electric vehicle charging at the side of the road

Lithium receives most of the attention when it comes to electric vehicles, but copper's role is becoming increasingly vital. Australia is positioned to help feed demand.

One of the key steps to reducing our carbon footprint is decarbonising the transport sector. To that end, the world's leading car and truck manufacturers are racing to develop battery-powered electric vehicles (EVs) that will ultimately bring about the end of the internal combustion engine (ICE).

According to the International Energy Agency, EVs comprised 9 percent of total global vehicle sales in 2021 as electric car sales more than doubled to 6.6 million — that's triple their market share from two years earlier.

Australia is no exception — sales in the country tripled in 2021 to 20,665 EVs, up from 6,900 in 2020. Market share came in at 2 percent of all car sales in the nation versus 0.78 percent in 2020, as per the EV Council of Australia.


Overall EV sales are expected to rise to 26.8 million in 2030. This impressive growth in EV adoption represents an opportunity for investors, but also places tremendous pressure on mining companies to keep pace with demand for battery metals such as lithium, cobalt and of course copper. All of these are needed to produce the cars, and perhaps more significantly, the batteries that power them.

Copper's key role in electric vehicles

As mentioned, battery metals like lithium and cobalt are more commonly in the spotlight when it comes to the EV story. But copper has a key role that is only gaining more attention as time goes by.

According to Wood Mackenzie, EVs can use up to three and a half times as much copper as ICE passenger cars. Battery-powered buses, a key aspect of public transportation, are even more copper intensive, using between 11 and 16 times more copper than similar ICE passenger vehicles, depending on the size of the battery and the bus.

Due to its superior conductivity, EVs coming off assembly lines today rely on extensive copper wiring to connect their battery packs to vehicle electronics, while their batteries contain 8 percent copper on average.

What's more, it's estimated that eight times more lithium, nickel and copper will be required for annual EV production in 2030 compared to today — and that is a low forecast assuming only 40 percent EV sales penetration.

Notably, Morgan Stanley (NYSE:MS) has argued that copper is "the new oil" in recognition of how the metal has become an integral component of sustainable technologies as part of a "new industrial order," particularly with respect to EVs and other industrial sectors that rely on clean energy.

Meanwhile, in a May 2021 report, investment bank Goldman Sachs (NYSE:GS) states that "copper will be crucial in achieving decarbonization and replacing oil with renewable energy sources, and right now, the market is facing a supply crunch that could boost the price by more than 60 percent in four years." In addition, the firm predicts that by 2030, copper demand will grow nearly 600 percent to 5.4 million tonnes.

Does this mean that there will be a copper crunch between now and then?

"There is a question mark over whether miners can deliver enough supply for all applications of copper," Eleni Joannides, research director for copper at Wood Mackenzie, explained to the Investing News Network. "If you just consider EVs alone, in most of the world outside China, the extra demand for copper foil for EV batteries will be supplied by scrap. In China, it will be a mix of scrap and refined copper. Even under the most optimistic scenarios, EVs will represent only a small part of total copper demand."

Joannides does not believe that the world's leading EV manufacturers will face a battery shortage owing to a shortfall in copper supply. "It is unlikely that copper in and of itself will threaten battery production given all the other commodities required which have their own supply/demand dynamics. In the meantime, the copper foil industry is making good progress in announcing and building new projects and expansions across the globe."

That said, in the wake of Russia's invasion of Ukraine, along with a projected sustained period of higher oil prices, consumers may shift in even greater proportions away from ICE vehicles and toward EVs. Should prices for copper and the other metals required for battery production continue to soar as they have in recent months, battery manufacturers may pass the costs along to EV manufacturers — their sales figures could be blunted by consequent higher sticker price costs.

Joannides thinks copper will likely rise beyond the three to five year horizon. "This will have to be reflected in battery prices, and this may well affect the profitability of EV battery manufacturers. This could lead to difficulties in the market if EV battery prices become so expensive that EV makers are not prepared to pay for it," she said.

Will copper miners be able to meet demand?

One of the overriding concerns among transportation industry observers is the possibility of future supply chain bottlenecks for global metal producers. Although lithium receives most of the attention when it comes to EV sector commodities, copper is becoming an increasingly vital concern to the industry.

Within the last two years alone, the price of copper has more than doubled from a low of US$2.30 per pound to an all-time record high of US$4.78 at the beginning of March 2022.

Given the stagnation in copper production over the short term compared growing EV sales and corresponding demand for batteries, prices should be expected to stay at high levels and continue to rise over the course of the decade until new mining capacity is created.

However, Wood Mackenzie Principal Copper Analyst Will Tankard argues that copper supply shortage forecasts tend to be exaggerated. "There is always a projected supply gap in the copper market, but it never materialises, either because demand is weaker, or supply is stronger or there is more scrap available," he said.

"Scrap has always played a role as a buffer to the market, and in Wood Mackenzie’s view, scrap is likely to continue to increase its role as another avenue of supply. A look at the copper price signals clearly that the gauntlet has been laid down to the industry to deliver long-term copper production to enable the energy transition. The role of scrap, and thus the availability of scrap into the market, is also developing," added Tankard.

But all that might change as the world emerges out of the COVID-19 pandemic and demand for EVs accelerates. This is especially true in the current climate of rising oil prices, which have skyrocketed past the US$100 per barrel price point in 2022, making the comparative operating costs for EVs far more attractive compared to ICE cars.

This is the view of Bloomberg Senior Metals and Mining Analyst Yi Zhu, who last September said that copper demand will continue to rise in the face of rising demand for EV batteries.

"We think Doctor Copper can get capital boost at oil’s expense, as crude oil is vulnerable to EVs,” Zhu said. "Fuel demand may head for a structural decline while copper consumption could surge as battery power infrastructure develops. And capital could switch from oil-related assets to copper-related assets. The copper/oil ratio has traded above the average resistance level before the pandemic, which implies investor anticipation of a possible post-pandemic shift in both commodities’ price patterns."

How Australia's copper sector can help feed EVs

Rising prices may have the effect of incentivising Australian copper producers to increase exploration, expand capacity and otherwise increase production down the road to meet expected demand for the metal.

According to the most recent data provided by the US Geological Survey, Australian copper reserves are the second highest in the world as of 2021 at 93 million tonnes, behind Chile with 200 million tonnes. Australia is also a top 10 copper producer, and exports generated revenues of US$3.82 billion in 2021; industry analysts expect that figure to continue to rise for the rest of the decade and beyond.

The majority of the country's copper resources are concentrated at the Olympic Dam copper-uranium-gold deposit in South Australia and at the Mount Isa copper-lead-zinc deposit in Queensland.

Other significant Australian copper sources are the Northparkes copper-gold, CSA copper-lead-zinc and Girilambone copper deposits in New South Wales; the Ernest Henry, Osborne and Mammoth copper and copper-gold deposits at Selwyn in Queensland; the copper-zinc deposits at Golden Grove in Western Australia; and the Nifty copper deposit, also located in Western Australia.

For more details on copper in Australia, click through the links below:

Don’t forget to follow us @INN_Australia for real-time updates!

Securities Disclosure: I, Harold Von Kursk, currently hold no direct investment interest in any company mentioned in this article.

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Aside from copper, Mazumdar also spoke about financing, which he sees as the "big squeeze" facing the resource sector right now.

Joe Mazumdar: Copper is the Commodity of the Decade, Ways to Get Exposure youtu.be

Investors often focus on the commodities of the moment, but which have potential over the next decade?

Speaking to the Investing News Network at the recent Vancouver Resource Investment Conference (VRIC), Joe Mazumdar, editor of Exploration Insights, said copper is his pick.

"Some of it's battery metal exposure, it's construction," he said. "But also on the supply side, the lack of development projects and the higher permitting risk combined with more geopolitical risk in two of the major producers, Chile and Peru. They might have issues with production into a market (where) demand might grow."

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Perth, Australia - Cyprium Metals Limited is pleased to announce the Company's updated MRE for the Nifty copper deposit following completion of the successful Nifty west pit drilling program in 2021. Cyprium's previously disclosed MRE for Nifty was the maiden Nifty MRE under Cyprium's ownership. Managing Director Barry Cahill commented: "There is a significant increase in the contained copper metal tonnes in the ...
Perth, Australia (ABN Newswire) - Cyprium Metals Limited (ASX:CYM) is pleased to announce the Company's updated MRE for the Nifty copper deposit following completion of the successful Nifty west pit drilling program in 2021. Cyprium's previously disclosed MRE for Nifty was the maiden Nifty MRE under Cyprium's ownership.

Managing Director Barry Cahill commented:

"There is a significant increase in the contained copper metal tonnes in the latest Mineral Resource Estimate for Nifty. Once again, this demonstrates the quality and scale of the Nifty deposit, which remains open. The updated Mineral Resource Estimate provides additional copper metal inventory for the Nifty phase 1 oxide copper project and underpins a potential open pit mine-life of greater than 20 years.

Further assay results from the Nifty east drilling programme will be announced later this month. The results of this drilling programme, which targeted the shallower oxide zone of the deposit, are expected to further extend the Nifty phase 1 oxide mine-life."

The current Nifty MRE of 95.1Mt at 1.0% copper for a total contained copper inventory of 940,200t (refer to Table 1*) is the result of the completion of the successful Nifty west pit drilling program and Nifty Copper Project Restart Study. The Nifty west drilling program consisted of 71 RC holes for a total of 18,867 metres.

The Nifty Copper Project Restart Study is focussed on the development of the first phase of the project that involves a return to heap leaching and solvent extraction electrowinning (SX-EW) to produce copper metal cathode on site. The significant inventory and increase of heap leachable oxide mineralisation confirmed by this MRE (16.1Mt at 0.9% copper for approximately 144,300t of contained copper metal) presents additional upside opportunity on project economics. The drilling programmes completed at Nifty West and East were designed primarily to confirm the mineralisation and to improve the confidence, hence classification of inferred resource, plus possible extension of mineralisation.

The May 2022 Mineral Resource Estimate maintained uniform methodology, resource depletion, grade interpolation, density algorithms, QAQC protocols and classification codes as those reported and detailed in Cyprium's ASX Release "Nifty Mineral Resource Update" dated 17 November 2021.

*To view tables and figures, please visit:
https://abnnewswire.net/lnk/KR622JP0



About Cyprium Metals Ltd:

Cyprium Metals Limited (ASX:CYM) is poised to grow to a mid-tier mining business and manage a portfolio of Australian copper projects to deliver vital natural resources, strong shareholder returns and sustainable value for our stakeholders. We pursue this aim, in genuine partnerships with employees, customers, shareholders, local communities and other stakeholders, which is based on integrity, co-operation, transparency and mutual value creation.



Source:
Cyprium Metals Ltd

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Copper hit a record high in 2021, boosting copper companies even into 2022. Here are the best copper stocks on the ASX so far this year.

The copper price hit a record high in 2021, and analysts expect prices for the red metal to remain high. This strong copper market has been a boon for ASX copper stocks.

Copper prices rallied to above US$10,700 per tonne during the second quarter of last year on higher demand as the economy began opening back up following strict COVID-19 restrictions.

Although the copper outlook is tainted by a slowing real estate sector in China, demand for electric vehicles and renewable energy is expected to boost copper use in China and globally in 2022.


Several Australian copper stocks are performing well in this copper price environment.

Here the Investing News Network looks at the best ASX copper stocks of 2022 by year-to-date share price performance. The best ASX copper stocks list below was generated on February 9, 2022, using TradingView’s stock screener, and all copper stocks listed had market caps above AU$30 million at that time.

1. Alara Resources

Year-to-date gain: 233.33 percent; current share price: AU$0.08

First on this list of best ASX copper stocks is base and precious metals explorer and developer Alara Resources (ASX:AUQ). The company has projects in the Middle East, including the Al Washi-hi Majaza copper-gold project in Oman and the Khnaiguiyah zinc-copper project in Saudi Arabia.

Alara owns a 51 percent equity interest in Al Washi-hi Majaza, where initial mining activities, including pre-stripping of waste, began in early February. Ore mining is expected to start at the asset in the June quarter, with consistent ore recovery following toward the end of the year.

2. Critical Resources

Year-to-date gain: 189.47 percent; current share price: AU$0.11

Base metals-focused Critical Resources (ASX:CRR) has properties in Oman and Australia. The company's Sohar copper project in Oman has a JORC resource of 819,000 tonnes at 3.4 percent copper, equivalent to 28,000 tonnes of copper metal, and zinc and other base metals were historically mined at its Halls Peak project in New South Wales. Aside from those assets, Critical Resources holds lithium projects in Canada.

In early February, Critical Resources reported zinc, copper, lead and silver assay results from two extensional holes completed at Halls Peak's Gibsons prospect.

3. Cannindah Resources

Year-to-date gain: 82.35 percent; current share price: AU$0.31

With a focus on copper and gold, Cannindah Resources (ASX:CAE) is reviewing strategies for its New South Wales-based Mount Cannindah project, which holds a large porphyry-style copper-molybdenum-gold mineralised system. The company is also looking to move forward with exploration at its Piccadilly gold project in Queensland.

In late January, Cannindah Resources shared results from a vertical hole in the northern part of Mount Cannindah. Results include 81 metres at 0.3 percent copper, 0.6 grams per tonne gold and 22.5 grams per tonne silver.

4. Celsius Resources

Year-to-date gain: 50 percent; current share price: AU$0.03

Exploration and development company Celsius Resources (ASX:CLA) has a portfolio of copper and gold assets located in the Philippines, Namibia and Australia.

At its Maalinao-Caigutan-Biyog copper-gold project in the Philippines, the company completed a positive scoping study in December 2021 showing a 25 year mine life, a payback period of 2.7 years and a pre-tax internal rate of return of 35 percent. Drilling is also underway at Celsius’ other Philippines property, the Sagay copper-gold project.

5. Bougainville Copper

Year-to-date gain: 29.51 percent; current share price: AU$0.395

Bougainville Copper (ASX:BOC) states that its main goal is to work with communities in Papua New Guinea and the country's government to resume copper, gold and silver mining and exploration at the Panguna mine.

Panguna has been inactive since 1989, and while it was important to the nation's economy it has also been a source of controversy. There hasn't been any news from the company so far in 2022.

Don’t forget to follow us @INN_Australia for real-time updates!

Securities Disclosure: I, Melissa Pistilli, currently hold no direct investment interest in any company mentioned in this article.

Perth, Australia - Cyprium Metals Ltd has made considerable progress over the past year to return the iconic Nifty Copper Project to a profitable operating mine. There has been over 30kms of drilling completed at Nifty for mineral resource infill and extensions, metallurgical test-work, infrastructure sterilisation and waste characterisation. An updated JORC 2012 mineral resource estimate was issued in November 2021 ...
Perth, Australia (ABN Newswire) - Cyprium Metals Ltd (ASX:CYM) has made considerable progress over the past year to return the iconic Nifty Copper Project to a profitable operating mine. There has been over 30kms of drilling completed at Nifty for mineral resource infill and extensions, metallurgical test-work, infrastructure sterilisation and waste characterisation.

An updated JORC 2012 mineral resource estimate was issued in November 2021 for Nifty of 732,000 tonnes contained copper at an average grade of 1.6%. A further update of the Nifty mineral resource estimate will be undertaken during the first half of 2022 which will include the results from our infill and extensional drilling programmes that were completed during 2021.

Condition assessments have been completed on the existing infrastructure at Nifty which have resulted in a decision to proceed with the refurbishment of the SX-EW plant rather than purchase a new plant, upgrade of the communications infrastructure to 4G services and commence a mine site camp upgrade.

Site surveys, baseline studies and water management plans have been completed so that the various comprehensive regulatory approval submissions can be made in accordance with our projected timelines. Site visits to demonstrate the current state of the facilities and Cyprium's plans for the restart of the project have been well received with government, traditional owners and investors.

Currently, the optimum open pit economic design for the Nifty Re-start Study is based entirely on the measured and indicated categories of the updated Nifty mineral resource, with pit wall design incorporating the geotechnical studies undertaken in 2021. The current pit envelope does not include any increases to the mineral resource from the inferred conversion, infill or extensional drilling programmes completed during 2021. The final extended open pit mine design and schedule will be incorporated into the model once the expanded mineral resource is re-estimated during the first half of 2022. Incorporation of these drill results will in fact convert some material which is currently included as waste in the pit envelope, into ore, consequently further enhancing the already robust economics of the Nifty Re-Start Study.

*To view the full Annual Report, please visit:
https://abnnewswire.net/lnk/T3Q51S96



About Cyprium Metals Ltd:

Cyprium Metals Limited (ASX:CYM) is poised to grow to a mid-tier mining business and manage a portfolio of Australian copper projects to deliver vital natural resources, strong shareholder returns and sustainable value for our stakeholders. We pursue this aim, in genuine partnerships with employees, customers, shareholders, local communities and other stakeholders, which is based on integrity, co-operation, transparency and mutual value creation.



Source:
Cyprium Metals Ltd

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Perth, Australia - Cyprium Metals Ltd is pleased to announce a capital raising via a placement and a pro rata non-renounceable rights issue to raise up to approximately $26 million before costs. HIGHLIGHTS - Firm commitments received for a Placement to raise $16M at 11.5 cents per share - Additional pro rata non-renounceable entitlement offer to raise up to $10M o 1 new share for every 8 held on the record date at ...
Perth, Australia (ABN Newswire) - Cyprium Metals Ltd (ASX:CYM) is pleased to announce a capital raising via a placement and a pro rata non-renounceable rights issue to raise up to approximately $26 million before costs.

HIGHLIGHTS

- Firm commitments received for a Placement to raise $16M at 11.5 cents per share

- Additional pro rata non-renounceable entitlement offer to raise up to $10M

o 1 new share for every 8 held on the record date at 11.5 cents per share
o Offer will be open to all eligible Cyprium shareholders

- Funds raised will place Cyprium in a strong financial position to continue progressing the development of the Nifty Copper Project

- Equity raise supports recently announced $50M Offtake Prepayment Facility with Glencore

- Advanced discussions are continuing with Senior Debt counterparties

Managing Director Barry Cahill commented:

"The Board is very appreciative of the strong support shown from current shareholders and is pleased to welcome a number of new investors to the register.

Cyprium has made significant advances in the past 15 months both in terms of increasing the mineral resource estimate but also particularly in the areas of SX/EW and infrastructure refurbishment, government approvals and metallurgical optimisation.

With the completion of this capital raising, Cyprium will be able to continue to advance the senior debt financing, with the finalisation of the funding package enabling our construction plans and the production of copper metal plate on site in the second half of 2023."

The Company has received firm commitments in respect of a placement to issue approximately 139.1 million new shares (Placement Shares) at 11.5 cents each (Offer Price) to raise $16 million (Placement) from sophisticated and institutional investors.

The Company is also pleased to announce a non-renounceable pro rata entitlement offer at the Offer Price of one (1) new share for every eight (8) shares currently held by eligible shareholders to raise up to $10 million (Entitlement Offer).

The new shares to be issued under the Entitlement Offer will be issued at the same price as the Placement Shares.

Use of Funds

The Placement and Entitlement Offer proceeds will be applied as part of the funding strategy to finance the restart of the Nifty Copper Project which will aim to provide a sustainable, secure, and stable supply of copper metal at 25,000tpa.

As announced on 27 June 2022, Cyprium has entered into an exclusive Letter of Intent (LOI) with Glencore International AG for $50 million in respect of a copper cathode offtake secured prepayment facility, as part of the debt financing package for the restart of the Nifty Copper Project, which includes capital expenditure, contingencies, working capital, and financing costs. The LOI is a non-binding term sheet for both offtake arrangement and project funding and is part of the targeted AUD240 million to AUD260 million debt funding package to finance the restart of the Nifty Copper Project. The Company continues to advance discussions with senior debt providers who are undertaking due diligence activities and reviewing financing documentation.

Details of Placement

Pursuant to the terms of the Placement, the Company has agreed to issue approximately 139.1 million Placement Shares in the Company at the Offer Price of 11.5 cents per share to raise $16 million before costs, under the Company's existing placement capacity pursuant to ASX Listing Rule 7.1 (82,648,514 Placement Shares) and 7.1A (56,481,921 Placement Shares).

Subscribers for the Placement Shares will be entitled to participate in the Entitlement Offer.

Entitlement Offer

Under the Entitlement Offer, eligible shareholders will be able to subscribe for one (1) new ordinary share for every eight (8) existing fully paid ordinary shares held as at 5.00 pm (AEST time) on Friday, 8 July 2022 (Record Date) at the Offer Price.

The Offer Price represents a:

- 28.1% discount to last close on 27 June 2022;

- 19.6% discount to the 10-day VWAP up to and including 27 June 2022;

- 23.9% discount to the 15-day VWAP up to an including 27 June 2022; and

- 25.8% discount to the theoretical ex-rights issue price (TERP) to last close on 27 June 2022.

Cyprium will release a prospectus detailing the terms of the Entitlement Offer shortly, including details as to whether shareholders are eligible to participate in the Entitlement Offer and key risks (Prospectus). The Prospectus will include a personalised entitlement and acceptance form which will provide further details of how to participate in the Entitlement Offer.

Entitlements are non-renounceable and will not be tradeable on ASX or otherwise transferable. Shareholders who do not take up their entitlements will not receive any value in respect of those entitlements that they do not take up.

The Entitlement Offer will include a top up facility under which eligible shareholders who take up their full entitlement will have the opportunity to apply for additional shares from a pool of those not taken up by other eligible shareholders (Top Up Facility). In addition to the Top Up Facility, there will also be a general shortfall offer pursuant to which the Company may place any shares to non-eligible shareholders within three (3) months from the closing date of the Entitlement Offer.

Eligible shareholders should read the Prospectus carefully before making any investment decision regarding the Entitlement Offer. If you are in any doubt about the Entitlement Offer, you should consult your financial or other professional adviser.

Canaccord Genuity (Australia) Limited and Euroz Hartleys Limited are acting as Joint Lead Managers to the Placement. The fees payable to the Joint Lead Managers will be set out in further detail in the Prospectus.

Longreach Capital is acting as financial advisor and Steinepreis Paganin is acting as legal advisor to Cyprium.

*To view the capital structure post placement, please visit:
https://abnnewswire.net/lnk/009WA5D2



About Cyprium Metals Ltd:

Cyprium Metals Limited (ASX:CYM) is poised to grow to a mid-tier mining business and manage a portfolio of Australian copper projects to deliver vital natural resources, strong shareholder returns and sustainable value for our stakeholders. We pursue this aim, in genuine partnerships with employees, customers, shareholders, local communities and other stakeholders, which is based on integrity, co-operation, transparency and mutual value creation.



Source:
Cyprium Metals Ltd




Contact:
Barry Cahill
Executive Director
T: +61 8 6374 1550

Wayne Apted
Chief Financial Officer
and Company Secretary

Lexi OHalloran
Investor and Media Relations
E: lexi@janemorganmanagement.com.au
T: +61 404 577 076
E: info@cypriummetals.com

News Provided by ABN Newswire via QuoteMedia

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General Manager Matt Herbert described Ontario as an “undiscovered gem,” and spoke about the company’s work on its lithium projects in the province.


After making its ASX debut this past November, Green Technology Metals (ASX:GT1) has been hard at work in Ontario, Canada, where it holds three projects covering 35,000 hectares.

Speaking to the Investing News Network at the Prospectors & Developers Association of Canada (PDAC) convention, General Manager Matt Herbert described the province as an “undiscovered gem” with the potential to contribute to the lithium supply chain in an environmentally conscious manner.

“I think the opportunity there is to create some very, very green lithium,” he said.


“At the moment, a lot of lithium is mined in Western Australia, (then) shipped to China for processing; from China it goes to European battery markets. I think by the time that lithium arrives where it’s supposed to arrive it’s left itself a bit of a carbon footprint,” Herbert explained during the conversation. “We have a real opportunity here to leverage low-carbon lithium in a place that is really screaming for security.”

Green Technology Metals has already seen support from members of the Ontario government, including recently re-elected Premier Doug Ford, and Greg Rickford, who is the province’s minister of northern development, mines, natural resources and forestry, as well as its minister of indigenous affairs.

“Both are massive supporters of critical minerals,” said Herbert. “Those things are important when you’re at the permitting and approval stage, and that’s exactly where we’re at. We’re able to leverage those relationships really well, and there’s just no better place to be at the moment.”

Watch the interview above for more from Herbert on Green Technology Metals and its plans for the next six months. You can also click here for our recap of PDAC, and here for our full PDAC playlist on YouTube.

Don’t forget to follow us @INN_Australia for real-time updates!

Securities Disclosure: I, Charlotte McLeod, hold no direct investment interest in any company mentioned in this article.

Editorial Disclosure: Green Technology Metals is a client of the Investing News Network. This article is not paid-for content.

The Investing News Network does not guarantee the accuracy or thoroughness of the information reported in the interviews it conducts. The opinions expressed in these interviews do not reflect the opinions of the Investing News Network and do not constitute investment advice. All readers are encouraged to perform their own due diligence.

Housing the world’s largest deposits of lithium, Chile’s unique geological landscape and climate make it ideal for lithium brine extraction

As the world continues on the path towards a future dominated by clean energy, lithium’s importance only continues to grow. Demand for the battery metal has already reached an all-time high, increasing by 400 percent in 2021. What’s more, there is every indication that this growth will continue in 2022, with prices increasing by 126 percent in just the first quarter.

Currently, Australia and Chile are the two leading producers of lithium, respectively accounting for 46.3 percent and 23.9 percent of worldwide production. Both countries are jurisdictionally inclined to support the mining sector. However, Chile’s potential could one day see it outstrip even Australia where investment is concerned.

Housing the world’s largest deposits of lithium, Chile’s unique geological landscape and climate makes it ideal for lithium brine extraction. The country thus has a pivotal role to play in meeting demand and establishing a stable global supply chain.


A critical component of sustainability

Climate change is an undeniable problem, one which requires a collaborative effort to address. It is for this reason that governments around the world have all agreed to pursue full climate neutrality by 2050. Because combustion engines represent an inordinate percentage of greenhouse gas emissions, replacing them with electric vehicles (EV) is essential if any nation is to achieve their sustainability goals.

Lithium is used extensively in both consumer and professional electronics. It is also a staple metal in multiple other sectors, including mining, manufacturing and energy storage.

Given its cross-sector industrial importance, the battery metal was already in high demand.

The large-scale manufacturing of electric vehicles has caused this demand to increase exponentially. As multiple automotive manufacturers construct gigafactories to ramp up EV distribution, the need for lithium is growing well beyond our current production capacity.

Investors and mining companies can benefit by turning to jurisdictions like Chile to ramp up supply. The world’s migration towards a sustainable future simply cannot occur without lithium.

Lithium: Australia versus Chile

Although Australia houses impressive lithium reserves, the majority of the country’s stores occur in hard rock deposits. Mining these deposits is relatively inexpensive, but hard rock lithium operations also tend to have narrow margins compared to other methods. In particular, lithium brine extraction offers higher yields, greater efficiency and a lower overall environmental impact.

Currently, the largest lithium producer in Australia is Pilbara Minerals (ASX:PLS,OTC Pink:PILBF). Its flagship project, the Pilgangoora operation, is situated atop one of the world’s largest hard rock lithium deposits. It also jointly owns a pegmatite lithium project with Atlas Iron (ASX:AGO), the Mt Francisco project.

Geography represents Chile’s first major advantage over other jurisdictions. Alongside Bolivia and Argentina, Chile lays claim to a geographic region known as the Lithium Triangle. Located in the Andes in South America, it contains an estimated 68 percent of the world’s identified lithium resources.

The Lithium Triangle is home to a series of vast salt flats, beneath which sit incredibly lithium-rich brine pools. More promising still is the climate of the region, which is known for being incredibly hot and dry. This represents a considerable boon for extraction operations, which typically rely on evaporative processes.

A powerful investment opportunity

Chile’s mining sector has leveraged its arid geography to great effect. The country’s Salar de Atacama salt flat is the largest-producing brine deposit in the world. It is also home to several major lithium brine operations.

One of these is owned and operated by Albemarle (NYSE:ALB). Currently the largest business provider of lithium for electric vehicle batteries, Albemarle also operates a lithium carbonate plant at La Negra. According to an Albemarle spokesperson, the company has a long history in Chile backed by a unique contract.

SQM (NYSE:SQM) operates another major lithium brine operation in the salt flat. As the world’s largest lithium producer overall, the company recently announced plans to reduce brine extraction in the region by 50 percent by 2030. This announcement came in tandem with a commitment to reduce water usage across all its operations by 40 percent.

Finally, just south of Salar de Atacama is situated the highest-quality lithium pre-production project in Chile. Maricunga is jointly owned by Lithium Power International (ASX:LPI), Minera Salar Blanco and Li3 Energy. Situated just 250 kilometers from Chile’s coast, and 170 kilometers from the mining town of Copiapo, it’s said to possess characteristics directly comparable to Atacama. Maricunga is also adjacent to Highway 31, which connects Northern Chile to Argentina.

The most significant challenge to Chile’s growth, from an investment perspective, is sociopolitical. Although the country has a history of being relatively friendly towards the mining sector, its current government is exploring new legislation that could nationalize both copper and lithium. A new mining royalty bill is also in the works, which could increase tax rates by up to 80 percent.

It’s worth noting that not every investor considers the current political climate to be a risk. South32 (ASX:S32), a spinoff of BHP (ASX:BHP), recently invested US$1.55 billion to purchase a 45 percent stake in the Sierra Gorda copper mine, and a lithium auction held by Chile earlier this year saw Chinese manufacturing company BYD acquire extraction rights for 80,000 metric tons of lithium.

Takeaway

Chile is home to the largest, richest and most valuable lithium deposits in the world. For many investors, the high margins and low cost of lithium extraction in Chile more than make up for the potential of a few political speed bumps.

This INNSpired article is sponsored by Lithium Power International (ASX:LPI). This INNSpired article provides information that was sourced by the Investing News Network (INN) and approved by Lithium Power International in order to help investors learn more about the company. Lithium Power International is a client of INN. The company’s campaign fees pay for INN to create and update this INNSpired article.

This INNSpired article was written according to INN editorial standards to educate investors.

INN does not provide investment advice and the information on this profile should not be considered a recommendation to buy or sell any security. INN does not endorse or recommend the business, products, services or securities of any company profiled.

The information contained here is for information purposes only and is not to be construed as an offer or solicitation for the sale or purchase of securities. Readers should conduct their own research for all information publicly available concerning the company. Prior to making any investment decision, it is recommended that readers consult directly with Lithium Power International and seek advice from a qualified investment advisor.

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