The discovery of a gigantic deposit of lithium had raised hopes for the sleepy town of Manono in the southeast of the Democratic Republic of the Congo after a tin boom went bust years earlier.

Australia-based AVZ Minerals announced in 2019 that the Manono lithium-tin project in the DRC probably had the world’s largest untapped lithium deposit, with estimates of 400 million tonnes of lithium ore.

Lithium is essential in making rechargeable batteries for phones and electric vehicles, and is in high demand as countries around the world make the shift to green energy.

The stakes are huge and the rewards are great. But infighting and legal battles among shareholders for control of the Manono site is putting the project on hold.

The main fight pits AVZ against Chinese mining giant Zijin Mining in a case in the International Chamber of Commerce (ICC) International Court of Arbitration.

Zijin claims that through its DRC subsidiary Jin Cheng Mining it bought a 15 per cent stake in Dathcom, a joint venture established in 2016 that owns 100 per cent of the Manono lithium mine.

Zijin says it bought the stake from Cominiere, the DRC’s state-owned mining company, which had 25 per cent of Dathcom under a 2017 deal.

As part of the deal, AVZ had a 60 per cent equity stake, while Dathomir Mining Resources (Dathomir) had the remaining 15 per cent.

Zijin said Cominiere agreed to transfer a 15 per cent interest in Dathcom to Jin Cheng, and the two companies set up a joint venture, Katamba Mining, to explore and develop two greenfield projects at the periphery of the Manono mine.

“Zijin Mining’s purchase price for its 15 per cent stake in the Manono project was at fair market value and includes other provisions that benefit the local community and the DRC,” Sun Kuiyuan, Zijin’s in-house legal counsel, said.

“The sale was subsequently approved at a Dathcom extraordinary general meeting, and lawfully registered at the RCCM [Registre du Commerce et du Crédit Mobilier].”

But AVZ disputes suggestions that Cominiere transferred 15 per cent to Zijin, saying they are “spurious in nature, without merit, containing fundamental and material errors, and having no substance or foundation in fact or law”.

The Australian company says such a transfer would have ignored its right to buy the stake.

“Any such transfer would be subject to the terms and conditions of the existing articles of association of Dathcom as well as the Dathcom shareholders agreement,” AVZ said in its 2022 annual report released on October 17.

“AVZ confirms that Cominière breached the pre-emptive rights of AVZI under the shareholders agreement by purporting to transfer a 15 per cent interest to Jin Cheng, making it invalid and of no force or effect.”

AVZ said it continued to “take all necessary action to resist these vexatious and meritless claims and to protect its and Dathcom’s interests”.

Lithium is essential in making rechargeable batteries for electric vehicles. Photo: AFP

Zijin reportedly paid US$33.4 million for the Cominière share, well above AVZ’s counter-offer of US$15 million.

In a letter dated July 21, 2021, Cominiere director general Athanase Mwamba Misao wrote to AVZ telling it Zijin had expressed interest in acquiring at least 15 per cent of the share capital.

“Having received the green light from the board of directors and the general assembly of Cominiere shareholders to start negotiations with this group, we held a meeting with Zijin on July 14, 2021, during which Zijin expressed its willingness to enter the capital of our joint venture with at least 15 per cent of the share capital,” the letter said.

AVZ replied a few weeks later, opposing the move to sell shares to an outsider and saying it was interested in buying the stake.

“AVZ Minerals hereby notifies you of its willingness to receive the benefit of the right of first refusal, which according to our statutes requires that the shares be first offered and then sold to the shareholders, but this is also in accordance with the agreements between the parties in the Joint Venture agreement of 2017,” AVZ said in its letter to Cominiere.

It warned that any transaction on the sale of shares between shareholders who have discussions outside the company violated corporate governance, the joint venture agreement and the statutes of the company.

These issues are now before the ICC International Court of Arbitration, which is expected to start hearing the case next year.

Another issue is the claim that AVZ acquired a 15 per cent stake from Dathomir, increasing its shareholding to 75 per cent.

However, Dathomir has denied it sold its shares, saying in court documents that although it initially agreed to sell a 5 per cent stake and later another 10 per cent stake, AVZ failed to pay the agreed amounts in time.

Dathomir, owned by a long-time Chinese investor in the country Cong Maohuai, sued in the Congo courts to annul the deal and won.

And in September, the Commercial Court of Lubumbashi suspended the deal, stopping AVZ from buying the shares.

“The transfer of the shares, which were the subject of the sale, to the benefit of the purchaser AVZ International Ltd could only take place after payment in full of the agreed sums; this was not the case for the plaintiff,” Dathomir argued in court.

The Commercial Court of Lubumbashi “ordered the suspension of the payment of the balances of the prices of US$15,000,000 and US$5,000,000 in the two contracts of sale of shares of 5 per cent and 10 per cent that have occurred between the claimant and the first defendant, AVZ International Ltd, while waiting for the arbitration judge to decide on the merits of the case”.

However, AVZ insists it has a 75 per cent stake in Dathcom after acquiring the 15 per cent shareholding from Dathomir.

“AVZI duly completed each of the Dathomir sale and purchase agreements in August 2021, including payment within the required period, and thereby legally acquired a further 15 per cent interest in Dathcom,” it said in its response to the court’s decision.

It said it considered the court’s decision immaterial. “AVZ confirms that it retains legal title to a 75 per cent interest in the Manono project and its pre-emptive rights over the balance of the project.”

AVZ shares remain suspended from trading pending the completion of the sale of its 24 per cent stake in Manono to Chinese battery maker Suzhou CATH Energy Technologies (CATH) for US$240 million.

If the sale goes through and AVZ does not have Dathomir’s 15 per cent share, AVZ’s stake will be reduced to 36 per cent.

While AVZ is based in Australia, its top shareholders, including Yibin Tianyi Lithium Industry, CATH, and Huayou International Mining, are Chinese. Observers say this could mean that the fight for the control of the Manono lithium site is among Chinese mining giants.

Source: South China Morning Post

When the oil market liberalized in the 1970s, a group of commodity trading buccaneers led by the infamous Marc Rich made fortunes by connecting buyers and sellers and surfing the price swings of this newly tradable commodity. Half a century later, some of Rich’s spiritual descendants are hoping to pull off a similar trick in lithium. 

A vital component in most electric-vehicle batteries, lithium is becoming one of the world’s most important commodities. Prices have soared to unprecedented levels as demand forecasts keep growing, leaving automakers scrambling to secure future supplies.

Yet until fairly recently, it’s been almost impossible to trade. Prices would be fixed in long-term private contracts between the handful of dominant suppliers and their customers, with no need for middlemen. Now, the surging demand is shaking up the way that lithium is bought and sold: Many supply deals have become dramatically shorter — with floating prices linked to the spot market — while exchanges from Chicago to Singapore are experimenting with new futures contracts.

Lithium Prices Skyrocket

Surging prices for the battery material are piling pressure on car-makers

And it’s getting the traders’ attention. Companies like Trafigura Group and Glencore Plc that make money moving commodities from copper to crude and coal around the world, are starting to wade into the lithium market. Traders say they can help the market broaden and mature, and reduce risks for other players in the supply chain. Some, like Trafigura and Carlyle-backed Traxys SA, are also investing in new production sources.

“The activity of traders in the lithium market should make this a more transparent and efficient market over time,” said Martim Facada, a lithium trader at Traxys. “It’s like oil in the 70s when governments would sell to consumers but then traders started providing services and that helped growing and developing the market faster. Lithium’s starting to go through that process.”

Of course, the comparison with oil 50 years ago isn’t a perfect one. The lithium market is tiny compared with more established and liquid commodity markets — annual world oil production is worth more than $3 trillion at current prices, versus $30 billion for lithium. The metal is also refined into highly specialized chemicals that some experts argue are much less fungible. 

Lithium Is a Small But Rapidly Growing Market

The approximate value of annual mined lithium production is dwarfed by copper

One of the concerns in the lithium market is that the extreme supply shortages create a risk that prices rise so high, or metal becomes so difficult to access, that automakers have to stop buying.

Commodity traders have a long history of squeezes and shocks in commodity markets, and the high stakes in lithium — so crucial to the success of the world’s decarbonization efforts — could leave them open to criticism. But despite the industry’s swashbuckling reputation, the traders insist they are treading carefully and are focused on helping to alleviate shortages, not make them worse. 

“If a trader is to get involved, it needs to be done with an entirely different approach,” said Socrates Economou, Trafigura’s head of nickel and cobalt trading, who also oversees lithium. “You already have a price that can lead to demand destruction — if you’re going to have market participants driving the price higher, I don’t see how this market can sustain itself.”

Trafigura estimates demand will hit 800,000 tons of lithium carbonate equivalent this year — overshooting supply by 140,000 tons — and sees demand rising by a further 200,000 to 250,000 tons annually through 2025.

Mining Investment Lags in the EV Revolution

And while the world needs more and more lithium, investment in new supply has not kept pace with rising demand. Trafigura’s focus so far has been on tying up deals with early stage mining and refining projects. Traxys, another early mover into the industry,  is taking a similar approach, scouring the globe for new sources of supply and helping to nudge them into production. The aim is to make money increasing the overall flow to car-makers, said Facada.

Other traders are also looking at lithium. Glencore, which is the largest producer of another key battery metal, cobalt, has invested in recycling startup Li-Cycle Holdings Corp. and is thinking about starting to trade lithium produced by the company, as well as third-party material. 

Traders IXM, Transamine SA and Mercuria Energy Group Ltd. have all set up lithium trading books in recent years, while Japan’s Mitsui & Co. has long been active in the sector.

The traders are stepping into the lithium market at a time of dramatic transformation. For years, the main customers for lithium producers were largely niche manufacturers in sectors like pharmaceuticals and industrial lubricants. Now, as carmakers have taken over as the biggest buyers, miners have been shifting towards a shorter-term pricing model that better reflects the mismatch between demand and supply. It’s a trend that’s drawn comparison to a seismic overhaul in the iron ore market as producers shifted to spot pricing in the 2000s, but it’s placing a strain on consumers and producers alike.

Tesla Inc. CEO Elon Musk has said that spot prices have become “crazy expensive,” and after years of urging producers to supply more, he’s stepping up efforts to refine it himself. Meanwhile, investors are pressuring top miners like Albemarle Corp. to shift their contracts over spot pricing more aggressively, potentially adding to the strain on their customers as the buying frenzy continues.

It will probably take some time before lithium matures to become more of a tradable commodity market, said Kent Masters, chief executive of Albemarle, the world’s largest lithium producer. With the spot market growing, the next key milestone for the industry will be the development of liquid futures contracts.

“We do think ultimately there’ll be an instrument out there where you can hedge lithium prices or speculate on the market financially,” he said in an interview. “It’s a good thing once it matures. But it’s going to take some time — it’s not today.”

In addition to helping make markets more efficient, traders say they can also manage risks for automakers and battery producers that are starting to look at mining projects and investments in a way that would have been unthinkable for many just a few years ago, as supply fears begin to rise. That will take them into riskier jurisdictions than they’re used to operating in, and leave them exposed to cost blowouts and wild price swings that are common to the mining industry.

“One of the roles we play is to connect different levels of supply chain to provide some level of price protection,” said Claire Blanchelande, Trafigura’s head lithium trader. “In addition to banks getting involved, car-makers are also getting comfortable because of our involvement.” 

Source: Bloomberg

The global demand for lithium is reaching new heights.

The lithium market has witnessed numerous price increases throughout the year. Additionally, the production of lithium, like other raw materials, is failing to keep up with demand. In fact, demand for lithium has been skyrocketing in recent years, in large part as the result of the ever-expanding electric vehicle (EVs) market.

According to Platts Analytics, global plug-in light-duty EV sales are expected to rise to 6.5 million units in 2022 and 10.5 million units in 2025, up from an estimated 6 million units in 2021 and 3.1 million units in 2020.

Lithium-ion batteries are being rapidly adopted due to their compact size, rechargeability, recyclability and high-density energy output. Infinity Stone Ventures Corp. (OTC: GEMSF) (CSE: GEMS), BrightRock Gold Corp. (OTC: BRGC), Patriot Battery Metals Inc. (OTC: PMETF), Standard Lithium Ltd. (NYSE: SLI), Snow Lake Resources Ltd. (NASDAQ: LITM)

While the EV industry remains in its infancy even as battery technology advances, demand for lithium in the sector is only expected to accelerate.

William Tokash, Senior Research Analyst with Navigant Research, said:

The push by automotive original equipment manufacturers (OEMs) and battery manufacturers to continually reduce battery pack costs continues.

And, the Global Lithium Market size was estimated at USD 5.5 Billion in 2021 and expected to reach USD 9.8 Billion in 2026, at a Compound Annual Growth Rate (CAGR) 11.93%, according to ResearchAndMarkets.

Infinity Stone Ventures Corp. (OTCQB: GEMSF) (CSE: GEMS) announced earlier this month breaking news, “that it has entered into an option agreement to acquire an additional 1,336 hectares directly adjacent to the Company’s Hellcat Project (the “New Claim Block”), which is part of Infinity Stone’s larger Camaro Project, near Patriot Battery Metals (“PMET” or “Patriot”) Corvette Lithium Discovery in the James Bay Region of Quebec.

The block is contiguous with the northwestern boundary of Infinity Stone’s Hellcat Project. The newly acquired area hosts an additional five pegmatite occurrences, with an additional 11 appearing in the southeastern Hellcat Project.

The fall exploration program, conducted by Axiom Exploration Group, Infinity Stone’s contracted technical team, (the “Fall Program”) was extremely successful in confirming historically mapped pegmatites and identified new showings.

87 samples were collected over 3850 hectares of claims adjacent to the Patriot discovery. The samples have been shipped to Saskatchewan Research Council (“SRC”) lab in Saskatoon, Sask., with assay results expected to be returned in the coming weeks.

One of the significant highlights of the Fall Program was the identification of a cluster of highly prospective pegmatitic dykes and cross cutting structures near the northern margin of the Hellcat claims extending to the north, into the newly acquired claim area.

The white, coarse grained, pegmatite dykes in this area were mineralogically characterized by tourmaline, garnet, and muscovite which are common LCT (Lithium-Cesium-Tantalum) pegmatite indicator minerals in the district.

The New Claim Block is underlain by 9 km of strike length of underexplored greenstone and metasediments of the Mesoarchean Rouget formation and Neoarchean Marbot formation respectively.

The under-explored Rouget formation greenstone belt represents an attractive exploration target which is geologically similar and proximal to the Guyer Group greenstone which hosts the PMET Corvette Pegmatites.

Zayn Kalyan, CEO of Infinity Stone, said:

Following our recent Fall Program, we moved quickly to expand our footprint and focus on the most prospective areas of the Camaro Project in James Bay.

“The identification of tourmaline, garnet, and muscovite, in pegmatites on the expanded Hellcat have given us an area of considerable interest and will be critical to our exploration program moving forward,” furthered Mr. Kalyan…

Qualified Person – Technical information in this news release has been reviewed and approved by Case Lewis, P.Geo., a “Qualified Person” as defined under NI 43-101 Standards of Disclosure for Mineral Projects and a director of the Company.

BrightRock Gold Corp. (OTC: BRGC) announced on August 29^th, that the team at Red Beryl Mining Company continues their work on an extensive mapping program of the completed 1400 acre expansion. BrightRock is excited to announce that the team has discovered a second mine with a possible substantial lithium deposit.

The Lone Giant Prospect approximately 0.38 miles from the recent P. and G. Beryl discovery. BRGC CEO Mac J. Shahsavar, P. Eng. Commented “Steven Cyros has been commissioned to do an on ground inspection and a live video at both the P. and G Beryl and Lone Giant Prospect.

BrightRock Gold will release the Inspection Video shortly for our investors’ viewing. We continue to establish ourselves as a major contender in the lithium space. With the recent 1400 acre expansion, discovery of two additional historic mines, we are developing a portfolio of lithium-rich assets to become a major supplier of lithium based products.”

Patriot Battery Metals Inc. (OTCQB: PMETF) announced on October 12^th, core assay results for twelve (12) additional drill holes (CV22-040, 041, 045, 047 through 054, and 056) from its 2022 drill campaign at its wholly owned Corvette Property (the “Property”), located in the James Bay Region of Quebec.

The primary drill area is focused at the CV5 Pegmatite, located approximately 13.5 km south of the regional and all-weather Trans-Taiga Road and powerline infrastructure with two drills currently coring. A third drill rig has been active at the CV13 pegmatite cluster for initial drill testing since early September.

Standard Lithium Ltd. (NYSE: SLI) provided an update on September 7th, on its first commercial lithium plant in Arkansas.

Dr. Andy Robinson, President and COO of Standard Lithium commented:

The award of this FEED study marks a significant milestone for Standard Lithium as it moves the Company and all our project partners closer to commercialization.

“Our internal project team went through a rigorous competitive selection process, and we are delighted to work with OPD and its partners in KES and M3 Engineering to design our first commercial facility and move towards an EPC contract and then to construction.”

“The selection process and study award are further examples of Standard Lithium’s commitment to disciplined and responsible project development. Commercial discussions with Lanxess that will support the construction and operation of the first commercial plant are ongoing, as are all supporting studies such as permitting, geotechnical investigations and engineering integration with Lanxess’ existing infrastructure.”

Snow Lake Resources Ltd. (NASDAQ: LITM) announced on October 4^th, hosted LG Energy Solution in Manitoba, Canada on September 13th to explore the potential next step towards building a domestic supply chain for the North American electric vehicle market. 

Cliff Cullen, Manitoba’s Deputy Premier commented:

Companies such as LG Energy Solution and Snow Lake Lithium are leading the exploration and development of critical minerals that will be key to helping the world pursue the goal of decarbonisation.

Philip Gross, CEO Snow Lake Lithium said:

The visit was a great success and there is an exceptional opportunity here in Manitoba to establish a strong domestic supply chain for the US automobile industry.

“Following our exciting collaboration with world-leading LG Energy Solution we are confident that our rock to road battery supply chain will help the electric vehicle market in North America.”

Source: Batteries News

Paris-headquartered minerals giant Imerys plans to develop a lithium extraction project that it’s hoped will help meet demand and secure supply for Europe’s emerging electric vehicle market.

In a statement Monday, Imerys said its Emili Project would be located at a site in the center of France, with the company targeting 34,000 metric tons of lithium hydroxide production each year from 2028.

According to the business, this level of production would be enough to “equip approximately 700,000 electrical vehicles per year.”

Alongside its use in cell phones, computers, tablets and a host of other gadgets synonymous with modern life, lithium — which some have dubbed “white gold” — is crucial to the batteries that power electric vehicles.

The project being planned by Imerys is taking shape at a time when major economies like the EU are looking to ramp up the number of electric vehicles on their roads.

The EU plans to stop the sale of new diesel and gasoline cars and vans from 2035. The U.K., which left the EU on Jan. 31, 2020, is pursuing similar targets.

With demand for lithium rising, the European Union — of which France is a member — is attempting to shore up its own supplies and reduce dependency on other parts of the world.   

In a translation of her State of the Union speech last month, European Commission President Ursula von der Leyen said “lithium and rare earths will soon be more important than oil and gas.”

As well as addressing security of supply, von der Leyen, who switched between several languages during her speech, also stressed the importance of processing.

“Today, China controls the global processing industry,” she said. “Almost 90% … of rare earth[s] and 60% of lithium are processed in China.”

“So we will identify strategic projects all along the supply chain, from extracting to refining, from processing to recycling,” she added. “And we will build up strategic reserves where supply is at risk.”

Back in France, Imerys said it was finalizing what it described as a “technical scoping study” in order to “explore various operational options and refine geological and industrial aspects relating to the lithium extraction and processing method.”

The site selected for the project has, since the end of the 19^th century, been used to produce a type of clay called kaolin for use in the ceramics industry.

The construction capital expenditure of the proposed lithium project is estimated to be around 1 billion euros (roughly $980 million), Imerys added.

“Upon successful completion, the project would contribute to the French and European Union’s energy transition ambitions,” the company said. “It would also increase Europe’s industrial sovereignty at a time when car and battery manufacturers are heavily dependent on imported lithium, which is a key element in the energy transition.”

In recent years, a range of factors has created pressure points when it comes to the supply of the materials crucial for EVs, an issue the International Energy Agency highlighted earlier this year in its Global EV Outlook.

“The rapid increase in EV sales during the pandemic has tested the resilience of battery supply chains, and Russia’s war in Ukraine has further exacerbated the challenge,” the IEA’s report noted, adding that prices of materials like lithium, cobalt and nickel have soared.

“In May 2022, lithium prices were over seven times higher than at the start of 2021,” it added. “Unprecedented battery demand and a lack of structural investment in new supply capacity are key factors.”

In a recent interview with CNBC, the CEO of Mercedes-Benz sketched out the current state of play, as he saw it when it came to the raw materials required for EVs and their batteries.

“Raw material prices have been quite volatile in the last 12 to 18 months — some have spiked and actually some have come back down again,” Ola Kallenius said.

“But it is true as we become electric, all-electric and more and more automakers go into the electric space, there is a need to increase mining capacities and refining capacities for lithium, nickel, and some of those raw materials that are needed to produce electric cars.”

“We have everything that we need now, but we need to look into the mid to long-term and work with the mining industry here to increase capacities.”

Source: CNBC

Shortly before arriving at the Paris Motor Show on Monday, French President Emmanuel Macron told the financial daily Les Echos that his administration wanted to make electric vehicles “accessible to everyone”.

Macron then proceeded to announce a series of measures to enable households to acquire electric vehicles. With the EU seeking to ban the sale of combustion engine vehicles from 2035, France is trying to gradually phase out fossil-fuel cars. While the move is seen as an essential step on the road to energy transition, it also poses a serious problem: it will require massive quantities of metals needed to manufacture batteries, especially lithium.

The figures speak for themselves. Since 2015, production volumes of lithium – also known as “white gold” – have tripled worldwide, reaching 100,000 tonnes per year by 2021, according to the International Energy Agency. The volumes could increase sevenfold by 2030. At the European level, about 35 times more lithium will be needed in 2050 than today, according to an April study by KU Leuven, a Catholic research university in Belgium.

“We are at a stage where all countries are starting their energy transition more or less at the same time and this generates very significant metal needs,” noted Olivier Vidal, a geologist and director of research at the French National Centre for Scientific Research (CNRS). “This will certainly create tensions in the coming years, with expected increases in costs and, possibly, supply difficulties. So, there is a real strategic and sovereignty issue for states.”

The European Commission is well aware of these concerns and included lithium in the list of critical raw materials with a risk of shortage, back in 2020. Lithium “will soon be even more important than oil and gas”, said European Commission chief Ursula von der Leyen in September 2022.

Extraction projects in their infancy

Lithium production today is dominated by just a handful of countries: Australia, which has 20% of the world’s reserves of “white gold”, and Argentina, Chile and Bolivia, which have 60%. China, on the other hand, was an early investor in refining and controls 17% of the world’s lithium production. With just five countries controlling 90% of world production, the International Energy Agency calls it a “quasi-monopoly” situation.

Europe hopes to make the most of the new “white gold” rush by exploiting its own subsoil. The continent’s main reserves are in Portugal, Germany, Austria and Finland. In France, the French Geological and Mining Research Bureau (BRGM) drew up an inventory in 2018 highlighting reserves in Alsace, the Massif Central region, as well as in the Armorican Massif area in Brittany.

Europe’s lithium extraction and production projects have been mostly undertaken by small and medium-scale companies across the continent. “The most successful ones are in Finland. Lithium production could start in 2024 thanks to the exploitation of a small mining site located about 600 km north of Helsinki,” explained Christian Hocquard, a geologist-economist and co-author of a book on lithium energy transition. “In the Czech Republic, an Australian company, European Metals, wants to exploit old tin mines located north of Prague. There are similar projects in Germany and Austria,” he noted.

“These are generally minor projects, carried out by small companies. The big ones prefer to invest in Australia or Latin America,” explained Hocquard. “Few of them will see the light of day, blocked by the difficulties of obtaining permits but above all due to resistance from local communities,” he predicted.

Facing the environmental consequences of our consumption

Mining projects often faced public discontent. In Portugal, an open-pit mine – the largest in Western Europe – was supposed to be built in 2026 in the village of Covas do Barroso. Work has however been currently suspended following numerous protests. In Serbia, the opening of the Jedar mine was cancelled a few months before the January 2022 presidential election. In France, Barbara Pompili, former ecological transition minister, floated the idea of exploiting lithium in the tiny village of Tréguennec, in Brittany’s Finistère region back in February 2021. The area however is classified as a protected zone and sparked a local outcry.

Lithium extraction “produces considerable volumes of waste that must then be stored. The waste can also lead to water or air pollution,” explained Vidal.

While Vidal views the outcry as “completely understandable”, he nevertheless supports these projects. “It would be much more ethical. We consume lithium daily, it would be normal for us to suffer the impacts related to our use. Today, this pollution already exists, but in other countries, far from our eyes. This would raise awareness among users, who would be confronted with the impacts of their consumption,” he said.

France looks to ‘green lithium’

France, for its part, is studying an alternative, called the extraction of “green lithium”. Unlike extractions from rocks or salt deserts, which function like traditional mines, “green lithium” is produced from geothermal sources, with an extraction method similar to that of a well. In France’s Alsace region, the European project EuGeLi (for European Geothermal Lithium) is a pioneer in this field. It recently succeeded in extracting its first kilograms of lithium using this technique. “For the time being, however, the technique remains too expensive to be considered on an industrial level,” noted Hocquard.

The other alternative is to focus on refining lithium rather than mining it. A project was announced in Germany in early June and the Strasbourg-based company Viridian Lithium plans to open the first French lithium factory for batteries there by the end of 2025. It will source ores from Latin America and aims to produce 100,000 tons of lithium hydroxide by 2030. “This would not solve the issue of dependence, but it would create know-how and jobs,” said Vidal.

From an ecological perspective, this would also have a major advantage. At present, lithium is almost systematically transited through China to be refined. The EU now plans to open three “gigafactories” for battery production.

Focusing on battery recycling

Vidal warns that even if all these projects come to fruition, they would still not be able to compete with the salt deserts of South America or with Australian production. “On the other hand, where the European Union could really make its mark in the coming years is in battery recycling,” he noted.

“Currently, the quantities of metals to be recycled are still limited since lithium batteries did not exist ten years ago. But by 2035, we will have batteries for electric vehicles at the end of their life and therefore a stock that can be recycled,” he explained. According to the University of Leuven, 40% to 75% of the EU’s metal needs could be met through recycling by 2050. This would guarantee supply security as well as reduce the environmental impact.

“For that to happen, we have to act now,” said Vidal. “We need to design products that will be easily recyclable, at lower cost, to reassure investors.”

But most important, according to Vidal, is our consumption habits. “We need to think about our uses. Lithium is certainly used in car batteries, but also in many everyday gadgets,” he explained. “One of the levers is also to learn to move towards more material sobriety.”

Source: France24

Lithium demand is growing like gangbusters, but that isn’t enough for everyone on Wall Street to recommend lithium stocks.

That is because it can be hard to reconcile fast growth and rocketing commodity prices with shareholder value.

J.P. Morgan analyst Jeffrey Zekauskas launched coverage on Monday of lithium producer Livent (ticker: LTHM) with a Hold rating and $28 price target. Zekauskas also covers the world’s largest lithium miner, Albemarle (ALB). He has rated those shares Hold since May 2021. His Albemarle  price target is $270 a share.

“ Livent has a strong earnings trajectory,” Zekauskas wrote in his launch report. He forecasts Livent ’s per-share earnings will grow from 18 cents in 2021 to $1.50 in 2022 and $2.30 in 2023.

That is incredible growth in just two years. Most of those gains come from rises in lithium pricing instead of from capacity expansion. Benchmark lithium prices are up about 200% over the past 12 months and up roughly 12-fold compared with late 2020.

Electric vehicles are the reason for the increases—demand of lithium-ion batteries that power EVs has nearly tripled since 2020. Demand is expected to double again between 2022 and 2024.

Supply is scrambling to catch up will all that demand. Livent, for its part, is working to increase its capacity by about 170% between 2022 and the end of 2025.

The supply and demand change make calling long-term lithium prices difficult. Ultimately, commodities tend to move toward the marginal cost of production. Where on the globe that marginal—higher cost—lithium comes from, what the cost of production looks like, and when things normalize, however, is anyone’s guess.

Where things settle out has big implications for lithium-linked stocks. At a benchmark lithium price of $40,000 per metric ton, J.P. Morgan projects Livent and Albemarle stocks’ free cash flow yield in 2023 would come in at about 0.3%, or near break-even, and 5.2%, respectively. At prices of $70,000 a metric ton, however, yields would be dramatically higher, at almost 9% and 16%, respectively.

Benchmark prices are roughly $75,000 a metric ton today.

That wide range of free cash flow yields, depending on what prices do, is a reason Zekauskas is on the sidelines and says Livent stock is an above average risk.

The rest of Wall Street is a little more bullish. While only 47% of analysts covering Livent stock rate shares Buy, roughly 60% of analysts covering Albemarle stock and shares of lithium producer SQM ( SQM ), rate them Buy.

The average Buy-rating ratio for stocks in the S&P 500 is about 58%.

Livent was up 4.9% in midday trading. The S&P 500 and Dow Jones Industrial Average were up 2.2% and 1.8, respectively.

It is a green day for markets and EV stocks. Shares of EV leader Tesla (TSLA) were up 6.3%.

Source: Barron’s

On September 28, 2022, the U.S. Department of Labor published the 10th edition of its List of Goods Produced by Child Labor or Forced Labor. The Bureau of International Labor Affairs (“ILAB”) within the Department of Labor maintains a list of goods and their source countries which it has reason to believe are produced by child labor or forced labor in violation of international standards, as required under the Trafficking Victims Protection Reauthorization Act (“TVPRA”) of 2005. Under the TVPRA, ILAB must submit a list of foreign-made goods that it has reason to believe are produced by forced and/or child labor in violation of international standards to Congress every two years. The 10th edition of the List comprises 158 goods from 77 countries, adding 32 goods, including two new ones: dairy products and açaí berries.

According to the Department of Labor, “ILAB drew on a broad body of evidence to trace, for the first time, goods tainted with forced or child labor as they move through complex global supply chains and which final and intermediate products contain them to produce these studies.” The September 28 report alleges that 27.6 million people are engaged in forced labor, with 57% of those being male and 43% of those being female. Of those 27.6 million, the report alleges that 3.9 million experience state imposed forced labor, 17.4 million experience non-state imposed forced labor, and 6.4 million experience forced sexual exploitation. The report claims that goods produced by forced labor in China are artificial flowers, Christmas decorations, coal, fish, footwear, garments, gloves, hair products, polysilicon, nails, thread/yarn, and tomato products, while products produced by child labor and forced labor are bricks, cotton, electronics, fireworks, textiles, and toys. The report alleges that China is “the country with the greatest number of products made with forced labor, including state-sponsored forced labor.”

The report also includes three in-depth, supply-chain studies on lithium ion batteries, palm oil, and solar panels. The introduction by the Deputy Undersecretary for International Affairs, Thea Mei Lee, states that the ILAB is “drawing attention to critical supply chains in clean energy–highlighting China’s use of forced labor in polysilicon production (a key input in solar panels),” as well as the use of child labor in the Democratic Republic of the Congo (“DRC”) for the mining of cobalt, the majority of which allegedly is then imported into China for the production of lithium batteries. According to the report, China owns or  finances most cobalt mines in the DRC, and China imports almost 90 percent of its cobalt from the DRC.

The report also focuses on the claim regarding force labor concerns in Xinjiang and the steps the U.S. Government is taking “to raise further awareness among companies that do business in or source goods from China.” These steps include joining the Office of the U.S. Trade Representative and the U.S. Departments of States, Treasury ,Commerce, and Homeland Security in issuing an updated Xinjiang Supply Chain Business Advisory in July 2021. Only two days before the publication of this report, Eric Choy, acting executive director of U.S. Customs and Border Protection’s trade remedy law enforcement directorate, told The Dispatch that, from October 1, 2021, through mid-September 2022, “Customs and Border Protection targeted more than 3,600 shipments worth nearly $800 million from around the world for potential ties to forced labor. . . .” Of those 3,600 shipments, Choy stated that “around 1,500 were targeted under the Uyghur Forced Labor Prevention Act, adding up to about $420 million.” Both the report and Choy’s comments make clear that alleged forced labor in China will remain a focus of multiple branches of the U.S. Government.

Source: Mayer Brown

“The nation’s mining sector presently accounts for 98% of exports, 18% of GDP and 11% of jobs. If the DRC captures 20% of the market share for battery manufacturing, it can add round US$54 billion to its revenue and lift its GDP tremendously,” says UN Beneath-Secretary-Basic Vera Songwe.

Africa is a resource-rich continent, dwelling to some 30% of the world’s recognized mineral reserves, together with 40% of recognized gold and as much as 90% of chromium and platinum reserves.

For hundreds of years, this mineral wealth has been extracted by international nations or corporations with little or no worth returned to the international locations they’re taken from, leaving Africa with little to realize from the worldwide mineral provide chain.

The Democratic Republic of Congo (DRC) is in search of to alter that unequal dynamic, taking the primary steps to constructing a sustainable battery worth chain inside the DRC and higher Africa with the help of the brand new Democratic Republic of Congo Battery Council.

What’s the DRC Battery Council?

The primary goal of the Democratic Republic of Congo’s DRC-Africa Enterprise Discussion board in 2021 was to foster “the event of a battery, electrical automobile and renewable power worth chain and market in Africa”.

The DRC-Africa Enterprise Discussion board – after two hours of roundtable debate – introduced collectively high-level stakeholders to type the Democratic Republic of Congo’s Battery Council with three strategic goals:

• Assist worth creation of strategic minerals in Africa and strengthen productive capabilities within the battery worth chain, to generate job creation on the continent through the battery worth chain;
• Guarantee a socially, environmentally accountable and sustainable battery worth chain, which improves the lives of girls and the youth; and
• Encourage native and African champions to spend money on the battery business.

The council intends to arrange a particular monetary automobile to facilitate non-public investments and the participation of the inhabitants, and also will:

• Leverage partnerships to draw and promote funding and innovation and expertise for the transformation of Africa’s strategic minerals;
• Speed up intra-African commerce, expertise constructing and analysis to unlock innovation alongside the battery worth chain leveraging the African Continental Free Commerce Space (AfCFTA);
• Collaborate to advertise intensive partnerships and far-reaching exchanges of modern concepts to make sure that the battery worth chain is sustainable and accrues worth to the native economic system;
• Catalyse, fast-track and scale up motion in direction of the imaginative and prescient; and
• Facilitate the era of evidence-based research, knowledge, data on the battery worth chain within the DRC and Africa.

The council’s objectives have garnered help from the UN Financial Fee for Africa, which champions financial cooperation amongst its member states.

“The DRC is on the coronary heart of the battery worth chain, as it’s dwelling to about 70% of world’s cobalt reserves,” UN Beneath-Secretary-Basic and govt secretary of the Financial Fee for Africa Vera Songwe stated.

“The nation’s mining sector presently accounts for 98% of exports, 18% of GDP and 11% of jobs.

“If the DRC captures 20% of the market share for battery manufacturing, it can add round US$54 billion to its revenue and lift its GDP tremendously.”

The pinnacle of state of the DRC and present chair of the African Union Fee (AU), Félix-Antoine Tshisekedi Tshilombo, additionally expressed his enthusiasm for the council to start pursuing its objectives: “The machine is now launched, it’s mandatory to start out proper after this discussion board.”

Who’s concerned?

The important thing members included representatives of Zambia, Tanzania and Morocco, the UN Financial Fee for Africa, African Union Fee and Afreximbank.

Different organisations included Africa Finance Cooperation, African Improvement Financial institution Group, Bosch Africa, The Arab Financial institution for Financial Improvement in Africa, and AVZ Minerals Ltd (ASX:AVZ).

AVZ Minerals was the one aspiring mining firm to be invited to the discussion board, which managing director Nigel Ferguson sees as a logical selection.

“We’re sitting with one of many globally vital lithium and tin sources and the present geopolitical local weather is gaining higher give attention to inexperienced expertise,” Ferguson stated.

“The Australian Ambassador visited only recently and she or he stated the DRC President, Felix Tshisekedi, was very eager on having extra Australian corporations come and do enterprise in nation as a result of we have an excellent fame for our technical experience, our transparency and our professionalism.

“We additionally recognise the significance of getting a local people that is realising profit from a nationwide asset.”

AVZ Minerals has constructed its model on a close to ‘zero emissions’ operation, with an impartial greenhouse fuel evaluation confirming the Manono Lithium and Tin Mission might have one of many lowest carbon footprints of any exhausting rock lithium mine on the planet.

“The DRC and Africa are strategically positioned to play a pivotal position within the international transition to wash power and decarbonisation and the Manono challenge will tremendously help to enhance the fortunes of the Congolese folks, which AVZ Minerals could be very supportive (of),” Ferguson commented.

Challenges to be overcome

There are lots of structural challenges to be overcome earlier than the DRC Battery Council can meet its objectives, not least of which is power and transport infrastructure.

The DRC presently operates underneath a big electrical energy deficit, the place as soon as it equipped extra power to its neighbours.

Secretary-Basic of EGC (Basic Cobalt Firm) and power skilled Vincent-Noël Vika Raissa Kikunda stated that overcoming this primary hurdle was paramount, and “the nation should make investments a billion {dollars} every year to hope to unravel its electrical energy drawback”.

Secretary-Basic Vika highlights that with out entry to financing and sovereign ensures, long-term power buy contracts might fill the hole.

DRC will even possible want a extra sturdy rail community, doubtlessly a big industrial port and higher integration of the native inhabitants into the electrical battery business.

The non-public sector shall be integral to the upskilling of DRC residents, a task AVZ Minerals is already engaged in.

The mining firm has plans to construct and fit-out a college at Manono, the native city adjoining to AVZ’s mining challenge, and likewise intends to attract on a big pool of intensive mining expertise within the type of domestically recruited on-the-job traineeships.

“Giving locals a chance to have a ability or a commerce and uplift themselves is one thing that is very near us,” Ferguson defined.

“The DRC is properly endowed with not solely pure mineral sources but additionally of their folks. There’s an extended historical past of mining within the nation and many individuals are very technically succesful.

“I am completely snug with the truth that there’s sufficient technical capability right here to have the ability to fulfil these roles.”  

Ferguson additionally highlighted a necessity for political stability and regulatory flexibility throughout higher Africa, usually cited as one of many main causes the continent might be dangerous to spend money on.

David McLachlan-Karr, the Resident and Humanitarian Coordinator of the UN in DRC, commented that the Congo has the capability to alter the distribution of advantages from the inexperienced mineral worth chains.

“Traders imagine on this challenge and are concerned. The work shall be very advanced, requiring a centered strategy,” McLachlan-Karr stated.

“Investing on this sector in DRC gained’t simply yield monetary returns, however shall be important for the worldwide reaching of the Paris settlement, and bettering lives in DRC.”

Source: Bojuri

The U.S. aims to cut its greenhouse gas emissions in half by 2030 as part of its commitment to tackling climate change, but might be lacking the critical minerals needed to achieve its goals.

The American green economy will rely on renewable sources of energy like wind and solar, along with the electrification of transportation. However, local production of the raw materials necessary to produce these technologies, including solar panels, wind turbines, and electric vehicles, is lacking. Understandably, this has raised concerns in Washington.

In this graphic, based on data from the U.S. Geological Survey, we list all of the minerals that the government has deemed critical to both the economic and national security of the United States.

What are Critical Minerals?

A critical mineral is defined as a non-fuel material considered vital for the economic well-being of the world’s major and emerging economies, whose supply may be at risk. This can be due to geological scarcity, geopolitical issues, trade policy, or other factors.

In 2018, the U.S. Department of the Interior released a list of 35 critical minerals. The new list, released in February 2022, contains 15 more commodities.

Much of the increase in the new list is the result of splitting the rare earth elements and platinum group elements into individual entries rather than including them as “mineral groups.” In addition, the 2022 list of critical minerals adds nickel and zinc to the list while removing helium, potash, rhenium, and strontium.

The challenge for the U.S. is that the local production of these raw materials is extremely limited.

For instance, in 2021 there was only one operating nickel mine in the country, the Eagle mine in Michigan. The facility ships its concentrates abroad for refining and is scheduled to close in 2025. Likewise, the country only hosted one lithium mine, the Silver Peak Mine in Nevada.

At the same time, most of the country’s supply of critical minerals depends on countries that have historically competed with America.

China’s Dominance in Minerals

Perhaps unsurprisingly, China is the single largest supply source of mineral commodities for the United States.

Cesium, a critical metal used in a wide range of manufacturing, is one example. There are only three pegmatite mines in the world that can produce cesium, and all were controlled by Chinese companies in 2021.

Furthermore, China refines nearly 90% of the world’s rare earths. Despite the name, these elements are abundant on the Earth’s crust and make up the majority of listed critical minerals. They are essential for a variety of products like EVs, advanced ceramics, computers, smartphones, wind turbines, monitors, and fiber optics.

After China, the next largest source of mineral commodities to the United States has been Canada, which provided the United States with 16 different elements in 2021.

The Rising Demand for Critical Minerals

As the world’s clean energy transitions gather pace, demand for critical minerals is expected to grow quickly.

According to the International Energy Association, the rise of low-carbon power generation is projected to triple mineral demand from this sector by 2040.

The shift to a sustainable economy is important, and consequently, securing the critical minerals necessary for it is just as vital.