It’s been a tough year for lithium as weak electric vehicle sales growth led to high stockpiles and sent prices of the metal tumbling.
Lithium’s top consumer China saw lithium prices sink in the September quarter, hit by lacklustre buying. Prices for Chinese spot battery-grade lithium carbonate fell by around 45% during the quarter to around 165,000 Yuan ($22,560) per tonne, that’s down 72% from the Chinese lithium carbonate benchmark’s all-time high in November 2022. According to Citi, the lithium price still faced a risk of falling a further 15% to 20%.
And since the quarter end, the lithium carbonate price has continued to decline to around 148,500 Yuan currently.
However, Citi suggests the current weakness could “set the market up for a strong rebound of the longer-term”.
Lithium prices are susceptible to high levels of volatility. Recent overcapacity in the energy storage sector — the second-biggest consumer of lithium — has eroded margins and weighed on prices.
Strong growth of both supply and demand means that only small changes need to happen for the supply or demand growth, or stocking or destocking, leading to large swings in balances.
Pilbara Minerals expects the demand for lithium raw materials to remain consistent in the current quarter, which is typically a stronger period for EV sales. Yet it expects market pricing for spodumene concentrate and lithium chemicals to continue to remain volatile in the near term, given the uncertain macroeconomic conditions and closely managed inventories in the supply chain.
The long-term outlook for lithium materials supply, however, remains positive with an expected structural deficit of lithium materials supply relative to the expected demand for lithium-based products such as electric vehicles and battery energy storage.
Ioneer
Emerging lithium-boron supplier, Ioneer Ltd (ASX:INR, OTC:GSCCF, NASDAQ:IONR), continued to progress toward a final investment decision and commencement of construction at its 100%-owned Rhyolite Ridge Lithium-Boron Project in Esmeralda County, Nevada, this past quarter.
“Rhyolite Ridge is one of a limited number of lithium projects in the US expected to begin production by 2026. The site’s rare mineralogy and presence of our meticulously engineered, on-site processing facility will allow Ioneer to provide a stable, long-term, socially, and environmentally responsible source of lithium and boron in and for the United States,” said Ioneer managing director Bernard Rowe.
The company continues preparations to commence construction in 2024 with steering and technical committees in place with partner Sibanye Stillwater ahead of a formal joint venture in 2024.
Progress continues to be made on engineering and procurement, including construction planning, securing long lead items, and ensuring deliverables are at an 'issued for construction' stage.
In September, the company announced findings from its latest leach tests conducted on low-boron (Type 3) mineralisation. The results further reinforced Rhyolite Ridge’s unique ability to help meet domestic lithium needs and demonstrated the material’s organic growth potential – currently excluded from project economics but located within the existing footprint of the proposed mine site.
“We look forward to completing the important federal permitting process, delivering these critical and valuable materials, and strengthening domestic EV supply chains,” said Rowe.
The company is well-positioned financially as it approaches being fully permitted, with conditional debt and equity commitments of nearly US$1.2 billion. It held total cash and cash equivalents as of September 30, of US$36.5 million, 70.7% of which was held in USD.
Pioneer continues to advance the project through the NEPA permitting process with no major issues or delays — a draft EIS is expected in Q4 2023.
Infinity Lithium
Infinity Lithium Corporation Ltd (ASX:INF) made a number of advancements in relation to the San José Lithium Project in Spain during the September quarter.
This included securing industrial land for a proposed process plant at San José, while mining and environmental submissions were progressed, including incorporating advancements in the proposed San José flowsheet.
An innovative new lithium conversion process, Li-Stream RPKTM Locked Cycle Test work, confirmed 90% lithium recoveries from ROM-to-Product and the production of battery-grade lithium hydroxide.
Infinity also made material improvements in processing recoveries at San José, providing significant potential improvements in lithium production, environmental profile, and economic outcomes that would be encompassed within the Class 4 Feasibility Study, to be released in the current quarter.
During the period, the company formalised an industrial partnership to deliver green energy in Cáceres.
Following the quarter end, an updated scoping study was completed. The study assessed the potential for the significant increase in production of battery-grade, lithium hydroxide monohydrate from the company’s proposed integrated lithium chemical conversion facility utilising a lithium-bearing hard rock mica as feedstock from an underground mineral extraction operation.
Infinity held cash of $11.3 million at September 30, while €18.8 million ($31 million) in grant funding has since been awarded for the San José project by the Spanish Government.
Piedmont Lithium
Piedmont Lithium Inc (ASX:NASDAQ:PLL, OTC:PLLTL) described the September quarter as transformational for the company as it made its first lithium concentrate shipments to customers and recorded its first revenue and profit from its joint-venture North American Lithium operation.
Now a revenue-generating company with the largest operating lithium mine in North America, Piedmont recorded adjusted quarterly net income of US$17 million and adjusted earnings per share of US$0.88.
The company generated revenue of US$47.1 million on sales of 29,011 dry metric tonnes (dmt) of lithium concentrate, with gross profit of US$23.8 million, reflecting a gross profit margin of 50.4%.
Piedmont says production is ramping up well and as of the quarter end it is on track to deliver full-year shipment guidance of around 56,500 dmt of lithium concentrate.
The company held cash and cash equivalents of US$94.5 million at September 30.
Piedmont president and CEO Keith Phillips said: "While we are pleased with Piedmont's operational and financial performances, our results were materially impacted by the 45% decline in spot lithium prices during the quarter.
“Virtually all of our offtake tonnage will eventually be sold under long-term contracts announced earlier this year, but initial shipments are being made on the spot market.
"The benchmark spodumene concentrate price fell from more than US$3,500/dmt at the start of the quarter to approximately US$1,900/dmt today, directly impacting our quarterly results as our spot shipments are settled at the spot price around the time of customer receipt.
"Piedmont expects to have two shipments in the fourth quarter and confirms our previous full-year outlook of shipping approximately 56,500 dmt of lithium concentrate.
"EV demand remains strong globally with unit sales growth of 35% year to date and global EV penetration a record high of 18% in 2023. We continue to expect the US electric vehicle market to grow significantly, in part, due to the positive stimulus provided by the Inflation Reduction Act.
“Further, with battery pack capacity for all EV types increasing and energy storage systems becoming a more substantial factor in the market, the total GWh of new battery capacity deployed has grown by nearly 50% this year. We believe the combination of growth in EV sales and total GWh deployed will drive continued lithium demand growth.
"With North American Lithium in production, we look forward to advancing the rest of our projects, with the assistance of federal government finance agencies and strategic partners where possible, and always with a view to minimising dilution to existing shareholders."
Global Lithium Resources
Global Lithium Resources Ltd (ASX:GL1) saw notable progress during the September quarter, including the latest upgrade to the mineral resource estimate at the Manna Lithium Project. This update was an excellent outcome, featuring a significant increase in both contained lithium oxide and grade.
Managing director Ron Mitchell said, “We look forward to further upgrades to the resources estimate as we progress a significant exploration campaign at Manna. This process took another step forward at Manna during the quarter with the commencement of our 50,000-metre drilling program at the project.
“These developments have Global Lithium well placed as we have entered the final quarter of CY2023, particularly as we move towards completing the definitive feasibility study for the Manna Project in Q1 2024.”
The company recommenced drilling at the Manna Lithium Project in August. This followed the signing of a land access agreement, and heritage surveys across the entire lease application, allowing the 50,000-metre RC and DD drilling program to begin.
By September 30, 22,000 metres had been drilled, specifically targeting further expansion of the project resource. It is also anticipated that an infill drilling campaign will lead to considerable resources in the measured classification to assist with mine planning.
The company also completed a significant upgrade of the exploration camp at the Manna Project to provide additional accommodation, operational and dining facilities to house the extra staffing levels required to safely run a program of this scale.
Latin Resources
During the quarter, Latin Resources Ltd (ASX:LRS, OTC:LRSRF) continued to progress activities at its 100%-owned Colina Lithium Project in Brazil, including the release of key outcomes of a preliminary economic assessment (PEA).
The technical and financial study demonstrated an NPV (after-tax) of A$3.6 billion, IRR of 132% and total life of mine revenue of A$12.6 billion. The PEA demonstrated a low-capital, two-phased operation that delivers high-quality SC5.5, and a 3% lithium oxide (SC3) spodumene tails concentrate product.
It features a fully sustainable mine design with simple DMS and spirals for fine tails processing, hydroelectricity supply, dry-stack tailings and recycled water to meet ESG standards.
The successful PEA results followed from dense media separation (DMS) test work that confirmed the ability to produce a high-grade, low impurity spodumene concentrate at pilot plant scale.
The DMS test work undertaken on ore from the Colina Deposit confirms the ability to produce a high-grade, low impurity spodumene concentrate. Results included a “remarkable” lithium stage recovery of 93.1% from the coarse sample to a spodumene concentrate grading 5.5% lithium oxide, utilising pilot scale DMS equipment.
Latin held $38.0 million in cash and investments as at 30 September 2023 and was added to the MSCI Global Small-Cap Index during the quarter.
Latin executive director Chris Gale said: "This has been an instrumental quarter for Latin Resources, with the release of our first feasibility study for the Colina Lithium Project in Brazil.
"The preliminary economic assessment exceeded our expectations, demonstrating a low-cost capex and a path for fast-tracking to production in 2026. The Colina Project is shaping up to be a world-class lithium mine, with very low operational costs.
"Successful metallurgical test results released during the quarter helped form inputs for the PEA, as DMS demonstrated an impressive 93.1% stage recovery to a spodumene concentrate grading of 5.5% lithium oxide.
"Our 65,000-metre 2023 drilling program continued during the quarter, with assay results confirming a new pegmatite discovery. The Colina Project hosts district scale potential, with drilling working towards a further increase of our existing mineral resource estimate.”
Lightning Minerals
Lightning Minerals Ltd (ASX:L1M) outlined a number of highlights from the quarter, including the signing of a binding agreement to acquire the Dalmas and Hiver lithium projects in James Bay, Quebec.
The company identified target areas of up to 2.7 kilometres long at Dalmas and 2.1 kilometres long at Hiver. Multispectral analysis identified multiple pegmatite target areas at the Dalmas and Hiver Projects, while 165 discreet signatures that form seven exploration target areas were identified.
At Dundas project, drilling was completed on tenement E63/2001, while infill soil sampling started at Dundas tenement E63/2000 to define drill targets and follow up on 218ppm lithium in soil anomaly.
Also during the quarter, CEO Alex Biggs was promoted to the position of managing director.
Biggs said, “The September quarter provided significant progress for the company as we continue to refine our exploration strategy at our Dundas Project in Western Australia. Completion of our phase 1 drilling has allowed us to refine our exploration strategy with focus now on defining drill targets on tenement E63/2000.
“It is also a great success to sign a binding agreement for the Dalmas and Hiver Projects in James Bay, Quebec. This provides a significant increase in exposure to lithium potential in one of the premier lithium regions globally. The company now holds highly prospective tenements with exposure to the green energy thematic in both Australia and Canada”.
Lithium Australia
Lithium Australia Ltd (ASX:LIT, OTC:LMMFF) collected a record 413 tonnes of mixed batteries for recycling during the quarter, a 29% lift on the previous quarter.
During the quarter, lithium-ion batteries represented 44% of collections, highlighting the company’s continued focus on these higher-margin batteries for recycling. The company expects collection volumes of lithium-ion battery to continue to grow, underpinned by strong partnerships including tier 1 electric vehicles and energy storage services manufacturers.
The company experienced a reduction in mixed metal dust sales during the quarter due to a decline in market prices for metals such as cobalt and nickel. But the impact from this is expected to be offset by growing collection volumes and ongoing process improvements, which increase copper quality and mixed metal dust yield.
The quarter also saw the company’s lithium ferro phosphate (LFP) cathode material match, or exceed, leading competitor products based on testing by NOVONIX.
The September quarter marked the fifth consecutive quarter of cash gross profit, with A$261,000 achieved, representing a cash gross profit margin of 17%.
Subsequent to quarter end, Lithium Australia received first payment from MinRes, highlighting significant partnership progress under the joint development agreement.
The company’s cash and listed investments position totalled A$7.9 million at quarter end, with the MinRes funds received after the quarter end.
Lithium Australia CEO Simon Linge said: “We are very excited by the significant operational progress and product validation achieved during the quarter. We were immensely proud to have signed the recent JDA with MinRes and are already seeing strong collaboration to date. We aim to begin piloting activities under the JDA as soon as possible.
“We have also delivered our fifth consecutive quarter of cash gross profit within the recycling division. With continued growth of lithium-ion battery collections and improved operational efficiencies, we expect to achieve our goal of reaching cash flow breakeven within the recycling business.”
Intra Energy Corp
Highlighting the quarter for Intra Energy Corporation Ltd (ASX:IEC) was the completion of its acquisition of the Llama project in Canada’s James Bay region.
After entering into a binding agreement in May to acquire 100% ownership of 123 mineral claims covering 63 sq. kilometres forming the Llama Lithium Project, the transaction was approved by shareholders in the September quarter. A further 12 claims adjacent to Llama were subsequently acquired, expanding the Llama land package to 75 sq. kilometres.
The claims were purchased from an unrelated vendor, on the advice of Intra’s Canadian geologists, for C$120,000 in cash and 40,000,000 fully paid shares.
The increased land package gives Intra Energy a substantial footprint with excellent exploration potential in the James Bay Region.
Exploration to identify drill targets at the Llama Lithium Project during the quarter identified multiple large-scale pegmatite dykes spread over several kilometres and 83 rock samples were collected.
The company also took significant strides forward at Yalgarra during the quarter. Todd Hibberd was appointed as principal geologist, tasked with evaluating work done and advancing to quality, high probability drill targets as quickly as possible.
Exploration at Yalgarra identified multiple pegmatite dykes and ongoing work vectoring in on multiple lithium and nickel-copper targets
The company is fully funded for the coming 12 months raising A$3.6 million in a share placement.
Green Technology Metals
Green Technology Metals Ltd (ASX:GT1, OTC:GTMLF) continued to make significant strides during the September quarter in its aim of becoming Ontario's first producer of lithium concentrates and chemicals.
The company noted the pivotal achievement of finalising its inaugural off-take agreement — also a first for Ontario — with its strategic partner LG Energy Solutions for 25% of the first five years of production. The agreement reinforces the credibility of the Seymour project and the company’s strategic direction.
The company also increased its global resource base during the quarter to 24.5 million tonnes at 1.14% lithium oxide. Substantial progress was also made in executing its integrated project strategy having commenced full-scale due diligence at the designated conversion facility site in Thunder Bay. Further conversion test work is underway with results expected in December.
A vertically integrated scoping study remains on track for delivery in Q4 2023 incorporating a staged development of multiple mine and process hubs feeding a central lithium conversion facility.
On the exploration front, an extensive field exploration program was undertaken across the company’s land holdings, enabling it to pinpoint new priority drill targets for our upcoming diamond drill campaigns. There was further success at the Root project, resulting in the release of an updated resource estimate for Root Bay.
A renewed exploration agreement was established with Whitesand First Nation, cementing support for the Seymour, Falcon, and Junior projects.
During the quarter, a new executive director and chief financial officer were appointed, positioning the company for the impending growth phase that it expects to commence later this year. A total of A$16.94 million in cash was on hand as of September 30.
The company expects to unveil its PEA in the current quarter and continue its exploration and development activities.
Dynamic Metals
Dynamic Metals Ltd (ASX:DYM) reported a productive third quarter as a listed entity, completing a comprehensive first-pass reconnaissance sampling program for lithium at the Pioneer Dome and 1,092 metres of RC drilling of nickel prospects, both of which are part of the Widgiemooltha Project.
Previous exploration activities were focused on gold and nickel potential, so limited historical geochemical information on lithium and related elements exists for this tenement.
During the quarter, the company completed a large first-pass regional soil program to obtain appropriate geochemical data for target generation at its Pioneer Dome lithium project’s Chalice South, which is adjacent to Essential Metals’ Dome North Lithium Project and covers 20 kilometres of strike along the highly prospective western side of the Pioneer Dome.
Following the quarter’s end, Dynamic announced the results of the program in which it identified a 2.8-kilometre lithium-enriched trend. Follow-up auger sampling has been completed and assays are pending.
During the period Dynamic continued to deliver the exploration activities proposed in the IPO and finished the quarter with a cash balance of $3.7 million.