Demand for lithium, the critical mineral driving the clean energy transition, is predicted to rise rapidly through to 2030.
For now, the strong growth in electric vehicle (EV) sales is the primary reason behind the surge in demand for the metal that has earned the moniker of ‘white gold’.
But as the world speeds up the shift to renewable energy beyond EV, Australia’s lithium miners are set to capitalise on their advantage in the booming industry.
Supply and demand disparity
According to McKinsey & Company, global lithium demand will reach 3.06 million tonnes of lithium carbonate equivalent (LCE) by 2030 from the current 720,000 tonnes, a growth of 20% annually.
This compares to the present annual supply of 750,000 tonnes of LCE and 890,000 tonnes from planned and probable projects by the end of the decade, hardly enough to satisfy the 26% annual growth projected for passenger EVs through 2030 alone.
In order to meet the shortfall in demand, an additional 1.42 million tonnes of annual LCE capacity must come online by 2030.
By then, McKinsey projects that lithium supply will meet, and even surpass demand, if the additional supply potential is realised.
Top lithium extractor
Australia is the world’s largest producer of spodumene, the mineral for lithium carbonate and lithium hydroxide, which in turn are the raw materials needed to make lithium batteries.
It also has the second-highest lithium ore reserves in the world.
Source: OCE June 2023 Resources and Energy Quarterly.
Production of spodumene from Australian mines is forecast to rise from 3.2 million tonnes in the year ending June 30, 2023, to 3.4 million tonnes by 2024 and to 4.0 million tonnes by 2025, Australia’s Office of the Chief Economist (OCE) said.
In LCE terms, this equates to 452,000 tonnes in 2023, 507,000 in 2024 and 596,000 tonnes in 2025.
“Project expansions and new mines will increase Australian lithium production, with a growing share of mine output refined domestically to produce lithium hydroxide,” the OCE said
“(As) sources of global lithium supply continue to diversify amid international efforts to strengthen critical minerals security, this provides further opportunities for investment in Australian lithium assets.”
In the year ending June 30, 2023, Australia’s export earnings from lithium are forecast to more than quadruple to A$19.5 billion from A$5.3 billion in financial year 2022.
The OCE added that the increase would be driven by lithium prices nearly tripling and the volume of spodumene exports increasing by 44%.
Lithium outlook. Source: OCE June 2023 Resources and Energy Quarterly.
Let’s take a look at what some of the Australian lithium miners were up to during the June quarter.
A look at select ASX lithium stocks
Global Lithium Resources
Global Lithium Resources Ltd (ASX:GL1) closed out a busy quarter ended June 30, 2023, with two major exploration campaigns at the Manna Lithium Project and the Marble Bar Lithium Project in Western Australia.
The lithium explorer also made a strategic investment of A$4.6 million in Kairos Minerals over the Roe Hills Lithium Project, adjacent to its Manna Lithium Project.
“The June quarter has been an important period for GL1 as we accelerated our CY2023 exploration programs at the Manna and Marble Bar Lithium Projects in Western Australia,” GL1 managing director Ron Mitchell said.
“The ongoing work on these projects will support the delivery of our definitive feasibility study at Manna in late CY2023.
“The results of our first stage of ore sorting at Manna, as well as the lodgement of a mining lease application and signing of a land access agreement for the project are significant steps forward for Manna.
Manna ore presented to Steinert ore sorter (left) and ore sorting machine (right).
“During the quarter, we also welcomed experienced mining executive Geoff Jones as the company’s new non-executive chair.
“Geoff has succeeded Warrick Hazeldine in the role as part of a chair transition that will drive the upcoming growth that we are anticipating at our WA lithium projects.”
Dynamic Metals
Dynamic Metals Ltd (ASX:DYM) added about seven kilometres of highly prospective nickel exploration land to its Widgiemooltha Project in Western Australia’s Goldfields region during the June quarter, bringing the total to 850 square kilometres.
The nickel, lithium and gold explorer wasted no time in identifying three nickel targets on the newly granted E15/1753 tenement, for which a Program of Work application has been submitted to the Department of Mines, Industry Regulation and Safety (DMIRS).
It also showcased the potential of its Lake Percy Project, with a maiden aircore and reverse circulation drill program of 102 holes for nearly 6,400 metres returning assays such as:
- 16 metres at 1.11% nickel from 32 metres and 645 parts per million (ppm) copper;
- 26 metres at 0.62% nickel from 20 metres and 145 ppm copper; and
- 6 metres at 0.47% nickel from 40 metres and 249 ppm copper.
Not to be outdone, drilling at the Dordie Far West (DFW) prospect returned strong nickel grades, including 16 metres at 1.96% nickel from 27 metres downhole and 5 metres at 2.84% nickel within the intersection.
The hunt here is continuing.
Lightning Minerals
Lightning Minerals Ltd (ASX:L1M) marked its quest for valuable lithium resources in Western Australia with a maiden drill program of up to 2,500 metres of reverse circulation drilling and 10,000 metres of aircore drilling at the Dundas Project.
The primary targets have been outcropping pegmatites in the north and a 4-square-kilometre lithium and rubidium soil anomaly in the southeast of the tenement.
During the quarter, the company also conducted a soil sampling program at Dundas North and revealed additional lithium in soil anomalies of up to 147 parts per million (ppm) within three target areas totalling about 35 square kilometres.
Also worth noting was a heritage agreement signed between Lightning Minerals and The Ngadju Native Aboriginal Title Corporation (NNTAC), which covers all of its Dundas tenements.
The company spent A$208,000 on exploration activities in the three months to June 30, mainly on the Dundas Project, and had cash and cash equivalents of A$4.69 million at the end of the period.
Forrestania Resources
Forrestania Resources Ltd (ASX:FRS) hit a home run with its maiden drilling at the Calypso target within its flagship Forrestania project in Western Australia’s southern Yilgarn region intersecting multiple lithium-bearing pegmatites up to 63 metres thick.
The explorer completed a total of 1,968 metres of drilling at the prospect, with 13 out of the 14 holes drilled hitting multiple stacked pegmatites.
At the South Iron Cap East target, also within the Forrestania project, six metres of spodumene-bearing pegmatite were logged from 40 metres in one of the holes during drilling.
The company believes that the intercept is a small component of a more extensive system.
Planning for a follow-up program to understand its orientation and enable targeting is already underway.
During the quarter, the company’s geologists mapped additional surface pegmatite outcrops at the Alexandra Bore/Breakaway Dam project in the Eastern Goldfields.
These pegmatites, ranging from 43 metres and up to 100 metres in strike length, have never been tested for lithium or lithium-caesium-tantalum (LCT) pathfinder minerals.
While they are located within greenstone or close to greenstone/granite contacts mapped by the Geological Survey of Western Australia, the area had only previously been explored for copper and gold.
With so much to explore, FRS launched an entitlement offer in June to raise more than A$1.935 million to help it advance the Australian projects as well as the new Hydra Project joint venture in Canada’s James Bay region.
Lithium Energy
Lithium Energy Ltd (ASX:LEL) celebrated a watershed quarter by delivering a maiden mineral resource (MRE) of 3.3 million tonnes of lithium carbonate equivalent (LCE) at the Solaroz Lithium Brine Project in Argentina.
The maiden MRE includes a high-grade core of 1.34 million tonnes of LCE with an average lithium concentration of 405 mg/l at a 350 mg/l lithium cut-off grade, establishing Solaroz as a highly strategic lithium asset.
This initial resource estimate is based on the drilling of five holes within a 4,777-hectare area.
Subsequent to the release of the MRE, the company hit its highest lithium concentration of 594 mg/l from drill hole SOZDD006, which it will use to review the MRE.
Exploration work here is ongoing.
Diamond drill rig at SOZDD0006 on Olaroz Salar.
Elsewhere, the company executed a landmark agreement with Xi’an Lanshen New Material Technology Co. Ltd to manufacture and commission a 3,000-tonnes-per-annum battery-grade lithium carbonate demonstration plant on the Mario Angel concession at Solaroz.
Using Lanshen’s proprietary sorbent-based DLE technology, LEL hopes to explore alternative lithium extraction technologies at minimal upfront capital cost as the China-based company will supply, build and initially operate the plant at its own expense.
Back in Australia, a pre-feasibility study (PFS) is being prepared for the development of a vertically integrated purified spherical graphite (PSG) manufacturing facility at the Burke Graphite Deposit in Queensland.
The PFS proposes to produce a 95% total graphitic carbon flake concentrate to be processed and purified and sold as an anode pre-cursor material for use in lithium-ion battery manufacturing or for battery energy storage solutions.
“In the coming quarter, the company is continuing with its drilling programme at Solaroz with the objective of achieving further resource upgrades,” LEL executive chairman William Johnson said in his quarterly review.
“The Solaroz scoping study and work with Lanshen will provide valuable information regarding the development alternatives for Solaroz.
“The Burke Graphite PFS will continue to advance with a PSG test-work programme now underway.”
Green Technology Metals
Green Technology Metals Ltd (ASX:GT1) has been steadfast in promoting its portfolio of lithium assets in Ontario, Canada, from exploration to development.
The company has development-ready projects in excess of 20 million tonnes, being Seymour in the Eastern Hub and Root in the Western Hub, each with their mineral resource estimates and technical programs underway.
During the June quarter, the Canadian-focused multi-asset lithium business, released an updated inferred MRE of 12.6 million tonnes at 1.21% Li2O for its Root Lithium Project, comprising resources from both the McCombe and Root Bay deposits.
Consultants inspecting the Root Bay Lithium deposit
It has also initiated a 3-stage field exploration across its 56,000-hectare land holding in Ontario to generate new priority drill targets for a diamond drill campaign later this year.
The program consists of:
- Phase 1 - Field exploration at Tape Lake target - Junior Lake, Superb Lake, Root, Allison. Infill drilling Root Bay.
- Phase 2 - Field exploration - Junior Lake, Pennock, North Seymour, Falcon.
- Phase 3 - Infill drilling at Seymour – exploration drilling on targets generated from above Phase 1 & 2 field exploration.
“Another busy quarter for GT1 as we welcomed our new strategic partner LG Energy Solution (LGES) who invested A$20 million at a 43% premium, further validating the Seymour project and our strategy to become Ontario’s first producer,” GT1 chief executive officer Luke Cox said.
“We also executed our first offtake agreement for the Seymour Project (with LGES), selling 25% of spodumene concentrate for the first five years, which is a significant milestone for the company as we rapidly advance our integrated lithium strategy in the Tier 1 jurisdiction of Ontario.”
LGES, the global battery manufacturer of the LG group of companies, subscribed for 21,739,130 new shares in GT1 at A$0.92 per share in May, representing 7.89% of GT1’s ordinary shares on issue.
Jindalee Resources
The quarter’s biggest development for Jindalee Resources Ltd (ASX:JRL) was the launch of the pre-feasibility study (PFS) on its 100%-owned McDermitt Lithium Project in Oregon, USA.
Engineering and construction giant Fluor (NYSE:FLR) Corporation was appointed to lead the study on the lithium deposit, the largest in North America with an inferred resource of 3 billion tonnes at 1,340 parts per million for 21.5 million tonnes of lithium carbonate equivalent (LCE).
“McDermitt is a very large, and potentially, strategically important domestic source of lithium for the US battery industry,” JRL chairman Justin Mannolini said in June, adding that Fluor expected to complete the PFS in late 2023.
The Perth-based exploration company also welcomed news that the US Bureau of Land Management (BLM) has begun inviting public comment for the project’s Exploration Plan of Operations (EPO), a process that is expected to take up to 12 months.
During the quarter, JRL’s exploration cost was A$203,000, spent mostly on McDermitt.
Latin Resources
Latin Resources Ltd (ASX:LRS, OTC:LRSRF) had an outstanding three months to June 30, when it lifted the mineral resource of the Colina deposit at the 100%-owned Salinas Lithium Project in Brazil by an impressive 241% to 45.2 million tonnes at 1.32% Li2O, reported above a cut-off of 0.5% Li2O.
With a strike length of more than 2.0 kilometres, the Colina Deposit is turning out to be a much larger scale exploration project than expected.
Updated MRE for the Colina Lithium Deposit.
LRS executive director Christopher Gale said: “This has been an impressive quarter for Latin Resources, as we have once again exceeded our expectations for the Salinas Lithium Project in Brazil.
“Our 65,000-metre 2023 drilling program commenced on site, with assay results confirming the growth potential of the Colina West Prospect.
“We are also thrilled to have announced a new tenement package for the project, which increases our holdings in the area by 367%, with a new total of 38,000 hectares.
“Our relationship with the State of Minas Gerais was further strengthened through the signing of a non-binding memorandum of understanding between Latin Resources and Invest Minas.
“This agreement will facilitate the fast-tracking of the company’s approvals and licensing, whilst we support the development of the lithium sector and employment opportunities in Minas Gerais,” Gale added.
Infinity Lithium Corporation
For Infinity Lithium Corporation Ltd (ASX:INF), the conclusion of local elections in the City of Cáceres in Spain that led to the newly-formed Regional Government of Extremadura was an immense relief.
The company’s 75%-owned San José Lithium Project in the Extremadura region is the European Union’s second-largest lithium deposit, which is why INF is eager to get cracking on the exploitation concession application (ECA) for the project.
It aims to submit the ECA to the authorities later this year.
“We welcome the announcement of the coalition in Extremadura and the finalisation of a new, proactive and dynamically aligned local and regional government,” INF chief executive officer and managing director Ryan Parkin said.
“The agreement between the parties in Extremadura has once again highlighted the critical importance of San José for the local community, and Europe, against the backdrop of increasing requirements for volumes of battery-grade lithium chemicals to meet targets set under the Critical Raw Materials Act.
“It is clear San José’s potential to provide meaningful and long-term supply can align generation opportunities for the local community and greater Extremadura region.”
INF is also eyeing a dual listing on one of Spain's four regional stock exchanges.
- Written by Julie Goh