Lithium Market Value to Grow as Governments Encourage EV Technology
FinancialBuzz.com News Commentary
NEW YORK, August 9, 2018 /PRNewswire/ --
According to the data compiled by Mordor Intelligence, the global lithium market is expected to grow at a CAGR of 9.33% during the forecast period from 2018 to 2023. The Asia-Pacific region is expected to lead the market, due to its rapid production of electric vehicles (EV) and consumer electronics, while simultaneously driving the battery segment of the market. The battery segment of the lithium market is growing at the fastest rate due to its adoption among technology and automotive companies. Lithium batteries are widely used due to their high energy density, the ability to recharge and their environmental efficiency. Currently, consumer electronics control a majority of the market capital, but as the electric vehicle popularity rises, EVs are projected to drive the market substantially. MGX Minerals Inc. (OTC: MGXMF), Panasonic Corporation (OTC: PCRFY), Rio Tinto plc (NYSE: RIO), BHP Billiton Limited (NYSE: BHP), Johnson Controls International plc (NYSE: JCI).
EVs are growing at a rapid rate due to their environmental efficiency when compared to the standard carbon emission releasing vehicles. National governments have begun to implement regulations, which have prompted auto manufacturers to begin a transition. Many automotive companies have already pledged to shift their production line to predominately EVs to combat the growing environmental concerns. "The past year has been marked by a flurry of announcements from major automakers about their plans for the EV market. Should these plans fructify, it represents a mouthwatering potential of 400 models and estimated global sales of 25 million by 2025," said Sarwant Singh, Senior Partner and Head of Automotive Transportation practice as Frost & Sullivan in a report by Forbes. "Adopting a common standard for EV charging, leveraging incentives and subsidies and deepening collaboration between car manufacturers and suppliers to promote technology development and economies of scale will provide a platform on which the global EV market can build its future."
MGX Minerals Inc. (OTCQB: MGXMF) is also listed on the Canadian Securities Exchange under the ticker (CSE: XMG). Yesterday, the Company announced breaking news that, "it has entered into an Memorandum of Understanding (the "MOU") to acquire 50% of the issued shares of Chilean Lithium Salars SpA ("CLS"). CLS is a wholly owned subsidiary of Chilean Lithium Salars Pty Ltd. ("CLSH") and holds a 100% interest in three prospective lithium exploration Projects (the "Projects") located in Chile, including Francisco Basin, Laguna Brava and Laguna Escondida Lithium Projects totaling 12,900 hectares.
Francisco Basin Lithium Project: The Francisco Basin lithium project ("Francisco Basin") is located 30km south of Maricunga salar, 100 km southeast of the regional center of Copiapo and accessible via a regional highway and established tracks. The lease area comprises 11,000 hectares with drilling expected to commence shortly. Historical exploration work on the project was previously limited to hydrology studies. In January 2018, CLSH completed a reconnaissance brine sampling at the project. This sampling confirmed the presence of lithium enrichment in the surface brines. The samples were assayed at the University of Antofagasta ("Antofagasta"), Antofagasta, Chile which has one of the two leading laboratories in the world for this type of brine analysis. In May 2018, sampling continued and a 2.5L sample was taken near the southern shore of the surface Northern lagoon and sent to Servicios Quimicos Ltda. ("SERQUIM"), Antofagasta, Chile for content analysis.
A geophysical program comprising an electromagnetic survey was completed in April 2018. The survey was based on a grid of sections which indicated the presence of high conductivity brines in two zones with significant thickness and horizontal coverage. The presence of anomalous lithium levels in the water body area located in the Northern lagoon, which is potentially underlain by a fault bound, saturated basin of undetermined thickness and the presence of widespread felsic to intermediate volcanic rocks as a lithium source.
The Francisco Basin salar is within a large, fault-bound, alluvium-filled basin to the immediate south of the Copiapo Volcano. The basin is closed, drains a large area and the salar appears to be the lowest point within the drainage.
The rocks in the drainage surrounding this salar are dominantly volcanic, ranging in age from Eocene to Miocene, juxtaposed with some older rocks. To the west is a Cretaceous sedimentary sequence separated from the volcanic rocks of the Francisco Basin area by the Cerro Guerrita Fault. To the east, an older Oligocene to Miocene volcanic sequence is overlain by the Copiapo volcanic rocks.
The Francisco Basin alluvial basin sits at the junction of three catchments. These river systems presumably provide the fill for the basin and are in part, along with the limits of the salar, structurally controlled. The alluvial fill may be covering post-Copiapo aged faulting.
Laguna Brava Project: The Laguna Brava salar ("Laguna") is geologically prospective for lithium brine. The catchment is large and dominated by volcanic rocks, many of which have been altered by hydrothermal fluids associated with volcanism. The lake is also fed by active hot springs. Historical sampling of surface brines indicated significant lithium enrichment. In December 2017, CLSH undertook a four-hole reconnaissance drilling program at a southern access point of the salar to investigate the deeper aquifer. Prior to the CLSH reconnaissance drilling program in December 2017, no previous work had been undertaken to assess the volume and grade of the subsurface resource. Previous work recommended that the subsurface brines be investigated on the basis of his conclusion that Laguna Brava is geothermally fed. The presence of hot springs being present either at the margins or beneath salars is common within the Chilean Altiplano, other notable locations include the Salar de Coposa in Region I and Salar de Atacama in Region II. The principal origin of lithium in the Salar de Atacama is interpreted to be the lithium-bearing geothermal waters from the El Tatio Geyser Field, located north of the salar. The geothermal fluids enter the northern part of the Salar de Atacama via surface and subsurface flow. It has also been reported that the chemistry of the salar brines is almost identical to the chemistry of the geothermal fluids of El Tatio.
Furthermore, work by Risacher et al., (2003) has shown that subsurface brines contained within the volcanic geology are of a much higher concentration, typically 250,000-350,000 mg/L TDS. Given this hypothesis, CLSH commissioned a reconnaissance drilling program in December 2017 comprising four bores; the locations are shown in Figure 6-4. Two bores reached the design depth of 120 m, and the other two bores were abandoned due to collar collapse because of high water flows. The results from this program confirmed the presence of lithium at depth."
Panasonic Corporation (OTC: PCRFY) is a worldwide leader in the development of diverse electronics technologies and solutions for customers in the consumer electronics, housing, automotive, and B2B businesses. Earlier this year, the Company announced that it has begun mass production of prismatic-type automotive lithium-ion batteries at its factory in Dalian, China, and held a ceremony to mark the first shipment. The market for eco-conscious vehicles, including hybrids, plug-in hybrids, and electric vehicles, is growing every year thanks to the increase in environmental awareness in recent years. To respond to the market demand, Panasonic has been gearing up to start production at this factory, which is its first production site for prismatic-type automotive lithium-ion batteries in China. Amidst expectations of expanding demand for automotive lithium-ion batteries, Panasonic manufactures the high-capacity and high-safety prismatic-type batteries at this factory and ships them to the North American and Chinese markets. Shipments will be expanded in the future to reach more destinations, helping to drive the spread of eco-conscious vehicles. With the beginning of mass production shipments of automotive lithium-ion batteries from this factory, Panasonic now has a production system covering Japan, the United States, and China, the three key global locations.
Rio Tinto plc (NYSE: RIO) has developed some of the world's largest and best quality mines and operations, and its people work in around 35 countries across six continents. Rio Tinto led the industry in partnerships, with customers in new markets, and with local communities. The Company has also pioneered technological innovations, such as its Mine of the Future™ programme and its low-CO2 aluminum from hydropower. Other segments of Rio include: Energy Resources of Australia Ltd for uranium, and Jadar for lithium sodium borosilicate mineral mining. Rio Tinto recently approved a USD 146 Million round of funding to undertake initial work at the Koodaideri iron ore project in Western Australia, ahead of a final investment decision expected by the end of the year. The funds will be invested in detailed engineering work on key elements of the project, the development of a rail construction camp and the first stage of the Koodaideri accommodation camp. If approved, construction is scheduled to begin in 2019 with first production expected in 2021. The mine would create over 2,000 jobs during construction and 600 permanent operational roles. Rio Tinto Iron Ore Chief Executive Chris Salisbury said "This is an important step for our Koodaideri project which will be a significant leap forward for the global mining industry and Rio Tinto. We've been building mines in the Pilbara for over 50 years, and, subject to final approvals, Koodaideri will incorporate all of that knowledge to enable us to build the smartest, safest and most efficient mine we've ever constructed. The deployment of leading-edge technology will deliver a step-change in both safety and productivity for our business."
BHP Billiton Limited (NYSE: BHP) is a world-leading resources company. Recently, BHP's light electric vehicles made their debut. The Company's Olympic Dam site in South Australia is one of the largest underground copper mines in the world and its investment there in light electric vehicles, powered by lithium-ion batteries, is good news for its people and the planet. In support of the Company's environmental targets, Technology is working hand-in-hand with Assets to implement game-changing programs that firmly position BHP as an industry leader in low emissions technology. After extensive planning, one such exciting initiative kicked off at Olympic Dam earlier this month. BHP's first ever light electric vehicle (or LEV) is joining the existing underground fleet of 240 light vehicles with a second expected to join the fold in the coming months. This is all part of a broader initiative aimed at achieving a 50% reduction, right across BHP, in the number of employees with potential exposure to particulate matter. Olympic Dam's switch to LEVs in its operations will reduce emissions, exposure and costs - as well as influencing the rollout of similar initiatives in the Company's other locations.
Johnson Controls International plc (NYSE: JCI) is a global diversified technology and multi-industrial leader serving a wide range of customers in more than 150 countries. Johnson Controls recently reported fiscal third quarter 2018 GAAP earnings per share ("EPS") from continuing operations, including special items, of USD 0.78. Excluding these items, adjusted EPS from continuing operations was USD 0.81, up 14% versus the prior year period sales of USD 8.1 Billion increased 6% compared to the prior year. Excluding the impacts of M&A, foreign currency and lead prices, total sales also grew 6% organically. Power Solution sales in the quarter were USD 1.8 Billion, an increase of 14% versus the prior-year quarter. The segment includes lead-acid products, lithium-ion batteries and recycling. Excluding the impact of higher lead pass-through and foreign currency, organic sales increased 10% driven by higher unit volumes, as well as favorable price and technology mix. Global original equipment battery shipments increased 6%, outpacing overall market demand, benefitting from several recent business wins. Aftermarket shipments also grew 6% driven by strong growth in EMEA and China. Start-stop battery shipments increased 30% year-over-year, led by strong growth in China, EMEA and the Americas.
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