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  • Steven Roy

Follow The Lithium, Part 2

Lithium Reserves and Production

Over 80% of earth’s proven lithium reserves are located in four countries

Country Reserves (Tons) % of Global Reserves

Chile 9,200,000 43.7%

Australia 4,700,000 22.3%

Argentina 1,900,000 9.0%

China 1,500,000 7.1%

The United States, with 750,000 tons of Lithium reserves (3.6% of Total reserves) ranks fifth.

Despite ranking fifth in reserves, the U.S. plays a negligible direct role in worldwide Lithium production-extraction. The same four countries that dominate reserves also dominate production – extracting over 95% of global production:

Country 2020 Production (Tons) % of Global Production

Australia 40,000 48.7%

Chile 18,000 21.9%

China 14,000 17.0%

Argentina 6,200 7.5%

A U.S. company, Albemarle, is the highest capitalized Lithium producer. Albemarle’s assets are located in Chili at Salar de Atacama, which Albemarle operates in partnership with the second most highly capitalized, Sociedad Química y Minera de Chile. Salar de Atacama houses one fourth (1/4) of the world’s current proven reserves of lithium and has been in operation since the 1980s.

Albemarle also has assets in Nevada, U.S., and Australia. Its Clayton Valley operation is the only source of lithium production in the United States.

A Chinese company Tianqi Lithium is directly or indirectly in control of 46% of the world lithium market (based on production). Tianqi Lithium partners with Albemarle in the Greenbushes Australian mine. Tianqi is the majority partner with fifty one percent, 51%, of the venture. Albemarle owns forty nine percent, 49%. Chinese private citizens Wei Ping Jiang (28.2) and Jing Zhang (4.65%), in turn, own the largest interests in Tianqi.

A January 2022 USGS report identifies only one commercial scale Li extraction operation in the U.S. That operation, the Silver Peak Mine near Tonapah NV, is owned and operated by U.S. company, Albemarle, and employs salt extraction methods commonly used in South America (more information on extraction techniques, below).

Lithium Americas owns and operates a pre-productive Li extraction facility start-up near Thacker Pass (near the Nevada Border). This facility would employ open pit mining techniques similar to those used in Australian operations. The proposed mine would cover 9 square miles of public land, operate on one of the largest lithium deposits in the U.S., and sit within an extinct super-volcano, the McDermitt Caldera. For seemingly obvious reasons, the facility faces strong opposition that has, at times, included a camp-in site occupation by environmental activists and Native American heritage groups. Lithium Americas is a multinational venture headquartered in Vancouver B.C. Lithium Americas’ majority stakeholder is China’s Ganfeng Lithium.

Piedmont Lithium faces similar opposition to its proposed re-opening of lithium properties located on 1,500 acres in Gaston County North Carolina and construction of a 30,000 ton/year Lithium Hydroxide refining facility in McMinn County Tennessee. The projects are slated to begin commercial operations in 2025-2026. The North Carolina facility will employ open pit mining techniques. Like Lithium Americas’ Thacker Pass operation, Piedmont Lithium’s mining facility faces intense environmental activist and Native American heritage group opposition.

The refining Project’s location in Tennessee was “selected for its cooperative government relations, access to excellent infrastructure including rail, road and river transportation, a talented workforce, a constructive business climate, as well as its proximity to the battery and automotive plants being constructed by prospective customers, and the Company’s headquarters and Carolina Lithium project, both in Gaston County, North Carolina.” Piedmont is owned by a relatively broad spectrum of investment firms that includes Blackrock (6.01%), Vanguard (5.01%), Van Eck (4.00%) and Morgan Stanley (1.89%).

Two other Lithium production projects may face lower environmental and social bars. The two projects would not require a substantial expansion of already existing extraction operations. They do, however, face daunting technical challenges.

A coalition of Energysource, Berkshire Hathaway Renewables, and Controlled Thermal Resources[1] will modify, expand, or build geothermal heat facilities near California’s Salton Sea and apply Direct Lithium Recovery-Extraction (DLE or DLR) techniques directly to the geothermal brine. The processes would produce what is arguably the world’s greenest Lithium.

In Alabama, Standard Lithium plans to extract lithium from waste brine produced by a bromine facility run by the chemical company Lanxess. Standard Lithium’s proposed facility would produce up to 6,000 tons per year of battery-grade lithium carbonate using DLE technology.

Both projects and the underlying techniques they employ must be considered speculative at this time.

U.S. Lithium extraction advocates cannot point to potential job creation in mitigation of environmental concerns when their facilities are approved. Instead, they are forced to cite:

  • Creation of few, but highly compensated direct jobs

  • Job creation leverage provided by successive Lithium processing steps (fabrication, and vehicle assembly),[2] and

  • Relief from U.S. dependence on imported Lithium ore and processed ore.[3]

[1] With supporting investment from General Motors, who will also be the venture’s primary customer. [2] Tennessee, in particular, is a major U.S. automobile manufacturing and assembly hub. [3] U.S. Imports are sourced to Argentina (54%), Chile (37%), China (5%), and Russia (3%) as of January 2022. That pattern persists in spite of China’s 58% share of global refining-processing volumes.

These blogs are an outgrowth of Cambyses Financial Advisor’s Electric and Autonomous Vehicle Initiative. Articles are not an endorsement of any product or producer we mention in the article. They are not an offer to buy or sell any security. Investments in EAV sector companies are very risky and highly speculative. Consult your financial advisor for more information about the companies we mention.

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