwide
LITHIUM T H E
N E W
W H I T E
G O L D
The commodity powering the electrification of major global industries
Orocobre Nemaska Lithium | Piedmont Lithium Lepidico | Lithium Australia
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WELCOME
Interest in the global lithium industry reached fever pitch last year on the back of a wealth of projections regarding the take up of electric vehicles (EVs) over the coming decades. As governments look to implement EV-friendly initiatives and begin to outlaw traditional combustion engine vehicles, global consumer attitudes to EVs are softening and sales are set to dramatically surge. We are already witnessing the start of this fundamental change in the transportation sector, which is just one of many seismic shifts in global industries that are driving up demand for lithium – the soft metal that is a major component in EV car batteries and vital in grid energy storage, consumer electronics and other disruptive technologies. For years the lithium space has been dominated by an oligopoly of producers (SQM, FMC, Albemarle and Tianqi), but with skyrocketing demand forecasts triggering fears of a supply deficit in the sector, a multitude of miners have responded by launching new projects across major global lithium hubs.
Executive Team Editor Jacob Ambrose Willson Content Manager Michelle Madureira Content Director (APAC and Americas) David Hunter Creative Director Hugo Currie ICT Director Stuart Clark Contributors Roskill SNC-Lavalin The Lithium Spot
This is where the focus lies for RGN in our jam-packed 2018 lithium issue. We begin with major lithium brine producer Orocobre, operating in the Argentine section of the fabled ‘lithium triangle’, before shifting our attention to new hard rock
Managing Director Simon Curran
producers. We talk to Nemaska Lithium and Critical Elements, who are both advancing largescale lithium projects within Québec’s spodumene belt, along with Piedmont Lithium which believes itself to be the world’s best located lithium business, in North Carolina. But perhaps most interestingly, we profile two innovative companies – Lepidico and Lithium Australia – that have developed technologies to process previously discarded materials into lithium chemicals. You can read all of this and much more over the following pages. We hope you enjoy this issue and encourage you to connect with us on email, Facebook and Twitter. Thanks for reading!
Jacob Ambrose Willson
RGN is published by Anderson Murray Media: a diverse media and information services company focused on creating and distributing engaging content to business leaders across the globe. Anderson Murray Media Fulham Green, 69-79 Fulham High Street, Main Reception, Bedford House, London SW6 3JW Tel. +44 (0)207 148 5630
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September 6-8, 2018 LV Convention Center Las Vegas, Nevada
Mining & Exploration I N T E R N A T I O N A L
MEI2018
Conference & Expo
Workforce Development Sustainability & Community Technology The MEI2018 Conference offers a robust educational program of lectures, workshops, and poster sessions. Beyond the conference, there are many networking and social events to increase your presence in the mining community. The poster session topics emphasize research and exploration with methods, materials, and processes. The deadline for abstracts is June 15, 2018. Selections will be announced in July, 2018. The MEI2018 Expo features exhibits displaying the latest mining and processing technologies, serving all aspects of the industry. Register now using code MEI2018MS to receive 35% off conference & expo. Enroll in the Future Workforce Strategy Program, an MEI2018 exclusive workshop delivered by the Mining Leaders Group. The workshop is designed for senior managers and HR professionals across the minerals and energy sectors, to help increase sector competitiveness, workforce innovation, and develop capabilities for the future.
www.MiningExplorationInternational.com
“It was a pleasure working with the RGN team. The entire process - from the initial interview to the layout and finished piece - was seamless and professional. ” Orlee Wertheim Head of Business Development, Global Mining, Toronto Stock Exchange TSX Venture Exchange
CONTENTS
OROCOBRE
NEWS 12 Global resources news Our selection of mining, oil & gas and renewable energy stories from the last month
COLUMNS 20 The Lithium Spot Investment analysts’ bring us up to speed in the lithium majors marketplace 26 Roskill Leading consultancy outlines key market dynamics for four key energy metals 34 SNC-Lavalin SNC-Lavalin’s manager for mining environment tackles a neglected topic in the lithium sector
LITHIUM 40 Orocobre RGN speaks to the lithium triangle’s first new brine producer in 20 years 52 Nemaska Lithium Proving its position as a world-class battery grade lithium salt supplier 68 Lepidico A fresh source of lithium for the global battery market
NEMASKA LITHIUM
LEPIDICO
CONTENTS
LITHIUM AUSTRALIA 82 Lithium Australia Converting waste into battery chemicals 94 Piedmont Lithium ‘The world’s best located lithium business’ 108 Critical Elements Developing a project in Québec – the premier lithium district of the Western world
MINING 120 Arafura Resources Scaling up to be a globally significant rare earths supplier 132 Pancontinental Gold A new vision intersecting battery metals and gold in North America 142 Cobalt 27 Pure play exposure to cobalt ahead of the EV market explosion 154 Xanadu Mines Unlocking Mongolia’s underexplored copper-gold belts 170 Blue Sky Uranium Leading uranium discovery in Argentina
APPOINTMENTS & EVENTS 184 Appointments Notable appointments in the resources industry from the past month 185 Events Our pick of the top mining, oil & gas and renewable energy events happening around the world in the months to come
PIEDMONT LITHIUM
CRITICAL ELEMENTS
COBALT 27
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12
NEWS | Brookfield Multiplex MINING
GLOBAL RESO
Our selection of mi renewable energy news
Resource Global Network 13
OURCES NEWS
ining, oil & gas and s from around the world
14
NEWS
CHILE ATTEMPTS TO BLOCK CHINESE APPROACH AS GLOBAL LITHIUM HEAVYWEIGHTS CLASH The government of Chile has appealed to antitrust regulators regarding an attempt by a Chinese firm to purchase a US$4 billion equity stake in the major Chilean lithium producer SQM. Chile development agency Corfo, which manages SQM’s lithium leases in the Salar de Atacama, filed a 37-page complaint relating to the approach by Tianqi Lithium, claiming that a deal would give the Chinese company an unfair advantage in the race to secure resources to develop electric vehicles. The report warned that an acquisition of the 32% stake in SQM by Tianqi, or any entity controlled by the Chinese government, would “gravely distort market competition.”
“[SQM and Tianqi are] extremely close competitors…and were one to acquire an interest in the other – even minority – it would have serious anti-competitive impacts on the market,” wrote former head of Corfo Eduardo Bitran in the complaint. Together, Tianqi and SQM would control 70% of the global lithium market, the document said. The traditional oligopoly in the lithium market is comprised of US-based firms Albemarle and FMC Lithium, along with the two parties embroiled in this dispute. This market cartel is said to control up to 85% of the world’s lithium production.
Resource Global Network 15
SOFTBANK ENTERS LITHIUM SPACE WITH 9.9% STAKE IN NEMASKA LITHIUM Japanese investment giant SoftBank has announced its entry into the global lithium market with the acquisition of a 9.9% stake in emerging Canadian miner Nemaska Lithium. The definitive agreement between Softbank and Nemaska will see the former invest C$99 million into the latter, supporting the development of its Whabouchi project in Québec, a global hotspot for hard rock lithium deposits. Guy Bourassa, president and CEO of Nemaska said: “As a global technology pioneer and leader, SoftBank’s culture of innovation melds
very well with our own corporate values and is a clear endorsement of our approach to producing environmentally friendly, lowcost lithium compounds.” Meanwhile, Masayoshi Son, chairman and CEO of SoftBank added: “This investment in Nemaska is of monumental importance to the SoftBank Group’s strategy.” The Whabouchi mine is set to catapult Nemaska into the foreground of the fastgrowing lithium-ion battery market, a critical part of the rising EV story.
16
NEWS
GE TO BUILD $400 MILLION HALIADE-X – THE WORLD’S BIGGEST WIND TURBINE General Electric (NYSE:GE) has revealed it will invest over US$400 million during the next three to five years developing the world’s biggest offshore wind turbine. The Haliade-X turbine will have a capacity of 12MW, producing enough power to supply the energy needs of 16,000 households. The structure will stand at 260 metres tall while the length of the blades will span 107 metres. GE Renewable Energy will develop and manufacture the new turbine largely in France and aims to have its first nacelle (power generating unit) ready for
demonstration in 2019, before shipping the first turbines in 2021. Jérôme Pécresse, president and CEO of GE Renewable Energy said: “The Haliade-X shows GE’s commitment to the offshore wind segment and will set a new benchmark for cost of electricity, thus driving more offshore growth.” The world’s largest current turbine was launched in June 2017 by MHI Vestas, an offshore turbine with a capacity of 9.5MW.
Resource Global Network 17
OIL DEMAND TO PEAK IN 2030S AS EVS TAKE OVER – BP REPORT BP has predicted that demand for oil will peak in the 2030s, with electric vehicles set to capture a third of the global car market by 2040. The British oil major released its annual Energy Outlook, delivering numerous forecasts through 2040 including the arrival at a peak oil demand of 110 million barrels per day (bpd) by the mid-2030s. Consumption will then begin to plateau and decline by 2040 and thereafter, meanwhile the global EV fleet will rise to 320 million by 2040. Today, there are roughly three million EVs on the road across the world. The 320 million-strong EV fleet is a significant increase on last year’s prediction by the
company, which had 100 million EVs on the road by 2035. Along with its forecasts in the automobile market, the study also placed emphasis on future upheaval in the energy industry. “Indeed, the continuing rapid growth of renewables is leading to the most diversified fuel mix ever seen,” said CEO Bob Dudley. “Abundant and diversified energy supplies will make for a challenging marketplace. Don’t be fooled by the recent firming in oil prices: the focus on efficiency, reliability and capital discipline is here to stay.”
20
COLUMNS | The Lithium Spot
WHA
In
Resource Global Network
AT’S GOING ON WITH LITHIUM?
nvestment analysts’ bring us up to speed in the lithium majors marketplace
The Lithium Spot
21
COLUMNS||Ian The Thomson Lithium Spot 22 COLUMNS
In our opinion, there has been no change to the structure of the multi-year lithium story. A major research house, JP Morgan has recently agreed with our overall thoughts in a research note entitled “Initiating on ASX lithium sector; value emerges through cracks.” Despite that, we continue to see red in lithium stocks across the board, even after what would normally be upbeat news. So, what’s going on in what seemed to be a really ‘hot sector’, and should investors be worried? SQM-Corfo Deal
actually hit the market, given the complexity of bringing new supply online. Furthermore, the new royalty rates agreed to in the deal are prohibitively high at up to 40% of sales. This erodes the company and country’s competitive advantage of being the lowest cost producer in the world. But don’t just take our word for it. When discussing the importance of operations outside of Chile on their recent earnings call, CEO Patricio de Solminihac said: “Of course, we have great rent, operating expenses, and capital expenditures, but we have to pay much more rent.” As such, the actual deal itself did not change the short-term lithium marketplace, which will continue to be tight. And looking further down the road, it may not have that much bearing on the long-term outlook either given the high fees which SQM would need to pay to produce the incremental lithium out of Chile. So, on this front, we believe followers
The volatility began when SQM came to an
of the space should not get sucked into the
agreement after many years of conflict with
noise.
Corfo, a development agency of the Chilean major lithium producer to dramatically
Morgan Stanley Research Note
increase production from around 50,000-
As if the SQM deal wasn’t enough, Morgan
60,000 tonnes per annum (tpa) today up to
Stanley recently published a research note on
216,000 tpa through 2025.
the sector which further spooked investors.
government. The agreement allowed the
In it, Morgan Stanley argued that overall The fear from this announcement was that
prices for lithium would plummet (~-50%)
a tight demand and supply market will now
from around US$14,000 to $8,000. Moreover,
quickly shift to oversupply. As we noted in
they think that demand won’t be as strong as
our research piece on the deal, it will take
many think.
several years for this incremental lithium to
ResourceGlobal GlobalNetwork Network 23 Resource In their words: “EV penetration rate forecasts seem aggressive to us, rely too heavily on what automakers say they will produce, and do not focus enough on either the consumer value proposition or the infrastructure buildout necessary to hit bullish EV penetration rates.” In short, the lithium boom is predicated mostly on the EV demand and Morgan Stanley thinks it won’t be as strong as predicted. SHREY PATEL
Their views on pricing and demand provided
JONAH RASKAS
fresh fears for the lithium marketplace after
THE LITHIUM SPOT
fears around SQM’s deal started to subside.
The Lithium Spot, led by Shrey Patel
Interestingly, in addition to causing turmoil
and Jonah Raskas, is one of the leading
in the market, Morgan Stanley’s note had
independent investment analysis
another effect.
websites on the lithium and battery metals space.
The firm’s clients - hedge funds, mutual funds, institutions and other sophisticated investors relied on this type of research to help them place their bets. Given that the vast majority of companies in the lithium mining space are small or micro cap junior miners, these large clients were using Albemarle and SQM as vehicles to gain exposure to the lithium story.
Shrey’s interest in lithium began when he was asked to cover the space at GAMCO Investors. Through his time on both the buy and the sell-sides, as well as his experience managing capital raised from friends and family, Shrey brings tremendous research and investing insight to the table. Jonah’s passion for the lithium space
So, when the SQM news hit and Morgan
is fuelled around Market Research,
Stanley subsequently came out with the
valuation and of course, making some
bearish note, we believe the selling was led
smart investments! After working in
by these large investors unwinding their
the White House’s SpeechWriting office,
positions. The end result now is that two of
Jonah’s career took a turn to Wall Street
the largest and lowest cost producers are
where he worked for two separate
getting discarded and becoming very cheap
investment banks.
to own.
Jonah the L fuelle Rese and o maki inves work Hous office
24
COLUMNS | The Lithium Spot
Commentary from the majors The most recent earnings calls from FMC, Albemarle (ALB), and SQM, the original members of the lithium oligopoly, give us great insight into what will happen moving forward. ALB, which had previously said lithium demand would be around 35,000 tpy, doubled its forecast to 70,000 tpy even though they had just increased their forecast from 20,000 tpy the previous year. According to SQM, “the growth of the lithium market [over the last year] was faster than expected, and supply didn’t come on as fast as expected.” Finally, FMC said on their recent call that “global demand for lithium on an LCE basis will grow from about 200,000 metric tonnes in 2017 to 335,000 metric tonnes by 2020 and to 1 million metric tonnes by 2025. This is an average annual growth rate of over 20%.” In short, the major lithium companies, who serve some of the largest and complex
As we noted above, they routinely comment
customers in the world, seem to completely
on the market fundamentals and what
counter Morgan Stanley’s research note. To
customers are saying, which is very helpful in
the SQM oversupply fears, they themselves
analysing the space.
also stated that they would bring on supply slowly further easing fears of oversupply.
Things to watch for
For example, in their earnings calls, SQM and ALB both noted that their new supply coming on through 2020, the capacity for which has
Not much has changed in the short-term
not even been constructed yet, is already
outlook (through 2020) for lithium, most
in high demand from customers. In fact,
analysts and companies would 100% agree
ALB has already locked that supply up with
with that. As such, it is key to keep an eye on
customer contracts.
the current producers of lithium and those companies which will be producing shortly.
ResourceGlobal GlobalNetwork Network 25 Resource in the supply chain is feeling the pressure to make something happen. Way downstream producers like auto OEMs are coming all the way up to the lithium miner level to secure multi-year supply for their EV ambitions. Battery makers are taking stakes or making outright acquisition offers as well. Finally, the majors are scrambling to maintain their market share in a rapidly growing pie by continually looking at new projects and interesting junior companies. All of that translates to an exciting year ahead in the industry Finally, other factors to pay attention to are the EV outlook, overall lithium demand (including energy storage which is often overlooked), and supply that actually comes to the market, as much of the recent fears of oversupply could likely end up being just that - fears. All of these factors are vital to understanding the future of the lithium and battery supply chains. Beyond that, we suggest keeping an eye on
On a final note, we believe there has been
deal making in the space, especially given
no change to the structure of the multi-year
the upcoming IPO for Gangfeng (one of the
lithium story. JP Morgan has recently agreed
largest worldwide players in the space) and
with our overall approach in a research note
the spinoff of FMC Lithium in the 2nd half of
entitled “Initiating on ASX lithium sector;
2018.
value emerges through cracks.”
With so many factors influencing the lithium market fundamentals right now, every player
a
26
COLUMNS | Roskill Information Services
LI-ION BATTERY RAW MATER
Leading co
Resource Global Network
RIALS POWER AHEAD IN 2018
onsultancy Roskill outlines key market dynamics for four key energy metals
27
COLUMNS||Ian Roskill Thomson Information Services 28 COLUMNS
The raw material requirements of the lithiumion (Li-ion) battery market have come into sharp focus in the last 12-18 months. A key concern for the sector is the future ability of the upstream supply chain to meet the forecast material volumes for Li-ion batteries, particularly for large batteries for automotive applications. Most of the attention has been focused on
Roskill is a leader in international metals and min and future trends of battery and technology mat Ra
key raw materials for Li-ion cathodes and anodes; namely lithium, cobalt and graphite.
Jessica Roberts (Manager – Battery & Suzanne Shaw (Graphite Consultant) and
Increasingly, nickel has also come under the spotlight as it becomes apparent that cathodes with higher nickel loadings are likely
Lithium
to take a greater market share in EV batteries,
Lithium, as the name suggests, is a
and in this instance it is the availability of the
fundamental component of Li-ion battery
specific raw material type – nickel sulphate –
technologies. It is used mainly in the active
that has concerned the sector.
cathode materials and electrolyte solutions of Li-ion batteries, and may also be used in the
Questions over supply chain risk and price
anode of the battery cell as lithium-titanium-
volatility have led some OEMs to become
oxide (LTO).
directly involved in securing their raw materials, and – as of early 2018 – Apple,
Lithium is produced from two main sources,
BMW and Volkswagen were all reported to be
either from the extraction and processing of
in discussions with cobalt suppliers for multi-
lithium-bearing brines or from the mining
year contracts.
and processing of mineral ores. In 2017, lithium from brine sources accounted for
Here Roskill outlines the market dynamics
40% of global mined supply, with lithium
of some key Li-ion battery raw materials and
mineral operations accounting for 60%. The
discusses what might be in store for the short
major suppliers in the market are located
and longer term.
in Argentina, Chile, China and the USA for
ResourceGlobal GlobalNetwork Network 29 Resource
ROSKILL
nerals research, specialising in analysis of the supply, demand, end-use applications, trade, prices, terials, steel alloys and industrial minerals. Roskill’s Lithium-ion Batteries: Market Development & aw Materials report was published in March 2018.
Authors (left to right) & Technology Materials), David Merriman (Lithium Consultant), Jack Bedder (Cobalt Consultant), d Thomas HĂśhne-Sparborth (Nickel Sulphate Consultant); Roskill Information Services, London, UK.
brine-based operations, while lithium mineral
Asia. Albemarle is also a major producer of
operations are based primarily in Australia,
hard rock lithium through its 49:51 JV with
China, Zimbabwe and Portugal.
Tianqi Lithium at the Greenbushes mine in Australia, operated by the JV company Talison
Lithium mining has typically been undertaken
Lithium. Output from Greenbushes was
by a handful of producers, but the list is
the largest of the lithium mineral mines in
growing. Sociedad QuĂmica y Minera (SQM -
2017 by a significant margin, accounting for
Chile) was the largest brine-based producer
close to 50% of global lithium production in
in 2017, followed by Albemarle (Chile and the
mineral concentrates.
USA), FMC (Argentina), Orocobre (Argentina), Lake Lithium (China) and Tibet Mineral
Galaxy Resources and Process Mineral
Development (China).
International, both located in Australia, accounted for the second and third largest
Lithium brine producers typically concentrate
output from hard rock sources. Both
and process brines into lithium chemicals in
companies have offtake agreements with
proximity to their extraction, although almost
third-party mineral conversion facilities in
all lithium compounds produced in South
China, which is the global centre for lithium
America are exported to the USA, Europe and
mineral conversion and hosts some 99%
30
COLUMNS | Roskill Information Services of processing capacity. Refining capacity
and a tighter supply/demand balance has
is expected to be the most restricting
already impacted prices in the last couple of
bottleneck in the lithium supply chain in
years.
2018. While some of the lithium extracted and concentrated at mineral operations is
Lithium prices increased dramatically
used directly in end-use applications, around
between 2016 and early 2018, with average
two-thirds requires further processing
contract prices for battery-grade lithium
into lithium compounds, primarily lithium
carbonate increasing from US$5,800/t in Q1
carbonate and hydroxide, or other products.
2016 to $12,500/t in Q1 2018, an increase of
These are the products that are ultimately
3.4% pm. Average contract prices for battery
consumed in Li-ion batteries.
grade lithium hydroxide have shown a similar increase, reaching $14,000/t in January
Ganfeng Lithium is the largest mineral
2018 compared to $9,726/t in Q1 2016. In
converter in China, followed by Tianqi Lithium the shorter term, contract prices for 2018 and Albemarle. Virtually all conversion
delivery are expected to stabilise within the
for battery-grade lithium carbonate and
$10-15,000/t range for lithium carbonate,
hydroxide is in China, sourcing raw materials
with larger volume, multi-year deals at the
domestically and from imports. Elsewhere,
lower end, and lower-volume, quarterly
refined lithium products are also produced
or more frequent deals at the higher end.
by SQM and FMC.
Chinese spot prices have been hugely volatile over the last 12 months and Roskill expects
The use of lithium in Li-ion batteries has
this to continue throughout 2018, reflecting
grown rapidly in the last decade and in
domestic supply/demand, electric vehicle
2017 accounted for nearly half of the
incentives, and market speculation.
lithium market, at just over 100kt of lithium carbonate equivalent (LCE). Over the next
Cobalt
decade, Roskill forecasts lithium demand in
Cobalt is consumed in Li-ion battery
batteries to rise rapidly, reaching just under
precursors and cathodes and each Li-ion
900kt by the end of the forecast period. While
battery chemistry has a differing cobalt
existing lithium producers have announced
content. Cobalt is also used in nickel-
expansion plans to meet forecast demand,
cadmium (NiCd) battery cathodes and in
new mines and refining capacity will be
nickel-metal-hydride (NiMH) batteries.
required towards the end of the outlook period to avoid a significant supply deficit.
Cobalt is mostly mined as a by-product of nickel and copper, and supply is therefore
The effect on lithium prices will be
dependent on demand for (and subsequent
determined by the ability of the upstream
production of) these metals. There are
end of the supply chain to meet this demand,
some exceptions: in Morocco, cobalt is
ResourceGlobal GlobalNetwork Network 31 Resource mined as a primary metal; in China, some
future of refined capacity and production in
cobalt production is as a by-product of
China is of huge importance to the sector.
iron ore extraction; and in South Africa,
With few reported capacity expansions in the
cobalt is recovered as a by-product of
rest of the world, increases in China will be
PGM production. Although cobalt may be
central to the market.
present in ores, it is not always extracted, with extraction depending on a number of
Similarly, a suitable amount of feedstock
factors including the concentration of cobalt
will need to become available in order for
in the ore, the price of cobalt versus the
refined supply to meet demand, and this is
cost of extraction, and the process routes
complicated by the status of cobalt as being
used by individual operations. In the case of
primarily a by-product commodity. However,
copper mining, cobalt does not follow copper
with Glencore and ERG set to increase output
through the flotation stage and has often
in the DRC, feedstock availability is expected
been left in mine tailings.
to be fairly secure until the end of this decade, after which new mine sources will
The DRC is by far the biggest mine producer
be required. Tightening availability of cobalt
of cobalt globally and accounted for two-
has already started to impact prices. In Q1
thirds of total output in 2017. Almost all
2017, there was an uptick and prices rose to
production was as a by-product of copper.
an average of $21/lb for the quarter, up from
Australia was the second largest mine
a range of $12/lb and $14/lb between 2012
producer (from nickel), followed by the
and 2016. Prices continued to strengthen
Philippines, Cuba and Madagascar (all
throughout 2017, averaging $28/lb in Q2,
from nickel). The DRC was also the leading
$30/lb in Q3, and $32/lb in Q4. In Q1 2018,
producer of intermediates in 2017, followed
prices are almost at $40/lb.
by China. Intermediate cobalt products are further processed into refined chemical and
In the short term, prices are expected to
metal products. At the refined stage, China
remain at this elevated level, underpinned
is the dominant supplier (accounting for
by a tight market. After 2021, there is
over 60% in 2017), followed by Finland and
considerable upside potential owing to the
Canada.
uncertainty over feedstock availability. As always in the cobalt market, speculation may
Roskill estimates that batteries (primarily Liion) consumed more than 60kt of cobalt in
result in some price swings.
2017 and by 2027 this figure is expected to
Nickel sulphate
surge to nearly 250kt. As with lithium, the
Nickel has a long-standing history in battery
ability of the upstream supply chain to meet
applications, initially for its use in NiCd and
this demand will be a key driver of cobalt
NiMH batteries, but more recently in Li-ion
prices in the short and longer term. The
batteries. In Li-ion batteries, nickel is used
32
COLUMNS | Roskill Information Services primarily in sulphate form for the production
produced. Prices of nickel sulphate are
of precursors for cathode material. Nickel
currently considerably higher than the
chemicals are produced from higher-
base metal price (more than $3,000/t in the
grade products and intermediates, such
Chinese market in 2017) but this margin
as those produced by hydrometallurgical
is likely to narrow as production capacity
plants, in addition to carbonyl powder.
increases. Base metal nickel prices have
Hydrometallurgical plants include Ambatovy
been impacted by the announcement that
in Madagascar, Long Harbour in Canada,
Indonesia would partially lift its export ban to
Goro in New Caledonia, Ramu in Papua New
permit some exports of nickel ores, sending
Guinea, and Taganito in Philippines. These
levels back below $10,000/t in 2017, but are
plants provide feedstock to nickel sulphate
expected to move higher in the short term as
producers, the most important of which are
stocks are reduced.
located in Japan, China, Finland, Belgium, and Taiwan.
Graphite Li-ion battery anodes are typically made
Although output of nickel sulphate has
from graphite, acting as a host for the lithium
increased rapidly, future increases will
ions that move through its layers during
depend on the availability of appropriate
charging and discharging. Close to 110kt of
feedstock materials. This is a key issue for the
graphite materials were used in Li-ion battery
overall nickel sector, which is mostly driven
anodes in 2017, with under 10kt provided
by stainless steel markets; the nickel projects
by other carbon sources. Natural graphite
in the pipeline are primarily geared towards
is a mined product that is subsequently
making products suitable for use in stainless
processed to produce a spherical graphite
steel - such as ferronickel and nickel pig iron
for use in anodes, while synthetic graphite is
(NPI) - rather than nickel chemicals.
manufactured from calcined petroleum coke.
Nickel use in Li-ion batteries is expected to
China is the largest producer of both natural
increase 18-fold to 2027 to over 600kt - up
and synthetic graphite. Other important
from just over 30kt in 2017. The availability
producers of natural graphite include
of higher-grade feedstocks may well
Brazil (Nacional de Grafite), India, Canada
become a potential bottleneck for nickel
(Imerys), Ukraine and Pakistan. The synthetic
sulphate supplies, although companies
graphite industry is oligopolistic in structure,
such as BHP are already adjusting to new
dominated by a relatively small number of
market demands; from 2019 the company is
manufacturers.
expected to partially convert some capacity at its Nickel West operation to production
The largest producers are manufacturers
of nickel sulphate, shifting the composition
of graphite electrodes including GrafTech
of nickel output rather than overall volumes
International in the USA, Fangda Carbon
ResourceGlobal GlobalNetwork Network 33 Resource New Material and Sinosteel Engineering &
In January 2018, prices for high-carbon
Technology in China, SGL Group in Germany
medium and large flake increased again
and Showa Denko Carbon in Japan.The
with 94-97% C medium size flake reaching
price of anode material has fallen in recent
$953-1,135/t. Further increases are expected
years with large Chinese overcapacity
throughout 2018 as supplies in China have
and a reduction in raw graphite costs.
tightened on the back of environmental
Chinese natural graphite anode material
inspections that have led to plant closures.
manufacturers, led by the largest, BTR New
This also affected Chinese production of
Energy Materials, have become backwardly
synthetic graphite electrodes, which saw a
integrated into upstream natural graphite
massive 800% price increase in 2017. High
production, reducing their raw material costs.
prices are forecast to continue into 2018 as plants have been slow to re-open.
With a market share of just under 10% in 2017, batteries are currently the fourth-
2018 & beyond
largest end-use application for graphite
A wide variety of materials are required for
(behind the traditional steel-based
the production of Li-ion batteries and the
applications of electrodes, refractories and
total volume of material used is high, totalling
recarburising) but Roskill forecasts this
some 600kt in 2017 alone for the main raw
proportion to rise to as much as 35% of the
materials used in the cathode, anode and
graphite sector by 2027.
collector foil applications. Besides the raw materials discussed in this article, aluminium,
Initially, existing Chinese producers will
manganese, fluorspar and phosphate rock
increase production levels to utilise existing
are also crucial to Li-ion battery technology.
capacity, but in later years new projects will need to come online.
In the case of bulk markets such as copper, manganese and aluminium, the mining
Graphite prices have not escaped the
sector is likely to be able to accommodate
general trend seen in Li-ion battery raw
enhanced demand from Li-ion batteries with
materials. The price of natural flake graphite
relative ease in the coming year. In the case
concentrate increased for the first time
of more specialist materials, alliances and
in October 2017 following fifteen months
greater integration along the supply chain
without movement. Increases were only seen
will probably be required to avoid potential
in the highest carbon grades – those suitable
difficulties.
for use in battery materials.
j
34
COLUMNS | SNC-Lavalin
IMPROVING LITHIUM MINING SUSTA
SNC-Lavalin’s man
35 PHOTO : Claude Noreau
Resource Global Network
AINABILITY – DESIGN FOR CLOSURE
nager for mining environment tackles a neglected topic in the lithium sector Dominic Tremblay, P.Eng., M.A.Sc, Manager - Mining Environment, SNC-Lavalin Inc.
COLUMNS||Ian SNC-Lavalin Thomson 36 COLUMNS
The market growth for lithium (Li) has led to the development of several deposits of this metal around the world. A sustainable mine is of paramount importance to improving sustainability in the lithium mining industry. The overall life cycle of lithium must be improved, starting with the elimination or reduction of the environmental impacts associated with mining this resource.
The construction and operation stages are then spread out over a few decades. Finally, the closure period is spread over thousands of years ensuring the physical and geochemical stability of mine waste storage and its associated discharges. Therefore, it is good practice to ensure that storage areas are designed with consideration to closure and the restoration of the site while ensuring operations can be carried out easily and safely. The primary objective at closure is to ensure that the tailings and waste rock storage facilities remain chemically and physically stable for the long term. This can be achieved by controlling the geometry, water runoff, and infiltration and
Sustainable mining starts with the proper
segregation at the source of the material
environmental management of the mine
type, as well as by controlling the associated
water, tailings and waste rocks that result
chemical reactivity. Taking these critical
from the mining life cycle. The mining
elements into consideration will also favour
industry is planning the management of
the progressive closure of a mine site.
their mines, starting from the early stages of project engineering, from exploration,
Environmental and social disasters associated
through to operation and finally to mine
with dike failures have brought attention
closure.
to tailings and mine waste management practices. Such events can be mitigated by
Design for closure then becomes the critical
designing tailings storage facilities without
aspect of a mining project. The life cycle of
dikes.
mine water and waste storage areas varies greatly over the course of a project. In
Many lithium mine projects around the world
general, for hard rock spodumene extraction,
are now looking to use filtered tailings, re-
the mine design can vary from a few months
use the water and be able to store the mine
to a few years.
residue in a tailings stack that does not require any embankments.
ResourceGlobal GlobalNetwork Network 37 Resource Another innovative alternative that is becoming more common in new lithium projects is the use of the method of codisposing of waste rocks and filtered tailings in order to generate only one accumulation area. In addition to limiting the ecological footprint, co-disposition makes it possible to reduce water and wind erosion of the residues by gradual recovery of the mine tailings with waste rock and gradual reclamation of the co-disposal storage facility. As part of the design, construction and closure processes, implementing a research and development programme is becoming
SNC-LAVALIN INC. Founded in 1911, SNC-Lavalin is a global fully integrated professional services and project management company and a major player in the ownership of infrastructure. The company provides comprehensive end-to-end project solutions – including capital investment, consulting, design, engineering, construction, sustaining capital and operations and maintenance – to clients in oil and gas, mining and metallurgy, infrastructure and power. Dominic Tremblay has been a project manager with SNC-Lavalin since February 2006 and took on the role of manager for mining environment with the company in April 2017.
popular in mining project development in order to introduce the latest knowledge and
the lithium mining industry’s overall life-cycle
innovation into the engineering process.
sustainability.
Of primary importance is the thorough
SNC-Lavalin’s expertise in mining allows us
understanding of the geochemical and
to support our clients who wish to leave a
geotechnical behaviour of the mine waste.
positive environmental and social legacy, while enhancing the long-term viability of
Research programmes can predict the
their activities.
environmental behaviour of future mine discharges at different scales, from
We are currently supporting many lithium
laboratory cells to field experiment cells.
projects that are currently in development
The small-scale effect of the actual field
and we provide a broad range of geotechnical
conditions can then be better understood.
services, including investigations and design engineering, construction supervision and
Tailings and waste rock management are
management, mine site inspections and
going through a revolution. New state-of-the-
closure plans.
art innovations are being adopted to improve
a
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40
LITHIUM | Orocobre
OROC
speaks to the lithium triangle’
Resource Global Network
OBRE
’s first new brine producer in 20 years
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42
LITHIUM | Orocobre
Orocobre is the newest brinebased global lithium carbonate producer in over twenty years and is positioning itself to become a top global supplier of battery grade lithium ahead of the forthcoming EV boom. However, the company is not operating exclusively in the lithium space and is building a substantial industrial chemicals company with lithium, potash and boron assets based in Argentina – home to a major portion of the fabled ‘lithium triangle’. Orocobre operates under three separate entities in Argentina, with its flagship operation Salar de Olaroz set to receive a major boost to its production capacity after Japanese firm Toyota Tsusho purchased a 15% stake in the business and agreed to invest in expanding the facility. RGN’s editor interviews Orocobre’s managing director and CEO Richard P. Seville.
Our flagship operation, Salar de Olaroz, in the Jujuy province of Northern Argentina has been developed over this period and is the newest brine-based lithium carbonate supplier to emerge in over 20 years. It would not have been possible to develop this worldclass resource without the strength of our strategic partnerships. The Olaroz Lithium Facility began as a joint venture project built in partnership with Japanese trading giant Toyota Tsusho Corporation (TTC) and the mining investment company owned by the provincial government of Jujuy, Jujuy Energia y Mineria Sociedad del Estado (JEMSE). The Olaroz Lithium Project Joint Venture is operated through Orocobre’s Argentine subsidiary, Sales de Jujuy S.A. (SDJ), the ownership of which is held in a Singaporean company, Sales de Jujuy Pte Ltd, that is the joint venture company with partner TTC and JEMSE. The effective Olaroz project equity interest will be Orocobre 66.5%, TTC 25.0% and JEMSE 8.5%. JAW: Orocobre is currently engaged with several developments in all three of its
Jacob Ambrose Willson: Explain Orocobre’s
operations – How does the company ensure
company strategy with regards to entering
progress is consistent across all three
into partnerships to advance lithium, boron
partnerships?
and potash assets in Argentina? RS: Orocobre has been operating for Richard P. Seville: Orocobre has been
more than a decade. We are not a new
operating in Argentina for over 10 years.
company and as such, we have carefully
Resource Global Network
43
WE HAVE CAREFULLY AND METHODICALLY DEVELOPED A CORPORATE STRATEGY AND COMMENSURATE STRUCTURE OVER THIS TIME THAT ENABLES US TO DEVELOP THE WORLDCLASS LITHIUM RESOURCES AT OLAROZ AND BORON CHEMICALS AT BORAX ARGENTINA” RICHARD P. SEVILLE, MANAGING DIRECTOR AND CEO
44
LITHIUM | Orocobre
Richard P. Seville, CEO
Resource Global Network
and methodically developed a corporate
structure is critical to ensure that our
strategy and commensurate structure over
resources maintain their focus on creating
this time that enables us to develop the
value from these projects.
world-class lithium resources at Olaroz and boron chemicals at Borax Argentina. These
JAW: How important is it for Orocobre to
are established operations that are both in
expand its Olaroz project so that it endures
production and expanding.
the mass demand growth expected from the lithium-ion battery market over the coming
In addition, our strategy and structure enable
decades?
us to also maintain an ‘exploration’ profile through our 35% interest in Advantage
RS: In January this year, we announced a
Lithium.
significant strategic initiative to accelerate our expansion plans at Olaroz through a larger
In November 2016 Orocobre entered into
Phase 2 expansion of the lithium facility. This
a joint venture agreement with Advantage
strategic initiative involved a 15% placement
Lithium on its Cauchari Project and a number
to TTC, priced at a 17% premium to 30-day
of exploration projects.
VWAP.
Having a well-established strategy and
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LITHIUM | Orocobre
This initiative fully funds Orocobre’s
Fukushima, Japan with expected operating
expansion plans to bring Olaroz to a total
costs of US$1,500/tonne. This will further
annual production capacity of 42,500 tonnes
develop our ability to deliver high purity
lithium carbonate production.
battery grade product to the growing global lithium market.
But just as importantly, it continues to strengthen our longstanding strategic and
JAW: The Olaroz facility has also been held
joint venture partnership with TTC.
up as one of the lowest cost producers of lithium carbonate in the world – What
Our partnership with TTC does not preclude
other factors, besides being a brine deposit,
Orocobre from selling our product to a wide
contribute to the low production costs?
range of customers in the global industrial, technical and battery markets, which already
RS: Orocobre’s cost of lithium chemical
number more than 70.
production is currently approximately $4,000 per tonne and we expect that to
Additionally, Orocobre and TTC are finalising
reduce further to $3,000 per tonne once our
plans to jointly develop a 10,000 tonnes per
expansion is complete.
annum lithium hydroxide treatment plant in
Resource Global Network
Hard rock sourced lithium spodumene
with dry, windy conditions enhances our
concentrate (not chemicals) is reportedly
brine-evaporation process. Olaroz is also
$800-900 per tonne of concentrate. The
serviced by gas pipelines, high voltage
concentrate must then be converted to
electricity, and paved highways.
lithium chemicals at a cost of $2,000 - $3,000 per tonne (which currently is almost all done
Three major seaports, Buenos Aires in
in China) before it is ready for sale.
Argentina and Antofagasta and Iquique in Chile are serviced by international carriers
It takes 8.5 tonnes of concentrate to produce
and are easily accessible by road and/or
just 1 tonne of lithium chemicals. Taking
rail, all this coupled with onsite treatment
the mid points, hard rock sourced lithium
facilities (that can produce up to 100%
costs around $10,000 per tonne {($850 *8.5)
battery grade lithium carbonate) help keep
+$2,500 + freight = approx. $10,000/tonne}.
our overall cost of production down.
Orocobre’s Olaroz Lithium Facility is
JAW: Orocobre posted half-year revenue of
supported by favourable conditions in terms
$63.1 million in Feb 2018 – How pleasing is
of both the operating environment and local
this financial performance and what is your
infrastructure. Very limited rainfall combined
grand vision for the company? Can Orocobre
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LITHIUM | Orocobre
“OROCOBRE IS OBSERVING A VE LITHIUM CHEMICALS MARKET DRI ELECTRIFICATION OF TRANSPORT AND GRID-BASED S break into the land of the giants with regards
tight supply and attractive pricing dynamics.
to global lithium producers (i.e. the Latin American oligopoly)?
Orocobre is observing a very strong and sustainable lithium chemicals market driven
RS: Our financial performance for the half
by ongoing demand for electrification of
year to 31 December 2017 was solid and we
transport and implementation of home and
continue to consolidate our position as a
grid-based storage systems.
mainstream, profitable, low cost producer of lithium carbonate.
Orocobre and our strategic partner TTC are investing significantly in the world-class
The global market fundamentals for lithium
Olaroz Lithium Facility as it is a low cost, high
remain intact with strong demand growth,
margin operation with a very large resource
Resource Global Network
ERY STRONG AND SUSTAINABLE IVEN BY ONGOING DEMAND FOR T AND IMPLEMENTATION OF HOME STORAGE SYSTEMS� capable of sustaining multiple stages of
On the demand side, the end game is
expansion.
becoming clearer – for example:
We believe, and our research shows that
The UK and France have banned the sale of
the long term growth opportunities for
internal combustion engine vehicles by 2040,
lithium producers remain intact and in fact,
China is heading in the same direction, and
are continuing to strengthen. There remain
India plans to only sell EVs by 2030
significant headwinds for new production and supply additions we believe remain over-
Austria, China, Denmark, Germany, Ireland,
stated.
Japan, the Netherlands, Portugal, Korea and Spain have all set official targets for electric car sales.
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LITHIUM | Orocobre
Resource Global Network
For example, 750,000 EVs were sold last year,
past 20 years. Just as importantly, we are
OPEC suggests that by 2040 the global vehicle
one of the lowest cost producers of lithium
fleet will include 266 million EVs, Bloomberg
chemicals in the world with a lithium
New Energy Finance suggests by 2040 there
production cost of $4,336 per tonne for
could be 530 million, or one third of all cars
the half year to Dec 31, 2017 and a gross
will be EVs
operating margin of 62%.
So, in terms of demand, the propensity to
We believe that maintaining a low cost
buy electric vehicles is rising, meaning lithium
production base will be a key competitive
prices will remain higher for longer.
advantage for any lithium producers going forward.
Orocobre is already competing in a global market against both established and emerging players. We are the first brinebased lithium producer to emerge in the
a jcr
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52
LITHIUM | Nemaska Lithium
NEMASKA LITHIUM Proving its position as a world-class battery grade lithium salt supplier
Resource Global Network
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LITHIUM | Nemaska Lithium
‘Out with the old and in with the new’ is an adage often attached to the beginning of a new year, and for Nemaska Lithium at the start of 2018 it couldn’t have rung any truer. Barely two weeks into the new year the TSX-listed company released an updated feasibility study for its Whabouchi project in Québec, an area that contains some of the largest and richest spodumene hard rock lithium deposits in the world. Nemaska Lithium’s president and CEO Guy Bourassa, speaks to RGN about the improved project metrics outlined in the feasibility and how the vertically integrated company will become one of the largest battery grade lithium salt suppliers in the world when Whabouchi reaches commercial production.
2018 feasibility study After completing an extensive diamond drilling programme throughout 2016/17, Nemaska Lithium’s 2018 feasibility charted a host of enhanced project metrics, including an increased life of mine production to 7Mt of spodumene concentrate at a rate of 6.25% Li2O, up from 5.5Mt outlined in the 2016 feasibility. The expected mine life was also extended from 26 to 33 years.
Resource Global Network
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LITHIUM | Nemaska Lithium
The manufacturer for OEM’s We manufacture industrial components comprising:
TS EN M KS IP U OR Q W YE E V T A A HE PL
mecanitec.com
In addition, the company raised the overall
16,000 tonnes per year [up from 3,250
capacity of its electrochemical plant by 20%,
tonnes per year].”
going from a capacity of 27,400 tonnes of lithium carbonate equivalent (LCE) per year to
Nemaska Lithium’s electrochemical plant is
33,000 tonnes LCE per year.
located in the city of Shawinigan, Quebec and will process spodumene concentrate
“Initially in 2016 we had the capacity to
extracted from the mine site near the town of
produce 3,250 tonnes per year of lithium
Nemaska and develop it into two usable end
carbonate and the rest of our production
product salts; lithium carbonate and lithium
capacity was lithium hydroxide,” says
hydroxide, thus confirming the company’s
Bourassa. “But because of the signing of
positioning as a fully integrated lithium
offtake agreements for lithium carbonate in
supplier.
2017 and our discussions with other potential clients, we realised it was important that we
Both forms of lithium salts are used in the
could produce more carbonate from our
making of lithium-ion batteries, particularly
plant.
high energy density batteries found in electric vehicles, although cathodes with high nickel
“This, along with our continuous assessment
content only work with lithium hydroxide salt
of the market, prompted our decision to
while cathodes with a lower nickel chemistry
add flexibility and increase our carbonate
can use either hydroxide or carbonate.
production capacity by a factor of five to
However, both are currently in high demand
Resource Global Network
Making the complex seem simple. We combine technical expertise with the courage to challenge conventional thinking. We’re inspired to build positive change, always thinking about how to make the world a better place. Hatch. Building smarter solutions to ignite your vision. Contact us at hatch.com
by OEM car battery manufacturers and other
project financing by the first quarter of this
large cathode makers.
year.
While recent rises in demand for lithium
“We are still working on a 60:40 debt equity
carbonate shaped Nemaska Lithium’s
ratio. We have already had very advanced
decision to increase its carbonate capacity,
discussions with banks private lenders and
the company has maintained its capability
institutions that are interested in the project
to produce up to 100% lithium hydroxide
financing,” he says.
and boosted its capacity by 20% to 33,000 tonnes of lithium carbonate equivalent
Nemaska has not just received attention
(LCE) per year, providing further flexibility
from a range of investors, but also from the
to its customers from the OEM large battery
end user market, primarily from the lithium
manufacturing sector.
battery and production space.
Project financing
The company has maintained an open-
Raising the capital required to construct
minded approach to distribution, negotiating
the mine and the electrochemical plant has
with several large end users and potential
always been one of the biggest barriers to
strategic partners from Asian, North
overcome for Nemaska Lithium, however in
American and European markets, building on
early 2018 Bourassa revealed his confidence
the two supply deals it signed back in 2015
in securing the full US$616million CAPEX
with Johnson Matthey (JM) and FMC Lithium.
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LITHIUM | Nemaska Lithium
This brings us to Nemaska Lithium’s other major news release of 2018. On January 8th the company confirmed that a second shipment of battery grade lithium hydroxide had been delivered to JM from its Phase 1 plant in Shawinigan.
Battery grade lithium “We have achieved a very significant milestone here,” says Bourassa referring to the successful processing of spodumene concentrate at its small-scale demonstration plant and the subsequent delivery of the end product to its partner.
Resource Global Network “We are the only emerging producer that has decided to make a demonstration plant of a good size. “People were doubtful about the feasibility of having a good product with our electrochemical process. However, the fact that we built it [the phase 1 plant], commissioned it and started the operation and were finally able to deliver a very high purity lithium hydroxide to our initial client, that was a real eye-opener for a lot of people.” Proving doubters wrong was not the only reason for the Phase 1 plant decision. Along with being able to qualify its end product with its customers, Nemaska Lithium has also been able to weave in all the additional test work and data from the plant into its updated feasibility, painting a much more detailed and accurate picture of the overall project.
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LITHIUM | Nemaska Lithium Consequently, all the additional information gathered from the Phase 1 plant has contributed to a significant de-risking of Nemaska Lithium’s processing method and the de-risking of the construction and start-up of the commercial plant. “That’s why designing and building the Phase 1 plant was a very sound decision. Now we’ve been able to confirm the quality of the product to a third-party client and end user, which is a very big milestone for any company,” Bourassa comments. Nemaska Lithium also released the purity specifications of its product, the details of which are often a make or break factor for the end user, as the impurities in the lithium content must be within certain level for the product to perform at an acceptable standard. “We took the average minimum and maximum acceptable level of impurities outlined in the current industry standards guideline and compared them to our product. The results show that we exceed the highest standards on the market. That was a great achievement and we are very satisfied with this.” Equipped with these impressive figures, Nemaska Lithium can further venture into the OEM large battery market, armed with a guarantee that it can supply the highest quality lithium currently on the market to any potential customer.
Resource Global Network
Guy Bourassa, CEO & president
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LITHIUM | Nemaska Lithium
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WWW.SGS.COM/MINING MINERALS@SGS.COM
A global supply deficit
manufacturing market. However, these
Recent years have seen a steady lithium
spodumene producers are a red herring
supply deficit emerge and this pattern is
for those who see them as a solution to the
likely to continue for the next two to three
global lithium supply deficit.
years according to Bourassa, as supplies are squeezed by increasing demand from the
“Currently there is a need to have additional
fast growing EV market.
conversion capacities to be built in China to be able to convert this additional spodumene
Delving deeper into the complex factors
coming from Australia.
shaping the current lithium supply outlook, Bourassa explains how there are two types
“That’s why we have taken the decision to
of newcomers in the global supply market.
build a Phase 1 plant in the first place to pre-
There is a limited number of vertically
qualify our product ahead of the start of the
integrated companies like Nemaska
commercial operation, so that we can more
Lithium, but a large number of spodumene
rapidly enter the chain of supply.”
concentrate producers. Therefore, Nemaska Lithium is set to Of the latter, a significant number of
enjoy a big head start on its competitors
Australian producers are set to come online
over the next few years as additional raw
over the next few years, targeting the
lithium processing capacity comes online,
less stringent domestic Chinese cathode
thanks to its ability to supply end product
Resource Global Network
Leading the way in sustainable energy minerals pyroprocessing With a determined commitment to productivity, we help our customers solve complex challenges. As the global demand for battery technology rapidly grows, the need for expert knowledge in pyroprocessing and separation grows as well. Our spodumene calcining, acid roasting, filtration and separation technologies help you deliver more battery-grade lithium with greater efficiency. Discover how we can help you lead the way to sustainable energy minerals processing.
flsmidthminerals.com
lithium to battery manufacturers from its
a more laborious chemical process to make
electrochemical processing plant.
lithium hydroxide which contributes to a
Vertically integrated Being vertically integrated also allows
total processing cost that could be as much as $1,700 more than Nemaska Lithium’s conversion cost, says Bourassa.
Nemaska Lithium to not only compete with other leading lithium producers, but also gain Aside from drastically improving the project’s a major advantage over suppliers in China
economics, the electrochemical process can
and Chile from a production cost perspective. also be used to remove impurities from the spodumene concentrate before making the “Having our spodumene conversion done
conversion, resulting in Nemaska Lithium’s
in the same province gives us a cost
end product achieving industry-high purity
advantage of at least 55% of Chinese supply,” levels. For example, when the company Bourassa claims. “Then because we have
produces lithium carbonate out of its lithium
an electrochemical process instead of a
hydroxide solution, the immediate result is a
conventional chemical process, we also have
99.99% pure product.
an advantage on the conversion cost, which allows us to compete with the lowest cost
“Furthermore, if you compare our
brine producers of Chile.
electrochemical process to the conventional chemical process for the same tonnes of
The likes of Albemarle and SQM in Chile use
finished product we use about 75% less
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LITHIUM | Nemaska Lithium
sulphuric acid and produce up to 80% less
work, with a schedule of 9-12 months
by-products that have no commercial value.
before commissioning the mine and starting operations.
“So, because of the process itself we have a less costly product, we have a higher purity
The construction of the electrochemical
product and we are by far the greenest way
plant is currently scheduled at 18-24 months,
of making lithium salts.�
meaning there will be around a year between
Timeline
the completion of the mine and the plant. In order to fill this gap, Nemaska Lithium
Now that Nemaska Lithium is close to
has entered into discussions with end
finalising project financing, it will look to
users in Asia looking to secure spodumene
resume construction of the mine site, having
concentrate.
previously undertaken some preliminary
Resource Global Network
“WE ARE THE ONLY EMERGING PRODUCER THAT HAS DECIDED TO MAKE A DEMONSTRATION PLANT OF A GOOD SIZE.” GUY BOURASSA, CEO AND PRESIDENT
Thanks to the improved metrics contained in its 2018 feasibility study, Bourassa is imbued with an even stronger belief that the project can deliver globally significant quantities of high grade, end product to an increasingly voracious market of lithium-ion battery producers, ahead of the EV revolution. Within the first two weeks of 2018, Nemaska
“We do believe that we will be the largest
Lithium showcased its capabilities as a
lithium hydroxide battery grade producer by
world-class, vertically integrated player
2020-21, and we should represent between
in the lithium-ion battery space through
20-30% of worldwide lithium hydroxide
the successful shipment of battery grade
supply that is battery grade.”
lithium to its client JM, and also confirmed it is within touching distance of securing the all-important financing for its Whabouchi project.
abj
65
AFRICA’S LEADER
IN MINING AND MINERALS PROCESSING
MINERALS PROCESSING
MINE DESIGN
INFRASTRUCTURE
WINDER SYSTEMS
CONTRACT OPERATIONS
STUDIES draglobal.com
*OHANNESBURG 3OUTH !FRICA s 0ERTH !USTRALIA s 4ORONTO #ANADA
68
LITHIUM | Lepidico
Resource Global Network
LEPIDICO A new source of lithium for the global battery market
69
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LITHIUM | Lepidico
Demand for basic materials and commodities that are crucial components in lithium-ion batteries have skyrocketed in recent years and will remain on an upward trajectory for the foreseeable future, based on numerous sweeping projections regarding the electrification of the global energy and automotive markets. However, the lithium industry is facing the prospect of a supply deficit, with many new producers scrambling to convert raw lithium into a usable end product for the battery manufacturing market. While conventional sources of lithium from brine sites in South America and spodumene hubs in Australia and Canada are currently well-poised to handle the predicted uptick in demand in the near term, a bottleneck dynamic is emerging from a lag in downstream facilities coming online and in the long term substantial sources of new supply will be required to meet anticipated burgeoning demand.
L-Max® technology L-Max® is designed to treat lithium-rich mica and phosphate mineral concentrates, using simple but highly effective leach and impurity removal processes. With only a handful of companies exploring for such unconventional sources of lithium, Lepidico’s L-Max® has the potential to be a disruptive force within the battery grade lithium production space, by bringing a new source of low cost lithium chemical to the market. The main reagent used in the L-Max° process is sulphuric acid, a common waste product from base metal smelting operations that often needs to be transported significant distances to find a market. However, Lepidico’s technology is set to put this waste chemical to good use through L-Max®, which the Australian patent office, IP Australia, has identified as a novel, inventive and industry applicable process. “From an environmental perspective the L-Max® process can be considered as a sulphuric acid sink that allows a hazardous waste product, when combined with the lithium mica feed source to be converted into a suite of valuable products,” says Lepidico’s managing director Joe Walsh.
Entering this bubbling cauldron is Lepidico,
“Crucially, it’s not just about lithium
championing its patent registered L-Max®
carbonate or lithium chemicals here,” he
process technology that successfully treats
continues. “The other advantage with L-Max®
previously overlooked lithium mica minerals
is that it produces eco-friendly by-products
into battery grade lithium chemical and a
and relatively modest quantities of benign
suite of valuable by-products.
waste.”
Resource Global Network
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LITHIUM | Lepidico
For instance, one of the by-products of
presents Lepidico with an exciting
the process is sodium silicate, which has
opportunity to offset operating costs
a huge variety of manufacturing uses and
associated with production, to the point
could alone represent nearly half of overall
where its process can be considered a
potential revenue for Lepidico, according to
zero-C1 cost method of producing lithium
Walsh.
carbonate.
This potential to make significant additional
As outlined in the Phase 1 L-MaxÂŽ plant pre-
revenue from by-products is an important
feasibility study completed last year, for a
part of the processes economics and
capex of US$40-45 million the 30,000 tonnes
Resource Global Network The Phase 1 feasibility identified up to 50,000tpa of sodium silicate at $690 a tonne, along with other by-products that could include sulphate of potash (3,0004,000tpa at $600 a tonne), as well as caesium and tantalite, the quantities of which vary depending on the feed source. Subsequently sodium sulphate has been identified as a further by-product, albeit of lower value. “Our process is conducted at atmospheric pressure and at modest temperature. The maximum temperature employed is just over 100 Celsius. Furthermore, the process is not power intensive, and employs common use industrial reagents and equipment, which make for straightforward occupational health and safety requirements.” This is where the strategic location of the Phase 1 plant, close to abundant, affordable sources of sulphuric acid, becomes important in terms of the low cost nature of the project and is why the company is looking at building its first plant in the longstanding mining town of Sudbury, in the Canadian province of Ontario. per annum (tpa) capacity plant will produce
There are two large nickel smelters in
2,500-3,000tpa of battery grade lithium
Sudbury which produce large quantities
carbonate equivalent (LCE), at an average
of sulphuric acid for export, with Lepidico
cash cost of nil after by-products are taken
almost certainly set to become the largest
into account.
local consumer of that acid.
“On a C1 cost basis, the pre-feasibility
The case for Sudbury is strengthened
study identified that the by-products have
by its well-established infrastructure
the potential to offset all operating costs,”
networks, including power, water, gas and
confirms Walsh.
rail, experienced industrial workforce, and
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an abundance of mining related services.
mica deposits, including one with private
Sudbury is also close to active markets for
Portuguese firm Grupo Mota.
its L-Max® by-products, with the wider Great Lakes region providing a depth of market for
Under the existing ore offtake agreement
sodium silicate and potential new markets for
with Grupo Mota, lepidolite ore from the
this co-product.
Alvarroes mine in Portugal is planned to
Two-pronged Strategy
be concentrated and shipped to Canada for processing by L-Max®. “We are working
Lepidico is looking to combine a fully-
closely with Grupo Mota on furthering
integrated business model with a
this arrangement and late last year we
downstream business that will see the
announced the first mineral resource
company bring in third party feeds while
estimate for that deposit,” says Walsh.
building a global portfolio of quality lepidolite deposits.
“While modest in size at about 1.5Mt, the key here is that we don’t need a lot of tonnes to
However, owing to the rudimentary nature of
support an L-Max® plant, with this resource
lithium mica exploration and extraction, the
sufficient to provide more than 10 years feed
company has found itself poring over several
to our planned phase 1 plant in Sudbury.”
early stage lepidolite occurrences. Having said that, Lepidico has made a number of
Elsewhere, Lepidico has entered into
arrangements with the owners of lithium
arrangements over various lepidolite
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LITHIUM | Lepidico
Australian Resource Business Global Network projects in Canada and Western Australia,
Aside from the potential to open up new
where drilling programmes have recently
revenue streams from hard rock lithium
commenced on the latter projects.
sources, the deal with Galaxy provided further strong validation of Lepidico’s method
Tailings retreatment represents another limb
and strategy from a major global player in the
of the upstream model. Lepidico recently
lithium space and one who’s current market
completed a successful test work programme
capitalisation stands at around $1.4 billion.
on tailings samples from the Mt Cattlin mine in Western Australia, a spodumene operation
“For any lithium development company, the
owned by Galaxy Resources, a major
backing of an incumbent industry participant
producer in the lithium sector.
provides a stamp of credibility and is a massive endorsement of the underlying
The results revealed that the L-Max® process was able to deliver attractive process
business strategy,” declares Walsh.
lithium carbonate grading of 99.8% LCE
Changing supply and demand dynamics
from lepidolite contained in the Mt Cattlin
Returning to the forces shaping the current
tailings, an impressive result for the following
dynamics in the global lithium space, demand
reasons.
for the light metal has been on a steady
recoveries of over 90% while producing
growth curve over the past decade, driven “This really demonstrates the flexibility of
by increased portable technology usage and
L-Max®. It has the capability to economically
production of devices that require lithium-ion
extract lithium chemicals from tailings
batteries.
containing relatively modest quantities of lithium-mica.
In fact, between 2006 and 2016 lithium-ion battery demand went from 10GW to nearly
“Lepidico provides a significant value-
100GW, according to metals consultancy
add opportunity for existing spodumene
Roskill. But, only in the last five years have
operations that are processing ores that
EVs emerged into the picture, with this
also contain lithium-mica and phosphate
disruptive industry set to propel lithium
minerals.
demand to new heights if current adoption projections are taken as gospel.
“Furthermore, in the case of former operating mines there may be potential to reprocess
“EVs are coming off a low base,” admits
tailings and waste dumps, which could
Walsh.
provide an environmental remediation opportunity on such sites.”
“However growth in market share is significant. More importantly though, we
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LITHIUM | Lepidico
are seeing – around the developed world
around 3,000tpa LCE, but Lepidico expects
and particularly in China – huge government
to have additional installed capacity in the
incentives to encourage EV adoption.
plant’s major capital equipment that could allow it to be efficiently expanded to 5,000-
“I think it’s going to be those initiatives that
6,000tpa LCE, although this is still quite small
are really going to underpin broad based,
given the overall market for lithium chemicals
rapid EV adoption. Particularly for urban
is currently around 200,000tpa.
usage, EVs are a very compelling mode of transport.”
However, a full-scale L-Max® plant, which will be evaluated to succeed the Phase 1
Operating on the supply side of this major
plant in the early 2020s, is expected to be
growth industry is where Lepidico hopes
considerably larger at around 20,000tpa
to thrive. At this stage, the Phase 1 plant
LCE. This would make Lepidico a globally
is about proving commercial viability of
significant producer of battery grade lithium
L-Max®, after proving the technical capability
for an industry that could well grow to a size
of the process on a continuous basis at lab
of 500,000tpa LCE by this time.
scale. “The industry is going to need numerous The Phase 1 plant has nominal capacity of
projects of this size to be able to satisfy the
Resource Global Network
current projections for demand growth,”
has tremendous support from the province
predicts Walsh.
of Ontario and the city of Sudbury for its Phase 1 plant initiative.
“What’s going to be most important however, is thanks to our substantial by-product
In the long term, Lepidico will look to fast-
credits and also to the relatively low cost
track the full-sale plant into operation during
reagents, Lepidico should sit in the lower part
the early 2020s, at which point it would
of the global cost curve, making it a robust
become a globally significant, vertically
producer throughout a price cycle.”
integrated lithium chemical producer.
Lepidico’s short-term aim is to get the Phase
Beyond this horizon, the company is also
1 L-Max® plant into operation by 2020,
looking to establish replica plants in other key
with the securing of all relevant permits
markets such as Europe and Asia.
and approvals being the next hurdles to overcome. Walsh assures that the company
b
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LITHIUM | Lithium Australia NL
Li Aust
Convertin
thium tralia NL
ng waste into battery chemicals
Resource Global Network
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LITHIUM | Lithium Australia NL
Lithium Australia has been in the lithium space for about five years. It is regarded as a founding member of Australia’s modern lithium sector, built largely around a cluster of spodumene deposits in Western Australia (WA). During that time, the lithium sector has been transformed by burgeoning demand from the global lithium-ion battery (LIB) market. Australian miners have responded by establishing a number of conventional hard rock lithium mines in anticipation of a massive surge in battery consumption globally. Lithium Australia, however, has taken a long-lens view of development in the sector. Having noted that active producers discard high levels of lithium mica material as waste, the company began developing an innovative technology to effectively process that mica. “Mining for other commodities, such as tin, tantalum and tungsten, also produces quite substantial streams of lithium that are discarded as waste – not as spodumene waste but as lithium micas,” says Adrian Griffin, managing director of Lithium Australia. “One reason for this is the fact that micas contain lower grades of lithium than spodumene, and those lower grades haven’t
Resource Global Network until now been capable of covering the operating costs required for conventional processing. “We saw an opportunity to develop a processing technology that could capitalise on lower-grade lithium materials … which drove us to focus on mineral processing rather than exploration,” he explains. As a consequence, Lithium Australia has evolved into a technology play with a very clear mindset – ‘let the miners explore and extract; we’ll handle the crucial processing stage’ – and the aim of supplying enough battery chemicals to meet growing demand.
Exploration portfolio That said, Lithium Australia’s SiLeach® technology is backed by one of the largest lithium exploration portfolios in the world, which begs the question: is Lithium Australia a process developer, an explorer or both? Griffin responds by explaining Lithium Australia’s current strategy. Gaining access to waste streams lessens exposure to mining costs, because someone else has already removed the material and would otherwise discard it as waste. Although Lithium Australia can cut attractive deals with miners for their tailings, reliance on third-party feed, particularly non-lithium feeds such as tantalum, means that any price volatility could have a significant impact on supply.
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LITHIUM | Lithium Australia NL
“We decided the best way around this
“We’re very heavily invested in Australia and
potential problem was to develop an
that’s not surprising, given that this country
exploration portfolio as an insurance policy.
currently produces about 40% of the world’s
If you take the view that there’s more lithium lithium,” explains Griffin. Lithium Australia going to waste than ever gets into the supply has formed joint ventures with a number of chain, then there’s no justification for digging Australian lithium companies and has stakes another hole – but you certainly can justify
of various sizes in several WA-based projects,
being a primary producer if your supply is
along with a few in Queensland and South
interrupted.”
Australia and one in the Northern Territory.
With that in mind, Lithium Australia has
Lithium Australia also has a controlling
assembled a diverse exploration portfolio
interest in a substantial lithium clay project in
spread across major lithium provinces
Mexico and has entered into a joint venture
globally.
Resource Global Network
with Tin International AG on a project in
Roasting has also been considered the only
Germany. That project is estimated to contain way to refine hard rock lithium material into an inferred mineral resource of 25 million
usable chemicals such as lithium carbonate.
tonnes at 0.45% lithium oxide, making it an
Until recently, the process has been
enticing prospect – the lithium is contained in undertaken exclusively in China but this is mica, liberated during the extraction of tin.
SiLeachÂŽ technology
about to change, with a new refinery under construction in Perth.
Having taken the long view in the Australian
The current method of producing lithium
lithium space, Lithium Australia observed
chemicals is as follows. Spodumene is mined
that conventional processing of spodumene
in, say, Australia and shipped to China, where
concentrate incorporated an energy-intensive it is roasted at a high temperature, baked roasting stage.
in sulphuric acid and then leached with
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LITHIUM | Lithium Australia NL
Adrian Griffin, managing director
Resource Global Network water. Subsequent chemical steps refine the
“It’s important to capitalise on this potassium
solution until eventually lithium carbonate is
by-product credit. We do that by precipitating
produced.
potassium as potassium sulphate, which goes straight into the fertiliser industry, and that
“When we looked at the roasting method we
alone covers around 20-30% of the operating
concluded that, although the price of lithium
costs.”
carbonate was much lower then than it is today, you can’t roast with a feed grade that’s
Additional by-product credits to be gained
only half that of spodumene, because you
through use of the hydrometallurgical
can’t pay the energy bill,” says Griffin.
process include various aluminium chemicals and sodium silicate, with a few lesser-known
“So, the first thing was to ensure that the
chemicals also adding depth to the project
process we developed had a low energy
economics.
footprint. Then we looked at whether it’s possible to pull anything else, apart
To summarise, the low energy profile of the
from lithium, out of the resulting process
SiLeach® process is bolstered by the range of
solutions.”
commercially viable by-products that can be extracted alongside the lithium chemicals – a
The company concluded that the only
sweet combination for Lithium Australia.
way to achieve both ends was by way of a hydrometallurgical flowsheet, and that is how
Griffin believes that once by-product credits
SiLeach® was conceived.
are factored in, the company could become one of the cheapest lithium producers in
In a nutshell, the SiLeach® process involves
the world, even competing with the brine
slowly mixing lithium minerals with calcium
producers in the lithium triangle of South
fluoride before sulphuric acid is added to
America.
dissolve the mix into a recoverable form that contains several types of product, including
Pilot tests
the sought-after lithium chemicals.
Lithium Australia has developed a way of
By-products
effectively processing ‘waste’ material into lithium chemicals, but the purity of the end
As well as being a significantly cheaper
product remains an important consideration.
means of producing battery-grade lithium,
Therefore, it is not unreasonable for potential
the SiLeach® process for treating micas also
end-market users to question the purity of
creates a number of valuable by-products,
Lithium Australia’s product: anything below
including potassium sulphate. In fact, lithium
the industry benchmark of 99.5% hinders
micas typically contain 10-12% potassium
the chemical’s performance in lithium-ion
oxide, which is greater than that of contained
batteries.
lithium oxide which is generally 2-4%.
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LITHIUM | Lithium Australia NL
With that in mind, Lithium Australia has
The LSPP, to be constructed in WA, will take in
conducted a series of test-tube and bench-
feed from the Lepidolite Hill deposit located
scale tests for its SiLeach® process, as well
just South of Coolgardie. Lithium Australia
as operating a pilot plant designed and
has a joint venture with Focus Minerals at
built by the Australian Nuclear Science and
Lepidolite Hill, but the plant will also take in
Technology Organisation.
feed from another source currently being negotiated by the parties concerned.
As a result of those continuous pilot tests, says Griffin, the company has verified its
Access to the plant site, where the
ability to produce ‘battery-grade’ lithium
infrastructure required is already in place,
carbonate on a continuous basis.
including power, water and gas supplies and road and rail access, is another matter under
Lithium Australia is now ploughing ahead
discussion.
with a large-scale pilot plant (LSPP) designed on a ratio of 1:10 to the eventual full-scale
“We’re also negotiating the acquisition of
plant.
long-lead-time items for the plant,” reveals Griffin. “Construction will take around 18
Australian Resource Business Global Network
months, but that time frame is dictated by
acumen. For 14 years, they researched
the delivery of those long-lead-time items.
cathode powder production technology
We anticipate seeing first production of
before setting up a world class facility in
lithium chemicals in 2020.”
Brisbane, Australia, to demonstrate cathode
VSPC
powder manufacture.
In other major news for Lithium Australia, the
“We took some of those cathode powders,
company has recently confirmed it will move
used them to produce new batteries and had
into cathode manufacturing and battery
the batteries independently tested against
recycling on the basis of its acquiring 99.7%
industry standards in a lab in Germany. They
of the Very Small Particle Company (VSPC),
outperformed industry standards.
an outfit Griffin believes is one of the most advanced cathode-powder manufacturing
“We think there’s enormous value in VSPC,
entities in the world.
and we’re rebuilding the company with a view to re-commissioning VSPC’s Brisbane pilot
VSPC was founded by a small group of
plant in the next couple of months,” Griffin
academics with considerable intellectual
reveals.
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LITHIUM | Lithium Australia NL
Resource Global Network
“WE SAW AN OPPORTUNITY TO DEVELOP A PROCESSING TECHNOLOGY THAT COULD CAPITALISE ON LOWER-GRADE LITHIUM MATERIALS … WHICH DROVE US TO FOCUS ON MINERAL PROCESSING RATHER THAN EXPLORATION” ADRIAN GRIFFIN, MANAGING DIRECTOR
Perhaps most interestingly, after some
During the last five years, then, Lithium
number crunching with respect to the
Australia has developed an innovative
logistics of battery manufacturing, Griffin
processing technology capable of
believes the most profitable part of the
transforming waste products into lithium
process lies in the final stage, in which lithium
chemicals for the voracious battery market,
carbonate becomes cathode powder.
along with several valuable by-products.
“It’s the sweet spot in the value chain, and
In addition, the company is developing an
we certainly hope we can capitalise on
ability to transform lithium chemicals into
that. Under those conditions [the venture
cathode powder through its purchase of
with VSPC], we’ll become the only company
VSPC, a move that will make it one of only a
capable of taking mine waste right through to
few fully integrated lithium cathode powder
cathode powder.”
producers in the world.
abj
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LITHIUM | Piedmont Lithium
Resource Global Network
Piedmont Lithium ‘The world’s best located lithium business’
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LITHIUM | Piedmont Lithium
Between the 1950s and the 1980s, nearly all of the world’s lithium was produced from the Carolina Tin-Spodumene belt in the US state of North Carolina, and Piedmont Lithium is a young company which firmly believes that exciting mining opportunities still exist within this legendary lithium hotspot. Piedmont is a branch of the Australian mining incubator Apollo Group, and acquired its first North Carolina assets in July 2016 after Apollo’s New York City team decided to look for prospective deposits in the massive tin-spodumene belt. Apollo subsequently formed Piedmont, the group’s first lithium-focused business, which is perfectly located to take advantage of rising domestic demand for the metal, primarily from large-scale EV manufacturers.
activity on the Piedmont Lithium Project and appointed Wall Street veteran Keith Phillips as CEO and President three months later. Since then, Phillips has built the management team and led Piedmont’s progress on the project. “We have since concluded a large 12,000 metres drill programme (our Phase 2 programme) and are two-thirds of the way through a 20,000 metres Phase 3 programme. We’ve also added very strong people on the project management, process engineering and corporate side,” summarises Phillips.
The Carolina TinSpodumene belt The project is located along trend to the Hallman-Beam and Kings Mountain mines, the only two historic spodumene mines in the US, let alone within the Carolina TinSpodumene belt. The belt itself is a massive 40 miles long by one mile wide, which makes it somewhat surprising that only two mines have operated across the vast expanse since it was first identified by the US Geological Survey in 1942.
After partnering with prominent native North Carolinian geologist Lamont Leatherman,
But today, this relative paucity of further
Piedmont discovered a land package in the
exploration has provided Piedmont with
world-class Carolina Tin-Spodumene belt
ample opportunities to identify potential
and quickly acquired some initial land leases,
world-class deposits across its 1,200 acres of
completed successful initial drilling before
property in the region.
deciding to commit to the project. “It’s very clear its not mined out,” declares In April 2017, the company raised $5 million
Phillips. “It’s 40 miles long and there have
from the ASX capital market to support its
only been two mines on the property, and
Resource Global Network
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LITHIUM | Piedmont Lithium
when those mines were operating they
Consequently, Piedmont has strong grounds
provided virtually all of the world’s supply
to return to this once ubiquitous source of
of lithium. No more was really needed,
lithium in search of additional discoveries
so not a lot was done [in terms of further
to feed the ravenous contemporary lithium
exploration].”
market, and Phillips is confident that the project will deliver.
However, the lithium market of today is a different beast compared to its stature
“We’ll have our maiden resource out in June
throughout the second half of the 20th
and we believe that will be a world class initial
century. The discovery of new uses of lithium resource with substantial potential to grow. has transformed it into a massive growth
We have under-explored acreage under our
business that is 10 times larger than it used
control, and we continue to look for land on
to be and is still growing dramatically.
Resource Global Network
the belt that has the potential to do more of
miles West of Charlotte, a booming city of
the same.”
2.4 million people and the second-fastest
‘Cradle of the Lithium industry’
growing city in the US. While it is not a mining boom town akin to Perth, Charlotte serves as a corporate headquarters for a catalogue of
Aside from being home to two major historic
major domestic businesses, including Bank of
spodumene-producing mines, this region of
America, Duke Energy and Nucor.
North Carolina has been named ‘the cradle of the lithium industry’ by Piedmont for a host
The city is also a domestic hub in the lithium
of additional reasons.
space, which is reflected by Albemarle and FMC, two of the world’s biggest lithium
The Piedmont Lithium Project is located 25
players, electing to build their headquarters
99
in Charlotte. Furthermore, being the major
Another major advantage to working in this
growth city that it is, all the infrastructure
region is the remarkable affordability of land
one would expect is there - major interstate
even though the project is within touching
highways, rail, an airport and power of all
distance of the second fastest growing city in
descriptions.
the US.
“The area has also been negatively affected
Finally, when comparing the remaining
by the shutdown of a lot of textile and
costs of developing lithium mines with other
furniture plants in North Carolina, two of the
hotspots across the globe, it becomes clear
big three traditional industries in the state,
that Piedmont’s project is one of the best
along with tobacco,” reveals Phillips.
located lithium projects in the world.
“All three have been hit by new markets
Other major hard-rock deposits tend to be in
and developments and so there is a lot of
Northern Québec or Western Australia, which
skilled blue-collar labourers out of work or
are remote locations where labour camps
under-employed looking for jobs that we
need to be built and infrastructure is limited.
can offer.” The state is also home to multiple
The same goes for lithium brine deposits
universities, thus providing the perfect blend
found in high-altitude regions of the Andes in
of talent that is required for a sizeable mining
South America.
project.
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LITHIUM | Piedmont Lithium
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“For instance, in Québec most of the projects
December 2017.
require fly-in fly-out camps for the labour, which means labour costs will be more than
The comprehensive 20,000 metres infill
triple what we pay,” asserts Phillips. “WA is
drilling programme will contribute to the
much of the same and has high labour costs
definition of a maiden mineral resource and
as well as high costs for power, diesel, and
is also aggressively testing the extensions of
natural gas.
the pegmatites identified both along strike and down dip.
“We will have significant CAPEX savings compared to those projects. We think ours
An initial exploration target of between 10 to
is a wonderful mineral belt, one of many
15 million tonnes at a grade of between 1%
wonderful lithium belts in the world, but I
and 1.25% lithium oxide is currently has been
can’t think of any lithium as well located as
estimated by Piedmont’s partner CSA Global.
ours.”
A busy 12 months
As of April 2018, the Phase 3 drilling programme is two thirds complete with
Piedmont has already racked up a series of
six drill rigs on location and over many
accomplishments on its project over the last
holes being assayed. Drilling results will be
12 months, with many more targets also
released on a regular basis over the next
in the pipeline to 2020. Having completed
several weeks, followed by a maiden mineral
its Phase 1 and 2 drill programmes, the
resource announcement by the end of Q2
company started its Phase 3 programme in
(June).
Australian Resource Business Global Network
Piedmont also commenced its scoping
“The most important targets are in somewhat
study in January 2018, with Primero Group
chronological order: The ongoing drill
coordinating the study along with CSA. Both
programme, the US listing, the maiden
are very experienced in hard rock lithium
resource in June, which is well at hand. Fourth
mining and downstream production.
is metallurgical work which is underway, and we expect that to be largely completed in
SGS has also been a key partner on the
time for our scoping study in July/August.
project, providing all assaying services, while on the metallurgical analysis side Piedmont is
“Once we have a scoping study in place,
working with North Carolina State University’s
we will launch right into a pre-feasibility
Mineral Research Laboratory, a pioneer in
study and that will take us into the permit
the development of spodumene processing
application process and we will also continue
techniques, and Colorado-based Hazen
to develop relationships with potential
Research. Finally, the local Charlotte office
strategic and offtake partners.”
of global engineering firm HDR is leading the permitting process.
Full steam ahead
The scoping study will assess feasibility for a fully-integrated mining project including mine, concentrator, and lithium conversion
More recently, Piedmont has been working
plant to be located in the mining-friendly
on a secondary listing in the US that Phillips
North Carolina region.
hopes to complete by the end of April, which is one of several sequential targets that the company expects to hit over 2018.
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Being able to deliver lithium in a readily
like to be able source battery materials from
usable form is going to be crucial for
the US,” he proclaims. “The battery materials
Piedmont in terms of seeking potential
supply chain is going to evolve very rapidly in
offtake agreements with end users,
the US and we are one of the only domestic
particularly from the growing EV market as
sources with any real chance of coming to
the race to mobilise viable lithium sources
development.
heats up. “Our impression is that the offtake issue will However, in the eyes of Phillips it is the
take care of itself, so long as the project is
location of the project that will have domestic
viewed to be of a sufficient scale and quality,
EV manufacturers queueing up to buy
which is the purpose of the resource, scoping
Piedmont’s lithium.
study and metallurgical work.”
“Every automotive company in the US would
Being integrated downstream will also
Resource Global Network Piedmont expects to complete its scoping study by Q3 2018, before submitting a permit submission towards the end of Q4. After a 12-month permitting timeline, the company will be clear to build its mine and downstream facilities. Therefore, the Piedmont Lithium Project is set to enter production by 2020, a date that has been widely forecasted to herald the beginning of a revolution in the domestic EV industry. “This EV boom is a secular trend that is massive and far bigger than people give it credit for. I think we are rapidly approaching a point where every major car company in the world is committing very aggressively to electrification. “They are investing billions of dollars of capital into that process and they are identifying sites and committing to them.� introduce new revenue streams for
Once they commit, there is no turning back
Piedmont, in the shape of by-products.
and Piedmont will be waiting at the front of
The company has done initial work on the
the domestic lithium supply chain with its
recoveries and flotation for by-products
arms open wide.
including quartz, feldspar and mica which there are already markets for in North Carolina. This by-product credit from these sources has the potential to significantly sweeten the project economics.
a j
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LITHIUM | Critical Elements
CRITICAL ELEMENTS Developing a project in Québec – the premier lithium district of the Western world
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LITHIUM | Critical Elements
During the last 18 months Critical Elements has been ticking off major items on its list of deliverables in routine fashion. The TSX-V listed company is progressing the Rose Lithium-Tantalum project located in James Bay, QuÊbec – a premier mining jurisdiction and a major global lithium hub. Last year, Critical Elements completed pilot plant work for its spodumene production facility before announcing results from its lithium carbonate conversion plant pilot study in May. By mid-2017 the company had submitted an environmental impact study (EIS) for the Rose project, but perhaps the biggest development thus far was the publishing of a feasibility study. The feasibility outlined a string of attractive metrics which is imbuing the company with an additional layer of confidence as it approaches the business end of the project. The study indicated that the Rose project will produce an average annual production of 186,327 tonnes of chemical grade lithium concentrate and 50,205 tonnes of technical grade lithium concentrate, along with 429 tonnes of tantalum concentrate on an average annual basis over a 17-year mine life.
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LITHIUM | Critical Elements
At the time, president Dr Steffen Haber
with sustaining capital valued at C$126.8
said the feasibility was a ‘major milestone’
million over the life of mine.
for Critical Elements and when RGN caught up with him, he reiterated the company’s
Finally, the project’s NPV was calculated at
satisfaction with the results.
C$726 million (after-tax) with a superior IRR of 34.9% on price assumptions of
“In combination with the piloting results
US$1,500 per tonne technical grade lithium
preceding the feasibility, the superior
concentrate, US$750 per tonne chemical
quality of the ore has been confirmed and
grade lithium concentrate and US$130 per kg
demonstrated by the results,” he declares.
tantalum pentoxide.
The detailed study also included an economic Overall the figures outlined in the feasibility analysis which estimated an initial capital cost are highly encouraging for Critical Elements of C$341 million including all infrastructures,
Resource Global Network
and provide the company with a degree of
be converted into lithium carbonate.
clarity as it seeks project financing for the first phase of the Rose project.
Two-phased approach
In terms of the timeline for Phase 1 of the project, Critical Elements is moving substantially towards detailed engineering,
The company is following a two-phased
and expects to complete this process and
approach, whereby Phase 1 will produce
finalise permitting by year end before
technical grade spodumene for customers
commencing construction at the start of
in the glass and ceramics industries across
2019.
several global markets including Europe, the US and China. Chemical grade spodumene
“That means by the end of 2019 or the
will also be produced in the first phase,
beginning of 2020, we will start the
before being shipped to China where it will
commissioning of the plant and then the idea
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LITHIUM | Critical Elements
is to commence selling the product in mid-
process, Critical Elements was able to easily
2020,” Haber outlines.
convert spodumene material into lithium carbonate of battery quality and at a purity
Phase 1 of the Rose project is set to push
reading of 99.9%, while the impurity profile
Critical Elements into a cash flow generative
of the lithium chemicals was labelled
position ahead of Phase 2, which will mark
‘outstanding’ by the company in the news
the company’s entrance into the lithium
release.
chemical producing space. “We are very encouraged by the results of the Critical Elements will construct a lithium
piloting work because again it demonstrates
carbonate processing plant during Phase 2
the superior quality of our ore, given that the
of the project in preparation to supply the
process delivered such high yields and high
major growth sector that is the lithium-ion
recovery rates.”
battery market, and has been buoyed by the results of the lithium carbonate pilot study it
Over the coming months, Critical Elements
conducted last year.
will begin working on a feasibility study for Phase 2 which is scheduled to take roughly
Using the well-known thermal leaching
nine months, After this is completed, the
Resource Global Network
company will move into detailed engineering
will arrive into the market with impeccable
on that stage of the project.
timing during this transformative period in the global lithium industry.
“The carbonate plant presents a much bigger challenge to us compared to the spodumene
In recent years a supply deficit has emerged
plant, therefore we foresee the start up of
in the lithium space, but with new hard rock
the carbonate plant in 2023,� reveals Haber.
producers slowly coming online Critical
Timing the market
Elements sees the market balancing in the early 2020s, after which it will be close to
In fact, multiple projections from leading
offering its own supply of lithium carbonate
research bodies and firms within the lithium
to a global market which could have a depth
sector have flagged the early to mid-2020s
of demand in the region of 450,000 tonnes in
as a critical period during which demand
2023.
for battery grade lithium chemicals will skyrocket, based on predictions about EV
Beyond 2023, some estimations are putting
take-up around the world.
lithium carbonate demand at close to 1 million tonnes per year, therefore any lithium
With these projections in mind, Haber is adamant that the company’s Phase 2 plant
sources of a similar scale to the Rose project
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LITHIUM | Critical Elements
Australian Resource Business Global Network
are going to be vital for the industry to keep
in Québec offers a multitude of advantages
up with spiralling demand.
for Critical Elements. Québec has been widely hailed as the hub for lithium production in
“With the quality [outlined in the feasibility],
the Western hemisphere and with a deeply
we will have a very good position in supplying
ingrained mining community going back
material into that market and that’s what we
several generations, the company has access
are also seeing in terms of potential strategic
to a specialised labour force and all the
partners.
necessary infrastructure for a mining project.
“The overall supply chain of the battery
“A hydroelectric power line runs directly
industry is already very interested to learn
across our deposit and we are very close to a
more about new supply coming onstream in
main road which is very well maintained and
that time frame, and they are getting more
highly accessible for trucks.
and more nervous about the potential supply of the existing players.”
“In terms of the population, you have the Cree nations in the vicinity who provide a
Returning to the Rose project, being located
lot of services to the mining industry and
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LITHIUM | Critical Elements
Resource Global Network
“THE OVERALL SUPPLY CHAIN OF THE BATTERY INDUSTRY IS ALREADY VERY INTERESTED TO LEARN MORE ABOUT NEW SUPPLY COMING ONSTREAM AND THEY ARE GETTING NERVOUS ABOUT THE POTENTIAL SUPPLY OF THE EXISTING PLAYERS” - DR STEFFEN HABER – PRESIDENT
today there is a substantial amount of people
Elements has appointed former CFO of
available to us that have been educated in
Rockwood Lithium Marcus Brune to the
the ways of working in a mine.”
board.
The company recently announced it had
“I am very pleased that Marcus has joined the
reached an agreement with the Cree Nation
team,” says Haber, who worked closely with
of Eastmain and Niskamoon Corporation for
him at Rockwood. “He is an expert in strategy
a spawning ground enhancement project at
and corporate finance and he is helping us a
Lake Sturgeon near the James Bay highway.
lot in structuring the next financial steps to
It is this sort of positive engagement with the
be taken.”
local communities that Haber views as vital in terms of leaving a positive legacy in the
The next key deliverable for Critical Elements
region that has been so generous to them.
is to secure C$20-30 million in equity to help execute its plans for Phase 1 of the Rose
Beyond the advantages of working in the
project, which will be followed by Phase 2
province of Québec, Critical Elements is
when the company will enter the lithium
also pleased to be working in a country
carbonate production business in 2023.
with such an accommodating attitude to mining as Canada, which has clear rules
With several potential strategic partners
and procedures and was recently voted the
interested in working with the company,
world’s top mining destination by the Fraser
Critical Elements appears extremely well
Institute.
placed to start its ascent into the heart of the global lithium sector.
Now as it looks to secure funding for its upcoming move into detailed engineering on the first phase of the Rose project, Critical
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MINING | Arafura Resources
ARAFURA RESOURCES Scaling up to be a globally significant rare earths supplier
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MINING | Arafura Resources
At the start of 2018, Arafura Resources announced it had been granted environmental approval from the Northern Territory Environment Protection Authority (NT EPA) for its flagship Nolans project in central Australia – a project of globally significant scale in the rare earths space. News of this environmental approval represents a major milestone for the ASX-listed company after an exhaustive two-year assessment process. Now Arafura is in a position to move on to the next stage of the Nolans project – attracting cornerstone investors or strategic partners to assist with funding the development. Many of these potential investors are likely to be major corporations with reputations to consider, therefore it was imperative for
The burgeoning EV industry is a major
Arafura to secure environmental approval
part of the aforementioned green energy
for the rare earths project which is set to
transformation and is likely to be one of the
play a key role in the pending clean energy
biggest markets for Arafura’s key NdPr rare
revolution.
earth product, so the importance of being able to prove to potential clients that its raw
The Nolans project contains an abundance
materials have come from a non-polluting,
of two specific rare earths – neodymium and
environmentally-friendly environment cannot
praseodymium (NdPr). Both have multiple
be understated.
uses across several disruptive markets including wind energy, robotics and electric
“We advanced our environmental studies
vehicles.
ahead of a lot of our engineering studies,
Resource Global Network
knowing that environmental approval would
the assessments. The agency was also happy
enable us to have meaningful discussions
with Arafura’s risk management procedures,
with potential project financiers,” reveals
which are in line with all other mining
managing director Gavin Lockyer. “It’s a really
practises in Australia.
big milestone for our company.”
Passed with flying colours
Firstly, Arafura has committed to long-term management of radioactive material that occurs naturally in the resource. Essentially,
Lockyer says that the project passed the
they will extract the rare earths from the ore
environmental assessment with flying
before storing the radioactive residues in
colours, after the NT EPA concluded that
engineered tailings and storage facilities.
there were no significant risks identified in
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MINING | Arafura Resources “It’s a fairly standard process, many other mining operations like uranium, mineral sands or anyone mining a monazite material would have the same environmental processes and controls in place to manage it,” Lockyer says. “It’s not an onerous task and the Northern Territory has a long history of regulating it well.” Secondly, groundwater usage came under scrutiny through the environmental assessments as the host region of central Australia is a very arid part of the world and it has been estimated that the project will use up to 2.7 gigalitres of groundwater a year. As such, economical use of this limited resource is a vital obligation for Arafura. “Having said that, several years ago we spent over $3 million drilling in the desert where people told us there would be no water and we have found a significant new groundwater resource that’s not been tapped by any other user,” notes Lockyer. “So we are comfortable from all our studies to date that we’ll be able to access that water and manage the groundwater aquifers in a sustainable way.”
2017 highlights Aside from working closely with the EPA last year on attaining environmental approval, Arafura was also able to successfully raise capital and reached the halfway stage of its overall process flowsheet piloting programme. Throughout 2017, the company raised a total of $9.8 million from new investors and from
We will be one of the largest suppliers of NdPr magnet rare earths into the market, we are well advanced and this year we hope to build on all that good work we’ve done through the last couple of years” Gavin Lockyer managing director
Resource Global Network its shareholders, a significant result bearing in mind it was Arafura’s first market raise since 2012. “That was a good sign for us that capital markets were slowly opening up. As prices turned around for NdPr, it showed a renewed interest and a renewed confidence in our sector so that was a highlight.” The other highlight of 2017 from a technical aspect was the successful completion of three out of the seven phases of the flowsheet pilot programme for the Nolans project. The pilot regime is one of significant scale that will assess materials handling that is, how concentrate and other process flows move through several different types of equipment. Throughout the year, Arafura progressed through the beneficiation, phosphate extraction and bulk pre-leach phases of the pilot study and will look to complete the final phases over the first half of 2018, which should considerably minimise the commissioning risk attached to the project.
Strategic partnerships Arafura also strengthened its relationship with Korean chemical manufacturing giant OCI last year, with the signing of an extension to the existing MoU. “We have been in discussions with OCI regarding them providing us with our raw material requirements for our processing plant,” says Lockyer.
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MINING | Arafura Resources
Resource Global Network Both parties are also discussing the location
and wind turbines, with around 1.7kg of the
of the processing plant, which is still planned
material required for every EV.
to be built in South Korea, but Arafura is keeping its options open and is considering
Therefore, if you believe in the EV revolution
having sites in Australia and other parts of
and the widescale electrification of energy
the world, with the view that OCI would toll
supply, you believe in NdPr.
process the final rare earth products at the refining, or separation plant.
However, Lockyer thinks the future value of NdPr is not well reflected in their current
“We have a really good relationship with
prices and its true value will not manifest
OCI and we will continue to work with them
until China’s domestic rare earth market can
throughout 2018, with the aim of reaching a
no longer supply its magnet industry.
more binding arrangement.” China has dominated global NdPr supply for This partnership has certainly helped
many years but has recently been clamping
Arafura lay the foundations for striking
down on illegal production and polluting
further commercial deals, which has been
mines and smelters.
highlighted as a key focus for the company this year.
This campaign, along with sharply rising domestic magnet production, has led many
Lockyer explains that the firm will require
analysts to predict that it will soon become a
a ‘big brother’ to help with project finance
net importer of NdPr.
over the crucial next stages and this will be underpinned predominantly by product
“I was reading a report just recently that
offtake arrangements. “We’ll be ramping up
China increased its magnet production
those strategic partnerships and strategic
by 11% in the last 12 months. If all the
offtake arrangements with target customers
predictions are correct around the
throughout 2018,” he declares.
electrification of transport around the world,
An electric future The gradual electrification of huge industries,
I think by the mid-2020s China will become a net importer of magnet materials, because it just won’t be able to supply its own industry.
including the global automotive and energy markets, is slowly pushing up demand for
“Then I think you’ll see prices for NdPr really
NdPr, owing to their properties as magnet
start to take off. It’s extremely important for
material rare earths.
us as a developing company to make sure that we are ready to go when that market
NdPr is a key component of high strength permanent magnets that are utilised in EVs
opportunity arises,” stresses Lockyer.
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MINING | Arafura Resources
The NdPr supply opportunity
“Nolans is going to be a significant potential supplier into the market,” he proclaims.
Achieving first production in 2020 would put
“What’s more is that this production figure
Arafura in a great position to capitalise on
equating to 5-10% of global supply is only
the increased demand for magnet materials
represented in about 60% of our potential
such as NdPr, with a multitude of projections
reserve.”
suggesting that the start of the 2020s will yield some real dynamic changes in supply
Therefore, there is significant scope to
and demand.
increase the current capacity at Nolans, which could turn Arafura into an even larger
For Arafura, the sheer scale of the Nolans
global NdPr supplier.
project demands attention from a global audience.
Factor in an expected life-of-mine of 30 to 35 years and it becomes clear that with the
“We have a world-class asset in terms of
Nolans project, Arafura has the required legs
size and longevity. Our target production is
to sustain a leading position in NdPr supply
14,000 tonnes of total rare earths, including
while global industries undergo a major
3,600 tonnes of NdPr, and that would
transformation towards electrification.
represent about 5-10% of current global supply.
Resource Global Network
Roadmap to production
“We will be one of the largest suppliers of
Arafura plans to award its feasibility
NdPr magnet rare earths into the market,
engineering study contract in the coming
we are well advanced and this year we hope
weeks with completion of its definitive
to build on all that good work we’ve done
feasibility study (DFS) the first part of
through the last couple of years,” says a
this. At this stage, delivery of the DFS and
bullish Lockyer.
project financing are the only barriers left to overcome ahead of construction
When considering the scale and longevity
commencing.
of the Nolans project, along with the steady progress made on the project in the last year,
“This year, we are really focused on
it is difficult to quibble with Lockyer’s grand
completing our feasibility studies, advancing
vision of Arafura as a globally significant
our offtake arrangements and engaging with
supplier of NdPr, a strategic material that
strategic partners for capital equipment and
is key to powering the electrification and
project financing.”
automation of major global industries.
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MINING | Pancontinental Gold Corporation
A new vision intersecting battery metals and gold in North America
Resource Global Network
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MINING | Pancontinental Gold Corporation
Pancontinental Gold Corporation is a Canadian junior with an interest in low-risk North American mining districts, but don’t let its name fool you. As of the start of 2018, the company is a multi-commodity driven explorer, having identified an emerging bull market in the battery metals space. Gold is still a key part of Pancontinental’s vision, which is maintained by its continuing commitment to the Jefferson Gold Project in the US state of South Carolina, but its strategic decision to acquire the Montcalm West Nickel-CopperCobalt Project in Ontario, Canada is a function of several factors. “One is the current market conditions for those battery metals,” says Pancontinental’s president and CEO Layton Croft. “The recent performance of those commodities, the very robust outlook for demand and the fact that this cobalt is located in a very safe, pro-mining jurisdiction
experience in Ontario’s Abitibi greenstone
with great infrastructure, great local suppliers
belt region.
and labour and access to capital, as opposed to other more high risk locations, have all
Filo played an instrumental role in getting the
been factors.”
deal for Montcalm over the line, but with the opportunity presenting itself as something
The deal was also built on a long-term
that made complete sense for both parties,
relationship between one of Pancontinental’s
it was soon agreed that he would come
founders and Kevin Filo, a local exploration
on board with Pancontinental as a senior
and project geologist with over 30 years’
technical advisor for the project.
Resource Global Network
The beginnings
He and Donald Whalen, chairman of
Pancontinental’s story actually began in
Pancontinental, later spent over 15 years
Australia, where the firm was first positioned
running successful TSX-listed High River Gold
in 2004 as a uranium explorer. David Mosher,
Mines. The duo developed successful mining
one of the company’s founders and a current
projects in Canada, Burkina Faso and Russia
member of the company’s Technical Advisory
and are veterans of the business.
Committee, made a name for himself via the discovery of the Jabiluka deposit in Northern
The company also experimented with a rare
Australia, which was the largest uranium
earths deposit in Australia before becoming
deposit in the world at the time.
aware of the Jefferson Gold Project in the spring of 2016.
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MINING | Pancontinental Gold Corporation “In light of what we in the company believe is an emerging gold market, we decided to shift the focus and the company changed its name from Pancontinental Uranium to Pancontinental Gold,” Croft recalls. By the summer Pancontinental had struck a deal to buy the project, with Croft joining the company as an advisor and consultant in the autumn. At the time the company was listed on the NEX Exchange one tier down, and quickly raised C$1 million through a nonbrokered private placement that set the ball in motion for the company’s new vision. After being appointed CEO and president in April 2017, Croft oversaw post-drilling activity at Jefferson, which focused on six holes at one target called Anomaly A, along with a significant volume of post-drilling geophysics work. “The rich data set we have goes back to the 1990s when trenching, sampling and shallow RC drilling was conducted on land in the Jefferson project. We did some geophysics work, including in-house proprietary geophysical analysis of our data and other regional data.” After all this analysis, the most striking conclusion made by Pancontinental was the geological similarities to mined zones within the former producing Brewer gold mine adjacent to Jefferson and the very successful Haile gold mine which is in operation just 12km along trend.
Resource Global Network This notion is at the centre of Pancontinental’s strategy and is also replicated in the Montcalm project. “That’s what makes our overall story particularly compelling but also coherent,” proclaims Croft. “We are focused in North America, where there are safe jurisdictions, proven geologic potential, and supportive, pro-mining local governments,” Croft says. “We believe the timing for gold and battery metals is excellent.”
Battery metals “There are several key denominators in our business. The commodity, the geology, the location, the timing and the people. In the case of the Montcalm West Project, all of those are very strong,” Croft continues. The Montcalm project sits within 1km of Glencore’s former producing Montcalm site in Ontario that mined approximately 3.9 million tonnes of nickel-copper-cobalt ore in its short life. This proximity to a former mine was a major factor in Pancontinental’s attraction to the area. “We also have a gargantuan land position with great camp size potential. Those are two important ingredients,” weighs in senior technical advisor Kevin Filo. Pancontinental’s land position is split between two sites; the Montcalm property and the Nova property, both of which provide interesting mineralisation patterns.
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MINING | Pancontinental Gold Corporation
The Montcalm mine was discovered in
lenses with the deepest lens starting at 250
the 1970s by Teck Corporation as a single
metres down, and that during the exploration
line input anomaly. In other words, the
and mining phase at the mine, geophysics
geophysics barely picked it up, but they did
technology at that time had its limitations.
find it. Twenty years later a Finnish company came along and found extra tonnage which
“Today with this nickel-copper-cobalt rush,
allowed the mine to be put into production.
fortuitously we happen to have technology that will penetrate below 250 metres,” says
However, what Pancontinental found was
Filo. “The land position joining the mine
that the mine is comprised of a series of
has never been followed up by these new
Resource Global Network but untested by previous operators, as well as new targets identified by the new airborne systems. “We have a great nickel-copper-cobalt situation, high demand and we have the technology to look for a new mine right beside an old mine,” says Filo. The polymetallic nature of nickel, copper and cobalt at Montcalm West is a very important distinction for Pancontinental, particularly as all three are vital ingredients in the EV story. The importance of cobalt and nickel in car batteries is well documented, but demand for copper is likely to rise not only from EV manufacturers but also to contribute to the construction of more power infrastructure and hydro lines. “All three of these are bona fide battery metals that will remain in high demand for the foreseeable future,” predicts Croft. The polymetallic nature of the mineralisation should also offset risk by reducing Pancontinental’s exposure to a single commodity. state-of-the-art airborne EM and gravity
The global cobalt market
systems that can help us look at the next
Croft identifies a few variables impacting
layer of the cake.”
the current cobalt market, not least the DRC’s recent mining code reform which
There is one minor issue with the Montcalm
increased the cobalt mineral export tax and
area, namely extensive sand and clay
government royalties and implemented an
overburden cover. Therefore, geophysics will
excess profits tax.
be Pancontinental’s primary tool, and Filo has great trust in the technology. The company
Well over half of the world’s global supply is
will also look at near surface targets outlined
produced by this African nation, and these
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MINING | Pancontinental Gold Corporation
Australian Resource Business Global Network changes are very onerous on producers, a
Finally, the presence of Glencore in Timmins
situation which may lead to fundamental
may provide an interesting opportunity
supply and demand issues impacting spot
further down the line. The mining giant
prices.
has available milling facilities in the area, so if Pancontinental is able to establish
“However, all of that being said, for the
a mine deposit, a JV could be a mutually
foreseeable future there is going to continue
advantageous outcome for both parties.
to be significant demand and limited reliable supply from safe jurisdictions that
As Pancontinental embarks on a new multi-
are pro-mining, where the goalposts won’t
commodity vision, president and CEO Croft
suddenly move, or there won’t suddenly
stresses that he and the company are doing
be government-imposed force majeure,
all they can to secure that all important
expropriation or even civil war,” Croft says.
shareholder value in the coming years.
Not only is Montcalm West located in a safe,
“We are entrepreneurial and very keen to
predictable jurisdiction, the site is also served
keep risk down,” says Croft. “We’ve struck
impeccably by infrastructure links and access
a very good balance if you look across our
is clear-cut. “Our properties are all accessible
board, technical advisory committee and
by timber roads,” says Filo.
management/technical team. We’ve got a collective amount of experience that spans
“There are milling facilities in Timmins for
hundreds of years.
nickel copper and cobalt only 65km away by road. We have manpower, electricity and we
“Most importantly, the people in our team
are not in the middle of the Canadian Arctic.
have found, developed and built projects
That means low-cost exploration, access to
and mines that have returned significant
labour and much more.”
shareholder value to investors. We also have a lot of youthful energy and drive, so we’ve
The Timmins region is also a hive of mining
got the perfect mix of people.”
activity, which is reflected in the multitude of local partnerships Pancontinental has already struck up, aided by the localised expertise of Filo who happens to live right in the middle of an active mining camp.
a
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BATTERY METALS | Cobalt 27 Capital Corp
COBALT 27
Resource Global Network
Pure play exposure to cobalt ahead of the EV market explosion
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BATTERY METALS | Cobalt 27 Capital Corp
Cobalt 27 Capital Corp is the culmination of nearly three years of exhaustive market research and planning by a group of professionals specialising in various roles within the global mining and metals industry. The TSX-V-listed company was forged from a succession of discussions on different types of transformational disruptive technology and how they will ultimately impact basic materials. They looked at a range of technologies including semi-conductors and robotics but concluded that the energy and automobile industries are set to undergo a complete transformation, driven by advances in renewable energy, battery storage technology and the inbound electric vehicle revolution.
“What is probably most important is that it’s
These disruptive industries require a
Before looking at Cobalt 27’s asset base,
host of minerals and metals from lithium,
it is important to consider the current
graphite and cobalt in cathode and anode
sentiment and attitudes across the world
manufacturing, to copper and aluminium in
that are shaping these disruptive industries,
EV model production. This begs the following
particularly within the EV market.
a by-product of nickel and copper mining in approximately 98% of cases. That is interesting because as a by-product, cobalt on its own, doesn’t have the ability to form the supply side response. “However, SQM were recently able to announce that they will double global output of lithium in a single day, whereas with cobalt, you’d have to build a large, multibillion dollar copper or nickel mine, so it’s a very unique commodity in that respect.” After concluding that cobalt was the best material to back based on supply and demand fundamentals and projected demand growth from disruptive technology markets, such as electric vehicles and largescale energy storage systems, the hard work began for Cobalt 27. The board and management team, comprised of industry experts in mining, mine financing, cobalt and streaming and royalties, began to build the company’s asset base.
question to investors: Why cobalt? At the crux of the gradual shift towards “We found that cobalt was the most
electrification of the global vehicle fleet
interesting because of how critical it is to so
is a greater awareness of environmental
many types of existing batteries and future
degradation. According to the World Health
batteries,” says Cobalt 27’s chairman and
Organization, air pollution is the world largest
CEO, Anthony Milewski.
single environmental health risk, with up to
Resource Global Network
Anthony Milewski, chairman and CEO
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BATTERY METALS | Cobalt 27 Capital Corp 80% of greenhouse gas emissions since the
breached in many developed markets,
1970s attributable to combustion engine
Milewski points to the recent explosion
vehicles.
in quarterly and year-on-year growth, an acceleration that not many people
However, the world has responded. The
anticipated just two years ago.
watershed Paris climate accord targets 100 million EVs across the global vehicle fleet
“In terms of Cobalt 27, we are really one of
by 2030, meanwhile governments have
the purist ways to invest in that adoption,
responded by banning the sale of gasoline
because it’s hard to say if Ford is going to be
and diesel engine vehicles, such as Norway
the winner, or if it will be Tesla, or GM.
and Netherlands by 2025, and the UK and France by 2040.
“Certainly there is going to be a winner in that EV race, and if you believe there is
Today, the global EV fleet remains relatively
going to be a winner then it is cobalt,
small, with three million cars on the road
because cobalt is in every single battery
worldwide. But, the targets loom large over
cell that’s used in automobiles.”
the sector and, as technological advances continue to drive costs down, the tipping point shuffles ever closer.
Pure play cobalt exposure Cobalt 27’s asset base
“When we investigated disruptive technology, includes 2,982 tonnes of what we arrived at was the significance
physical cobalt, valued
of two factors: 1) Cost and 2) Utility,” says
at approximately
Milewski. “If you look at the EV, you are now
C$323 million, which
reaching cost parity with a like-for-like gas
is securely stored
vehicle and I think secondly, on the utility
at LME-certified
side, what’s interesting now is that range
warehouses
exceeds the majority of commuter distances. in Baltimore, Antwerp and “Range was one of the significant concerns and that has kind of gone away now. The second part of utility is the ease of recharging. If you go and look at the Tesla website what you will find is you can drive to any place in the US and can charge along the way.” Now that these two barriers have been
Amsterdam.
Resource Global Network
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BATTERY METALS | Cobalt 27 Capital Corp
Resource Global Network The company’s strategy also incorporates the
the geopolitically secure and mining-friendly
management of cobalt streams and royalties,
Abitibi region in the Canadian province of
which involve purchase agreements with
Québec.
nickel and copper mining companies who extract cobalt as a by-product metal. The
“The current royalties we have right now are
company’s physical cobalt position, combined
largely options,” reveals Milewski. “We are
with its plan to acquire a portfolio of cobalt
currently focused on producing assets and
streaming and royalty assets, is expected to
this gives shareholders leverage to the cobalt
provide shareholders with diversified asset
price.
exposure, free cash flow, and additional future avenues for growth, within a pure play cobalt investment vehicle.
“We are not operators and we do not intend to become a mining company. Instead we are really focused on giving people leverage
Cobalt 27 also holds royalties on seven exploration-stage projects prospective for cobalt and in
to cobalt and leveraging the EV story as opposed to running a mining company which is a very different business.
February 2018, acquired a 1.75% Net Smelter Return royalty on all future production over all metals from the Dumont Nickel-Cobalt Project, which contains
“Going forward, the growth of the company will really be coming from streaming and royalty transactions. That’s how we are going to get the scale and size that we want to achieve.”
the world’s largest undeveloped, permitted, and constructionready reserves of nickel and cobalt, and is
The decision to build its asset portfolio on physical cobalt and mining streams and royalties, has resulted in the company evolving into one of the best pure play cobalt investment vehicles on the TSX-V, and this has been recognised by investors globally.
located in In June 2017, Cobalt 27 completed the single largest IPO on the TSX and TSX-V since 2012, raising C$200 million in equity financing and signalling to Canadian and international capital markets the beginning of a large and fast-growing battery metals upcycle.
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BATTERY METALS | Cobalt 27 Capital Corp
The company raised a total of C$300
reports of exploitative and conflict-driven
million in equity financing in 2017 and
mining practises, many of which originate in
acquired the world’s second largest above
the Democratic Republic of Congo, home to
ground inventory of refined cobalt after the
over 60% of global cobalt supply.
government of China’s strategic stockpile. Plus, on March 9, 2018, Cobalt 27 closed a
So, how does Cobalt 27 ensure all its physical
C$200 million private placement offering
holdings and the cobalt from its streams and
conducted by a syndicate of agents co-led
royalties are ethically sourced?
by Credit Suisse and TD Securities, with proceeds to be used by the company to fund
“First and foremost, we are not operating,
the acquisition of further cobalt streams and
transacting or doing business in DRC. There
royalties.
are companies that do that, and if you do it
Cobalt and conflict mining
ethically then there are no problems. I think Glencore does a tremendous job there, but that’s not really our business model.
In recent years the global cobalt supply chain has come into disrepute after numerous
“For us, we buy branded cobalt from outside
Australian Resource Business Global Network
DRC, whether that is Norilsk, Vale or Sherrit,
“This is a once-in-a-lifetime change in two
there are any number of brands globally
of the biggest industries in the world and
that are outside of DRC. If you buy metal in
there are a variety of ways to play it, but I
Canada, you know that there are no conflict
believe that cobalt is one of the purest forms
issues there,� explains Milewski.
of playing the adoption of the EV. If people share that view of the global adoption of the
Today, the world is hovering on the cusp
EV than this is a really unique opportunity
of a significant energy transformation.
and time to invest.�
Electrification of the global vehicle fleet will have untold effects on basic materials, and Cobalt 27 offers direct leverage to one of the most vital metals powering the EV revolution, with limited exposure to capital risks.
aj
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MINING | Xanadu Mines
XANADU
Unlocking Mongolia’s under
Resource Global Network
U MINES
rexplored copper-gold belts
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MINING | Xanadu Mines
During a challenging five-year spell up to 2018, global mining markets can be consigned under the classification ‘bearish’, according to Xanadu Mines managing director and CEO Andrew Stewart. At the start of this period, prices for minerals and metals plunged across the board and since then miners have had to slash budgets and focus on repaying debt, which has ravaged the exploration space. While spot prices have generally recovered over the last 18 months, the downturn in the sector has created a market starved of new discoveries, particularly in the copper-gold industry. However, responding to this need for pipeline development stage projects is Xanadu after establishing a strong presence in Mongolia – The home of several vast, underexplored copper-belts that are rife for exploration. “The objective was to go to Mongolia because we could have the ability to get on the ground, says Stewart. “We could have the potential for tier one discoveries and our strategy was get in at the bottom of the market.” Stewart is an exploration geologist with a considerable background in the copper-gold
Resource Global Network
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MINING | Xanadu Mines
Resource Global Network space, working in central Asia and Eastern Europe over a 15-year span. Therefore, this combination of mineral-specific expertise and geographic experience means he possesses all the necessary credentials to lead Xanadu’s venture into Mongolia. The ASX-listed company’s primary aim is to unearth a string of major copper-gold discoveries across the highly-mineralised and underexplored South Gobi Poprhyry belt, within the vast Gobi Desert that straddles Mongolia to the North and China to the South. As a junior explorer, getting in at the bottom of the market has been crucial to Xanadu’s fortunes. With prices dropping to a new nadir over the last five years, major competition also withered away which allowed Xanadu to establish a large-scale land package in the South Gobi region at an attractive price. “It was really interesting that people were very talkative of how bad the market has been in recent times, but this is the opportunity we’ve been waiting for a long time. “After all you often see that major discoveries happen when there are seismic shifts in the market and we’ve seen that in the last 10 years, so there is an opportunity for junior companies to get in and pick up projects.”
Mongolia – A new mining frontier? Mongolia is one of the most mineral rich
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MINING | Xanadu Mines
Resource Global Network
countries in the world with enormous
more than 80% of exports in Mongolia, they
reserves of coal (10% of the world’s known
have the potential to significantly improve its
reserves) and several major copper-gold
economic prospects.
districts, but until recently these valuable industries were taped off to international
Xanadu has three district scale projects in
investors.
all of Mongolia’s major copper belts but will focus its efforts on two projects in the South
However, in 2017 the Mongolian government
Gobi in the short and mid term. The Oyut
moved to open up a fifth of the country for
Ulaan (Red Mountain) project and its flagship
exploration, annulled a preventative banking
Kharmagtai project are located in the same
law that dictated companies to funnel all
belt as the Oyu Tolgoi copper-gold mine, one
revenues from projects through Mongolian
of the biggest mining projects in Mongolia’s
banks and agreed to work with the IMF to
history.
review tax settings for the mining sector. One of the reasons why Xanadu is particularly It is hoped that these enabling measures will
fond of Mongolia is because its copper
herald the dawn of a new boom era in the
porphyry belts have more of a gold flavour
nation’s mining history and given that mining
and that has been reflected in the company’s
accounts for around a quarter of GDP and
progress so far at the two projects, according to Stewart.
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MINING | Xanadu Mines
Australian Resource Business Global Network “Kharmagtai has a demonstrable scale in terms of it having about 30-40km² of mineralisation, it was outcropping and what separates it from a lot of copper systems globally is that the copper is associated with gold, which is an important component when you go into a development stage. “When your by-product is gold it certainly makes the economics a lot more attractive,” he adds. Now, with an increasingly mining-friendly jurisdiction lending support to outside companies, exploration opportunities should proliferate across Mongolia’s untapped copper-gold mineralised zones. “Mongolia is god’s gift to explorers. It’s the most sparsely populated country in the world and it has the potential for non-stop exploring across these mineralised zones,” Stewart declares. Rio Tinto has had a home in Mongolia’s mining industry for close to a decade since taking on Oyu Tolgoi and recently announced it would be opening an exploration office in the country, which is another encouraging sign for the nation’s mineral resources sector. Working against the backdrop of Oyu Tolgoi is also working in Xanadu’s favour, with lots of important infrastructure already developed as a result of the large-scale development which is located just 120km North of Kharmagtai.
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MINING | Xanadu Mines “That’s the beauty of having a major project already built nearby and as a junior company we are benefitting from the work done by others. That makes life easier for us, because the infrastructure comes with world-class developments like Oyu Tolgoi.” Kharmagtai is close to sealed roads within 70km of the project and is within eyesight of an existing powerline, meanwhile a power plant is being planned for a nearby coal mine along with rail lines heading in the direction of the Chinese border.
Kharmagtai The results of recent drill programmes have confirmed high grade extensions at the Kharmagtai project within three deposits; White Hill (850m @ 0.32% Cu and 0.2g/t (0.45% eCu) from surface, including 282m @ 0.44% Cu and 0.17g/t Au from 560m), Stockwork Hill (252.2m @ 0.34% Cu and 0.49g/t Au from 632.2m) and Copper Hill (329.5m @ 0.42% Cu and 0.46g/t Au from 2.5m). “We had a very successful programme through the winter months and I think we need to carefully have a look at what we have found. We have almost doubled and in some cases tripled some of the resources we put out earlier in March last year. “Now we will probably look at getting the blueprints in for a starter project looking at how much mineralisation we have in the shallow and really working towards some of the studies on a shallow starter project.”
Resource Global Network
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MINING | Xanadu Mines
“MONGOLIA IS GO POPULATED COUNTR NON-STOP A Elsewhere, the company has formed a plan
quantities during the manufacturing process
for the Red Mountain project that will focus
(each EV reportedly requires 160kg of
on some of the shallow high grade gold
copper), but also due to all the related power
mineralisation there, along with some of the
infrastructure (ie charging stations) that
high grade copper occurring at the project.
needs to be built to support the electrification
Global copper markets
of automobiles.
The slowly enveloping EV story is becoming a Therefore, demand for copper is growing major factor in the development of the global in tandem with the EV story, but the lack of mining sector, with energy metals such as
new discoveries in recent years is a cause for
lithium and cobalt taking centre stage in key
concern, particularly as grades coming out
supply and demand discussions within this
of Chile are getting lower as major deposits
disruptive industry.
become depleted in the world’s largest copper producing nation.
However, copper is also going to play a key role in the development of the EV industry,
“I think if you believe in the battery story then
not just as copper is needed in great
the demand for copper is certainly there
Resource Global Network
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OD’S GIFT TO EXPLORERS. IT’S THE MOST SPARSELY RY IN THE WORLD AND IT HAS THE POTENTIAL FOR P EXPLORING ACROSS THESE MINERALISED ZONES” ANDREW STEWART, MANAGING DIRECTOR AND CEO and we see it on the ground. But, we are not
“We have a lot of majors knocking on our
seeing any of these copper projects come
door but for us it would be nice to initiate
along and they are often quite expensive to
that starter economic project and produce
build and take a bit of time too.
something that will support a mine life of 10 years with good grades, good capex, good
“What we haven’t found today won’t be ready
MPV and a good IRR,” concludes Stewart.
in ten years,” warns Stewart. This is why Mongolia is becoming one of the globe’s most
The pathway to production in South Gobi
significant underexplored copper regions,
is long and challenges may lie ahead but
and Xanadu is set to become one of the first
Xanadu has the high-quality management
international companies to bring copper from
team and regional expertise required to
South Gobi to the global market.
unlock Mongolia’s copper-gold belts.
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“It was a pleasure working with the RGN team. The entire process - from the initial interview to the layout and finished piece - was seamless and professional. ” Orlee Wertheim Head of Business Development, Global Mining, Toronto Stock Exchange TSX Venture Exchange
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MINING |Blue Sky Uranium
CRITICAL ELEMENTS Developing a project in Québec – the premier lithium districtof the Western world
Resource Global Network
BLUE SKY URANIUM Leading uranium discovery in Argentina
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MINING |Blue Sky Uranium
Blue Sky Uranium was incorporated in 2006 with the primary objective to take advantage of opportunities for large-scale uranium discoveries in Argentina. Executives at the TSX-V listed exploration company were well aware of a number of highly prospective regions in the South of the country, which have been known to host uranium deposits of a style not too dissimilar from those commonly found in Australia and Western Africa. Over the last 12 years, Blue Sky has acquired around 450,000 hectares of property in Southern Argentina and partnered with Areva, the world’s largest integrated uranium company, until 2011 when the Fukushima disaster in Japan sent the industry into deep freeze.
“Since then, we’ve made some tremendous strides forward due to the new people we’ve been able to employ, namely our new geologist Guillermo Pensado, who is a uranium geologist with a very large pedigree, over 20 years’ experience in Argentina.”
Part of the Grosso Group Cacos has been part of the overarching Grosso Group since its founding 25 years ago, working closely with legendary South American mining executive Joe Grosso in the running of Blue Sky. “We [the Grosso Group] have had an uninterrupted 25-year history of mineral exploration in Argentina in all kinds of metals including lithium, silver and gold and for us Argentina has been ripe with opportunity because it is so unexplored. We’ve demonstrated that so far by making three world class discoveries.” The resource management group advanced the Gualcamayo mine in San Juan province, which is estimated to contain 3.3 million ounces (Moz) of gold and is now in
“It has only been in the last 18 months that
production by Yamana Gold and also has
we’ve really reactivated the company,” says
silver deposits in Southern Argentina, most
Blue Sky’s president and CEO Nikolaos Cacos,
recently discovering the Chinchillas deposit.
discussing the company’s new lease of life after its projects were temporarily placed on care and maintenance in the aftermath of Fukushima.
Resource Global Network The deposit will now be brought into
after the new plants come online in 2019.
production through a lucrative partnership
Much like other sources within its energy mix,
between Grosso Group’s Golden Arrow
Argentina imports uranium primarily from
Resources (previously featured in RGN Vol 4
Kazakhstan and Canada, which has proven to
Iss 7) and SSR Mining. “However, we believe
be a drain on funds.
that the group’s fourth discovery in Argentina is under Blue Sky,” says the CEO.
“Argentina is shifting its focus from importing hydrocarbons and using up all its valuable
Nuclear power is beginning to pick up again
US dollars in foreign exchange and is moving
after reverberations from the Fukushima
towards uranium as a source of reliable,
incident have been fully absorbed by global
efficient and cheap energy.
markets. Multiple reactors are being built across the world, with 56 currently under
“The government is very keen to have a
construction according to Cacos, many
domestic source of uranium and Blue Sky
of which are in countries you wouldn’t
has the project right now to gear up to be
necessarily expect, such as Japan and Saudi
Argentina’s first domestic supplier of uranium
Arabia.
and then become an exporter after that.”
Argentina is home to an advanced nuclear
While it is too early for the company to
energy industry itself. South America’s
confirm Argentina as its first customer, Blue
second largest economy has three nuclear
Sky is working very closely with the federal
power plants in operation, another one
government, in particular within the Rio
under construction, two more that are
Negro province in which it is active, which has
commissioned and two more in the planning
a budding nuclear research industry.
stage. “We are getting a lot of support and are At the moment Argentina needs around
building a really positive rapport between
500,000 pounds of uranium a year to feed
us. We are very confident that Argentina is
the plants that are currently in operation, but
looking at us as a first source of uranium,”
this is set to rise to one million pounds a year
Cacos purrs.
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MINING |Blue Sky Uranium
Carbon-free energy Having seen global uranium prices bounce back in recent years, Cacos is one of many staunch advocates of nuclear energy as a clean, reliable and long-term source of energy. “I believe uranium is our best way of achieving a carbon-free source of energy,” he says. “Reactors can have a long life. The new reactors being built are extremely safe and in terms of energy efficiency I remember reading in a recent article that half a barrel of uranium has enough energy to supply one person’s entire lifetime need of energy. “I think even in Japan when the Fukushima reactor was damaged by the tsunami, it was a very old reactor. There were other new reactors there that weren’t damaged at all. I think part of it is also fear.
Resource Global Network “However, if used properly and safely it is a
in what you are looking for and work closely
natural form of energy that with the proper
with them and that way we can focus our
safeguards is the best form of energy we can strategy.” use.” These local geologists pointed Blue Sky to a Blue Sky has established exploration activity
region surrounding Cerro Solo. Just North of
in two provinces of Southern Argentina; Rio
the deposit, a number of outcroppings were
Negro and Chubut, both of which straddle
located in Rio Negro that generated a great
the geologically diverse Patagonia region.
deal of excitement amongst the geologists.
Despite being highly prospective uranium-
Blue Sky subsequently purchased a very
bearing regions, there had been next to no
large land package and flew a radiometric
exploration projects when the company
survey spanning 28,000km, which remains
arrived in the provinces, aside from the
to this day the largest flown for any metal in
atomic agency for Argentina’s (CNEA) deposit Argentina. in Chubut called Cerro Solo. “It was just amazing to see on a map almost “Initially, we teamed up with local exploration a quarter size of Switzerland all these geologists, they knew where we should be
radioactive anomalies that were popping up,”
focused and that’s always been the Grosso
recalls Cacos. “We were able to acquire really
Group modus operandi: Find the best experts large packages, almost an entire district of potential uranium discovery.”
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MINING |Blue Sky Uranium
Resource Global Network After the airborne surveys, Blue Sky staked the properties and afterwards it was a matter of trying to locate the radiometric anomalies that had showed up on the surveys. “We sent a crew of geologists driving through the properties and it’s very interesting what they saw. Patagonia is a very flat and semiarid area in Argentina and its very sparsely populated, less so than Siberia. “Our team was following a typical dirt road in the area and were raking through the gravel just to clean it up and you could actually see this yellow carnotite right on the side, so the spectrometers in the geologists’ Jeep went off, they got out and within a matter of a few minutes they found the uranium.”
Amarillo Grande With the proliferation of uranium in the region all but confirmed by the geologists on the ground, Blue Sky began to put together a big geophysical mapping programme and conducted trenching to gauge how deep the uranium was occurring, before commencing a drill programme across the large, 140 x 50km land package which is now called Amarillo Grande. “We initially prospected over the entire 140km length of the project but decided in the last year to really focus on one area and we chose the Ivana area,” says Cacos. “We used some very focused geophysics, which turned out to be an excellent guide to how the mineralisation was flowing through.” The type of mineralisation present across the target is called a surficial type deposit, which tend to occur over large areas at a relatively low grade, comparable to uranium deposits found in Namibia or in Western Australia such as the Wiluna deposit. However, the results of a recent drill programme have allowed the company to expand the high grade core at the Ivana target by a further 1km, while
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MINING |Blue Sky Uranium infill drilling results also revealed consistent higher grade thicknesses, including individual results as high as 10,517 ppm or > 1% uranium over 1m. These results are a significant mark-up on the low grades commonly found in the comparable African and Australian deposits, which tend to come in at around 500 ppm or 0.5% uranium. “Our results are really exciting because this is the type of economic grade that can really add up very quickly when you do a resource calculation. We have closed off a series of 3,000m of infill drilling at Ivana, and are very close to publishing our initial resource calculation.” With the resource calculation due in the first week of March, Cacos expects to see an immediate institutional following based on the high grades present in the deposit and the fact that Blue Sky picked up the property for pennies back when it had no real value. “We would become candidates for those uranium investors that are going to see not just the potential of this initial deposit but also that we now have a completely understood model that we can replicate in other areas in this property. We are sitting on an entire uranium deposit with the potential of up to 100 million pounds or more.” Blue Sky’s short term targets in 2018 are three-fold: To put out an initial resource
uninterrupted 25-ye which has been rip
Nik
Australian Resource Business Global Network
“We [the Grosso Group] have had an ear history of mineral exploration in Argentina, pe with opportunity because it is so unexplored�
kolaos Cacos, president and CEO, Blue Sky Uranium Corp
179
Resource Global Network
estimation, to continue its geophysical
potential, as prices for the mineral have
programme that has been an excellent
soared in recent months owing to its
guide to discovery thus far, and to publish
usages as a steel hardener and in high-tech
a preliminary economic assessment on the
batteries.
resource. “We’ve always known about it but didn’t take “We are targeting what we believe is
much notice because vanadium was typically
economic in this environment today, and I
between $3-5 per pound, but now it fetches
want to demonstrate that,” says a confident
between $12-13 and all of a sudden it’s
Cacos. “If prices of uranium go up that’s
become a very significant metal.
fantastic, but we are focused on what would make money today.”
“This is a real game changer here, its giving the Amarillo Grande project an entire new
Finally, the occurrence of vanadium alongside
complexion.”
uranium at the Amarillo Grande deposit is also adding further juice to its economic
abj
181
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Resource Global Network
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APPOINTMENTS & EVENTS
APPOINTMENTS London Metal Exchange appoints new COO The London Metal Exchange (LME) has promoted James Cressy to the position of chief operating officer (COO) with immediate effect. Cressy previously worked as head of operations for LME Clear, the metal market’s trading house, and most recently he acted as head of relationship management for the group. He will report to LME Chief Executive Matthew Chamberlain and LME Clear CEO Adrian Farnham
Bacanora Minerals welcomes Janet Boyce into CFO role London and Canadian listed lithium miner Bacanora Minerals has appointed certified public accounted Janet Boyce as its chief financial operator (CFO). Boyce replaces Derek Batorowski in the role, who is stepping down to pursue other business interests. Bacanora is advancing a lithium carbonate facility based in Mexico and completed a feasibility study on its US$1.35 billion Sonora project at the end of last year.
Oil baron Algy Cluff steps down as boss of North Sea crude producer Algy Cluff has stepped down from his position as chief executive of Cluff Natural Resources – the company he formed in 2012. The North Seafocused oil producer has appointed finance director Graham Swindells as its new boss, with Cluff remaining chairman of the firm. “ I have committed myself to our company since its inception, but I am now at the stage where I wish to step back from my full-time role,” said Cluff.
Rob Forrest appointed chairman of Scottish Renewables Scottish Renewables has a new chairman in the shape of Rob Forrest, the former chief executive of renewable energy developer GreenPower. Forrest replaces Patricia Hawthorn in chairing the national renewables body, and will draw on his experience as chief executive of Scottish Renewables between 1999 and 2004. Scottish Renewables has also appointed David Cameron, head of Scottish Policy at EDF Energy, as vice-chairman.
Resource Global Network 185
EVENTS Our pick of the top mining, oil & gas and renewable energy events happening around the world in the months to come
International Lithium Conference 2018 June 27-28 Perth Australia EV Infrastructure Summit July 03-04 London UK ALTA 2018 May 19-26 Perth Australia Global Offshore Wind June 19-20 Manchester UK 3rd International LNG Summit April 25-26 Hamburg Germany
Want to promote your resources event? Email the editor at editorial@resourceglobalnetwork.com
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