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Atlantic Lithium
Overview
Atlantic Lithium Limited (AIM: ALL, ASX: A11,GSE: ALLGH, OTCQX:ALLIF) is an African-focused lithium exploration and development company advancing its flagship Ewoyaa Lithium project through to production as Ghana’s first lithium mine. Despite its long mining history, favourable regulatory climate and stable political backdrop, Ghana remains largely overlooked as an investment jurisdiction for battery metals. Situated on the West African coast, the country boasts a strong strategic location, between Europe, the Americas and Asia, to serve the global battery metals market. Ghana is also home to an abundance of mineral wealth, with c. 180,000 tonnes of estimated lithium resources.
Atlantic Lithium intends to produce spodumene concentrate capable of conversion to lithium hydroxide and carbonate for use in electric vehicle batteries, helping drive the transition to decarbonisation.
A definitive feasibility study (DFS) released in June 2023 shows Ewoyaa has demonstrable economic viability, low capital intensity and excellent profitability. After drilling at the new Dog-Leg target, with high-grade assay results, the JORC mineral resource estimate at Ewoyaa now stands at 36.8 million tons (Mt) at 1.24 percent lithium oxide, 81 of which is now in the higher confidence measured and indicated categories (3.7 Mt at 1.37 percent in the measured category, 26.1 Mt at 1.24 percent in the indicated category, and 7 Mt @ 1.15 percent in the Inferred category).
Through simple open-pit mining, three-stage crushing and conventional Dense Media Separation (DMS) processing, the DFS (also considering the fiscal terms agreed upon the grant of the Mining Lease for the project in October 2023) outlines the production of 3.6 Mt of spodumene concentrate over a 12-year mine life, delivering US$6.6 billion life-of-mine revenues, a post-tax NPV8 of US$1.3 billion and an internal rate of return of 94 percent.
The project is expected to deliver nameplate production from its plant as early as 2026.
As of October 2024, Atlantic Lithium has secured all the regulatory approvals to take the company closer to mine construction at the Ewoyaa project, including a granted mining lease, the Environmental Protection Agency permit, introduction and commencement of trading on the Main Market of the Ghana Stock Exchange, and finally, the receipt of the mine operating permit.
The mining lease for the Ewoyaa project has been submitted to the Ghana parliament to undergo a ratification process.
Project Funding
The development of the project is co-funded under an agreement with NASDAQ and ASX-listed Piedmont Lithium (ASX:PLL), with Piedmont expected to fund c. 70 percent of the US$185 million total development expenditure indicated by the DFS.
In accordance with the agreement, Piedmont has completed funding of US$25 million towards studies and exploration, and will sole fund an initial US$70 million, plus 50 percent of costs thereafter (shared 50:50 between Atlantic Lithium and Piedmont), towards the total development expenditure for the project, as indicated by the DFS.
In return, Piedmont will receive 50 percent of the spodumene concentrate produced at Ewoyaa, providing a route to consumers through several major battery manufacturers, including Tesla.
The Minerals Income Investment Fund (MIIF), Ghana’s minerals sovereign wealth fund, has also agreed to invest a total of US$32.9 million in the company and at the project-level to expedite the development of the project.
Representing the first part of the Strategic Investment, MIIF completed a Subscription for US$5 million Atlantic Lithium shares in January 2024, to become a major strategic shareholder in the company.
Representing the second part of the Strategic Investment, MIIF has agreed to invest, subject to the company reaching a binding agreement with MIIF, US$27.9 million in the company's Ghanaian subsidiaries to acquire a 6 percent contributing interest in the project. The US$27.9 million project-level investment and the contributing interest are expected to take the form of funding for development, exploration and studies expenditure to support the advancement of the project.
In addition, Atlantic Lithium is in the final stages of a competitive offtake partnering process to secure funding for a portion of the remaining 50 percent available feedstock from Ewoyaa.
The objective of the process is to attract funding offers to sufficiently cover the Company's allocation of development expenditure for the Project, to expedite and de-risk the development of the Project, realise attractive terms for any offtake contracted and secure a well-credentialled partner that will support the company's and Ghana's objectives of supplying lithium into the global electric vehicle market.
The company has indicated its preferred terms of up to 500,000 tons of spodumene concentrate to be contracted over a 3- to 5-year period, using a favourable market-based pricing mechanism, for a consideration of up to US$100 million in the form of a pre-payment arrangement, which is expected to sufficiently cover the company’s allocation of development expenditure.
Ghana
Ghana is a well-established mining region with access to reliable, existing infrastructure and a significant mining workforce. There are currently 16 operating mines in the country.
Already the largest taxpayer and employer in Ghana’s Central Region, Atlantic Lithium is expected to provide direct employment to over 800 personnel at Ewoyaa and, through its community development fund, whereby 1 percent of profits will be allocated to local initiatives, will deliver long-lasting benefits to the region and Ghana.
Through its proven lithium discovery, exploration and evaluation methodologies, Atlantic Lithium has the potential to capitalise on its extensive exploration portfolio and deliver upon its objectives of becoming a leading producer of lithium in West Africa.
Company Highlights
- A lithium exploration and development company operating in West Africa, Atlantic Lithium is set to deliver its flagship Ewoyaa lithium project as Ghana’s first lithium-producing mine.
- The June 2023 definitive feasibility study for the project indicates the production of 3.6 Mt of spodumene concentrate over a 12-year mine life (steady state production of 365,000 tonnes per annum), making it one of the largest mines by production capacity globally.
- The Ewoyaa project has an updated mineral resource estimate of 36.8 Mt at 1.24 percent lithium oxide.
- The DFS confirms Ewoyaa as one of the lowest capital and operating cost hard rock lithium projects globally, with strong commercial viability and exceptional profitability potential.
- The Ewoyaa lithium project was awarded a mining lease in October 2023, an EPA permit in September 2024, and a mine operating permit in October 2024. The project is co-funded under an agreement with Piedmont Lithium. The Ghana Environmental Protection Agency granted the EPA permit
- Atlantic Lithium holds a portfolio of lithium projects within 509 sq km and 774 sq km of granted and under-application tenure across Ghana and Côte d'Ivoire respectively.
Key Assets
Ewoyaa
Atlantic Lithium's flagship Ewoyaa lithium project is situated within 110 kilometres of Takoradi Port and 100 kilometres of Accra, with access to excellent infrastructure and a skilled local workforce.
Atlantic Lithium has been granted a mining lease, an EPA permit and a mine operating permit in respect of the project in October 2023, September 2024 and October 2024, respectively. The company is currently advancing the project towards production.
Highlights:
- Promising DFS Results: Atlantic Lithium's DFS reaffirmed Ewoyaa as an industry-leading asset with low capital intensity and excellent profitability. Highlights include:
- Estimated 12-year life of mine, producing 3.6 Mt spodumene concentrate.
- 365 ktpa steady state production
- Average LOM EBITDA of US$316 million per annum
- NPV of US$1.3 billion
- Life-of-mine revenues of US$6.6 billion
- Modest $185 million development expenditure
- Robust US$675/t All in sustaining cost and US$377 C1 cash cost.
- Favourable Location: The project's starter pits are positioned within one kilometre of its processing plant. Additionally, Ewoyaa has access to reliable existing infrastructure, located within 800 metres from the N1 highway and adjacent to grid power.
- Promising Reserves: Ewoyaa's current mineral resource estimate (as of July 2024) at is 36.8 Mt at 1.24 percent lithium oxide, of which 81 percent is now in the higher confidence measured and indicated categories (3.7 Mt at 1.37 percent lithium oxide in the measured category, and 26.1 Mt at 1.24 percent lithium oxide in the indicated category, and 7 Mt @ 1.15 percent lithium in the inferred category).
- Potential for Further Exploration: There remains significant exploration potential, with only 1 percent of Atlantic Lithium's total tenure having been drilled to date.
- Strong Partnerships: Atlantic Lithium has a 50-percent offtake deal with Piedmont Lithium, which itself has offtake agreements with both Tesla and LG Chem, and has an agreed with Ghana’s Minerals Income Investment Fund to expedite the development of the Project.
- Positive Presence: Atlantic Lithium will generate significant economic benefits for the region. Once operational, the project is expected to employ over 800 personnel and deliver approximately US$4.9 billion in value to Ghana, including through taxes, royalties, employment and local procurement.
Côte d'Ivoire
Atlantic Lithium currently has two applications pending for an area of roughly 774 square kilometres in the West African country of Côte d'Ivoire. The underexplored yet highly prospective region is known to be underlain by prolific birimian greenstone belts, characterised by fractionated granitic intrusive centres with lithium and colombite-tantalum occurrences and outcropping pegmatites. The area is also incredibly well-served, with extensive road infrastructure, well-established cellular network and high-voltage transmission line within 100 kilometres of the country's economic capital, Abidjan.
Management Team
Neil Herbert - Executive Chairman
Neil Herbert is a fellow of the Association of Chartered Certified Accountants and has over 30 years of experience in finance. He has been involved in growing mining and oil and gas companies, both as an executive and as an investor, for over 25 years.
Until May 2013, he was co-chairman and managing director of AIM-quoted Polo Resources, a natural resources investment company. Prior to this, Herbert was a director of resource investment company Galahad Gold, after which he became finance director of its most successful investment, the start-up uranium company UraMin, from 2005 to 2007. During this period, he worked to float the company on AIM and the Toronto Stock Exchange in 2006, raise US$400 million in equity financing and negotiate the sale of the group for US$2.5 billion.
Herbert has held board positions at a number of resource companies where he has been involved in managing numerous acquisitions, disposals, stock market listings and fundraisings. He holds a joint honours degree in economics and economic history from the University of Leicester.
Keith Muller - Chief Executive Officer
Keith Muller is a mining engineer with over 20 years of operational and leadership experience across domestic and international mining, including in the lithium sector. He has a strong operational background in hard rock lithium mining and processing, particularly in DMS spodumene processing.
Before joining Atlantic Lithium, he held roles as both a business leader and general manager at Allkem, where he worked on the Mt Cattlin lithium mine in Western Australia and, prior to that, Muller served as operations manager and senior mining engineer at Simec.
Muller holds a Master of Mining Engineering from the University of New South Wales and a Bachelor of Engineering from the University of Pretoria. He is also a member of the Australian Institute of Mining and Metallurgy, the Board of Professional Engineers of Queensland, and the Engineering Council of South Africa.
Amanda Harsas - Finance Director and Company Secretary
Amanda Harsas is a senior finance executive with a demonstrable track record and over 25 years’ experience in strategic finance, business transformation, commercial finance, customer and supplier negotiations and capital management. Prior to joining Atlantic Lithium, she worked in several sectors, including healthcare, insurance, retail and professional services, across Asia, Europe and the U.S. Harsas holds a Bachelor of Business from the University of Technology, Sydney and is a member of Chartered Accountants Australia and New Zealand and the Australian Institute of Company Directors.
Kieran Daly - Non-executive Director
Kieran Daly is the executive of Growth and Strategic Development at Assore. He holds a BSc Mining Engineering from Camborne School of Mines (1991) and an MBA from Wits Business School (2001) and worked in investment banking/equity research for more than 10 years at UBS, Macquarie and Investec, prior to joining Assore in 2018.
Daly spent the first 15 years of his mining career at Anglo American’s coal division (Anglo Coal) in a number of international roles including operations, sales and marketing, strategy and business development. Among his key roles were leading and developing Anglo Coal's marketing efforts in Asia and to steel industry customers globally. He was also the Global Head of Strategy for Anglo Coal immediately prior to leaving Anglo in 2007.
Christelle Van Der Merwe - Non-executive Director
Christelle Van Der Merwe is a mining geologist responsible for the mining-related geology and resources of Assore’s subsidiary companies (comprising the pyrophyllite and chromite mines) and is also concerned with the company's iron and manganese mines. She has been the Assore group geologist since 2013 and is involved with the strategic and resource investment decisions of the company. Van Der Merwe is a member of SACNASP and the GSSA.
Edward Nana Yaw Koranteng - Non-executive Director
Edward Koranteng is a lawyer and an experienced corporate and investment banker with over 23 years of experience. He has served as the chief executive officer of the Minerals Income Investment Fund (MIIF), Ghana’s sovereign minerals wealth fund, since 2021.
Prior to joining MIIF, Koranteng held the role of Business Head for East, Central and Southern Africa for Ghana International Bank plc ("GHIB"), where he was responsible for GHIB's energy and mining portfolio. He also worked with the Chase Bank Group (Kenya), now SBM Bank of Mauritius, as group head for energy, oil, gas and mining. Koranteng currently sits on the boards of Asante Gold Corporation, MIIF and Glico General Insurance Ltd.
Koranteng holds a BA (Hons) from the University of Ghana, a Master of Laws in International Banking and Finance from the University of Leeds in the UK, a Postgraduate Diploma from BPP Law School in the UK and the Ghana School of Law. He has practiced as a barrister in both the UK and Ghana and holds various executive and postgraduate certifications, including in oil, gas and mining from the Blavatnik School of Government, University of Oxford in the UK.
Jonathan Henry - Independent Non-executive Director
Jonathan Henry is an experienced Non-Executive Director, having held various leadership and board roles for nearly two decades. Henry has significant expertise working across capital markets, business development, project financing, key stakeholder engagement, and the reporting and implementation of ESG-focused initiatives. Henry has a wealth of experience projects towards production and commercialisation to deliver shareholder value.
Henry also serves as non-executive chair of Toronto Venture Exchange-listed (TSX-V) Giyani Metals Corporation, a battery development company advancing its portfolio of manganese oxide projects in Botswana, having previously held the role of executive chair. His previous roles include as executive chair and non-executive director at Ormonde Mining plc, non-executive director at Ashanti Gold Corporation, president, director and chief executive officer at Gabriel Resources Limited and various roles, including chief executive officer and managing director, at Avocet Mining PLC. He holds a BA (Hons) in Natural Sciences from Trinity College, Dublin.
Michael Bourguignon – Head of Capital Projects
Michael Bourguignon is a distinguished project management professional with a rich history of leading significant initiatives in the mining and energy sectors. Most recently, he served as the COO at Evolution Energy Minerals in Tanzania, where he managed the optimisation and update of the Definitive Feasibility Study, managed the Front-End Engineering Design package, and oversaw the completion of the Relocation Action Plan and other community-related works.
Prior to this, Bourguignon worked with Rio Tinto in Australia as a consulting construction manager, as well as Glencore’s Mopani Copper Mines in Zambia, where he was the project director for the Mopani Synclinorium Concentrator, and Syrah’s Balama Graphite Mine in Mozambique, where he was project director. He has also previously worked in Ghana and Cote d’Ivoire with Perseus Mining.
Bourguignon holds an MBA from Murdoch University and is a member of the Australian Institute of Project Management.
Andrew Henry – General Manager, Commercial and Finance
Andrew Henry is an accomplished General Manager with over a decade’s experience in the operational mining sector, specialising in strategy, planning and analysis, contracts, large-scale project development and site operations.
Before joining Atlantic Lithium, Henry held the role of commercial manager at global lithium chemicals company Allkem and, prior to that, he spent over four years with major gold mining company Newcrest Mining.
Henry holds a Bachelor of Commerce from the University of South Australia and is a member of CPA Australia.
Ahmed-Salim Adam – General Manager, Operations
Ahmed-Salim Adam is an experienced mining general manager with over 15 years of experience leading various large-scale projects in Ghana across all stages of mine development, production, and closure, with a focus on safety and sustainability.
Adam has previously held a number of leadership roles, including as senior consultant of Metallurgy at GEOMAN Consult Ltd, as a director for FGR Bogoso Prestea Ltd’s Refractory Project and as general manager at Golden Star Resources Ltd.
He holds a MPhil Minerals Engineering and a Bachelor of Science (Hons) in Mineral Engineering, both from the University of Mines and Technology, Ghana. He is also a member of The Institute of Materials, Minerals and Mining (IOM3) in the United Kingdom and the Australasian Institute of Mining and Metallurgy (AusIMM) in Australia.
Simone Horsfall - General Manager, People
Simone Horsfall joins Atlantic Lithium as General Manager, People with over 25 years of experience working across a broad range of industries, with a focus on the mining sector. Previously, Horsfall spent over a decade at AngloGold Ashanti Australia as human resources manager and, more recently, at 29Metals as group manager of human resources.
Horsfall holds a diploma in Human Resource Management, a university certificate in Psychology from Edith Cowan University, Sydney, and a post-graduate diploma in Human Resources from Deakin University.
Belinda Gethin – General Manager, Corporate Finance and Company Secretary
Belinda assumed the role of general manager, corporate - finance and company secretary in January 2024, having initially joined the company as financial reporting manager in June 2023. To her role at Atlantic Lithium, Gethin brings a wealth of experience in all aspects of statutory, financial and corporate reporting, including the preparation of financial statements and accounting for complex transactions. Before joining Atlantic Lithium, Gethin worked as the chief financial officer for Lumus Imaging and, prior to that, as the group reporting manager at Healius. Gethin is a chartered accountant and holds a Bachelor of Commerce from UNSW in Sydney, Australia.
Iwan Williams – General Manager, Exploration
Iwan Williams is an exploration geologist with over 20 years' experience across a broad range of commodities, principally iron ore, manganese, gold, copper (porphyry and sed. hosted), PGE's, nickel and other base metals, as well as chromitite, phosphates, coal and diamond.
Williams has extensive southern and west African experience and has worked in Central and South America. His experience includes all aspects of exploration management, project generation, opportunity reviews, due diligence and mine geology. He has extensive studies experience having participated in the delivery of multiple project studies including resource, mine design criteria, baseline environmental and social studies and metallurgical test-work programmes. He is very familiar with working in Africa having spent 23 years of his 28-year geological career in Africa. Williams is a graduate of the University of Liverpool.
Abdul Razak – Exploration Manager, Ghana
Abdul Razak has extensive exploration, resource evaluation and project management experience throughout West Africa with a strong focus on data-rich environments. He has extensive gold experience having worked throughout Ghana with AngloGold Ashanti, Goldfields Ghana, Perseus and Golden Star, as well as international exploration and resource evaluation experience in Burkina Faso, Liberia, Ivory Coast, Republic of Congo, Nigeria and Guinea.
Razak is an integral member of the team, managing all site activities including drilling, laboratory, local teams, geotech and hydro, community consultations and stakeholder engagements and was instrumental in establishment of the current development team and defining Ghana’s maiden lithium resource estimate.
Where Does Tesla Get its Lithium? (Updated 2024)
In a mid-2023 Tesla earnings call, Musk seemed relieved to see prices for the battery metal had declined. “Lithium prices went absolutely insane there for a while,” he said. Lower battery prices will bring EVs closer to cost parity with internal combustion engines vehicles, leading to wider adoption and increased demand.
During the 2024 US presidential election, Musk threw his support behind Republican candidate and former president Donald Trump, who has been historically critical on electric vehicles and subsidies. Following Trump's election win on November 5, AP News reported that these stances could support Tesla as they would be more likely to harm smaller competitors who were less established than the EV giant. Tesla's share price shot upwards in response to the election outcome.
This spring, Musk invited Argentine President Javier Milei to the Tesla factory in Austin, Texas, where the two reportedly discussed the investment opportunities in Argentina's lithium sector. As a prominent member of the prolific Lithium Triangle, the South American nation is the fourth leading lithium producer by country.
Australia's hard-rock deposits and Chile's brines are also top sources for the world's lithium supply. But lithium refining is dominated by China, which accounted for 72 percent of global lithium processing capacity in 2022.
With the limelight on Musk and Tesla in 2024, investors should know where the electric car company sources its lithium.
Read on to learn more about where Tesla gets its lithium, how much lithium is in a Tesla battery and what the EV maker is doing to better secure its lithium supply chain.
In this article
Which lithium companies supply Tesla?
Tesla has deals with multiple lithium suppliers, some that are already producers and some that are juniors developing lithium projects.
At the end of 2021, Tesla inked a three-year lithium supply deal with top lithium producer Ganfeng Lithium (OTC Pink:GNENF,SZSE:002460), and the Chinese company began providing products to Tesla starting in 2022. Major miner Arcadium Lithium (NYSE:ALTM,ASX:LTM), which is set to be acquired by Rio Tinto (ASX:RIO,NYSE:RIO,LSE:RIO) also has supply contracts in place with the EV maker.
China’s Sichuan Yahua Industrial Group (SZSE:002497) agreed to supply battery-grade lithium hydroxide to Tesla through 2030. Under a new, separate agreement finalized in June 2024, Yahua is set to supply Tesla with an unspecified amount of lithium carbonate between 2025 and 2027, with the option to extend the contract by another year.
Tesla also holds deals with junior miners for production that is yet to come on stream. Liontown Resources (ASX:LTR,OTC Pink:LINRF) is set to supply Tesla with lithium spodumene concentrate from its AU$473 million Kathleen Valley project. The deal is for an initial five year period set to begin this year, and production began in July 2024.The company expects to reach nameplate capacity in calendar Q1 2025.
In January 2023, Tesla amended its agreement with Piedmont Lithium (ASX:PLL,NASDAQ:PLL), which now supplies the US automaker with spodumene concentrate from its North American Lithium operation, a joint venture with Sayona Mining (ASX:SYA,OTCQB:SYAXF). The deal is in place through the end of 2025.
Even though Tesla has secured lithium from all these companies, the EV supply chain is a bit more complex than just buying lithium directly from miners. Tesla also works with battery makers, such as Panasonic (OTC Pink:PCRFF,TSE:6752) and CATL (SZSE:300750), which themselves work with other chemical companies that secure their own lithium deals.
What are Tesla batteries made of?
Tesla vehicles use several different battery cathodes, including nickel-cobalt-aluminum (NCA) cathodes and lithium-iron-phosphate (LFP) cathodes.
Tesla is known for using NCA cathodes developed by Japanese company Panasonic. This type of cathode has higher energy density and is a low-cobalt option, but has been less adopted by the industry compared to the widely used nickel-cobalt-manganese (NCM) cathodes. Aside from that, South Korea's LG Energy Solutions (KRX:373220) supplies Tesla with batteries using nickel-cobalt-manganese-aluminum (NCMA) cathodes.
As mentioned, it wasn’t just lithium that saw prices climb in 2021 — cobalt doubled in price that same year, and although it has declined since then, the battery metal remains essential for many EV batteries. Most cobalt mining takes place in the Democratic Republic of Congo, which is often associated with child labor and human rights abuses, fueling concerns over long-term supply.
That said, not all Tesla’s batteries contain cobalt. In 2021, Tesla said that for its standard-range vehicles it would be changing to lithium-iron-phosphate (LFP) cathodes, which are cobalt- and nickel-free. At the time, the company was already making vehicles with LFP chemistry at its factory in Shanghai, which supplies markets in China, the Asia-Pacific region and Europe.
In April 2023, Tesla announced that it planned to use this type of cathode chemistry for its short-range heavy electric trucks, which it calls "semi light." The company is also looking to use LFP batteries in its mid-sized vehicles.
At the top of this year, Tesla made moves to produce LFP batteries at its Sparks, Nevada, battery facility in reaction to the Biden Administration's new regulations on battery materials sourcing, especially on those sourced from China. Reuters reports Tesla battery supplier CATL will sell idle equipment to the car maker for use at the plant, which will have an initial capacity of about 10 gigawatt hours.
What company makes Tesla’s batteries?
Tesla works with multiple battery suppliers, including Panasonic, its longtime partner, as well as LG Energy Solutions, the second largest battery supplier in the world. They supply the EV maker with cells containing nickel and cobalt.
China's CATL has been supplying LFP batteries to Tesla for cars made at its Shanghai plant since 2020. It’s also been reported that BYD Company (OTC Pink:BYDDF,SZSE:002594) is supplying Tesla with the Blade battery — a less bulky LFP battery — which the car manufacturer has used in some of its models in Europe. Additionally, BYD is set to work with Tesla on its battery energy storage systems (BESS) in China, with a plan to supply 20 percent of Tesla's anticipated BESS manufacturing capacity, with CATL expected to cover 80 percent. The factory will use the companies' LFP batteries.
How much lithium is in a Tesla battery?
How much lithium do Tesla batteries actually contain? That question is tricky because many factors are at play. Typically, it depends on battery chemistry, as demonstrated by the chart below, as well as battery size.
For example, the standard Tesla Model S contains about 138 pounds, or 62.6 kilograms, of lithium. It is powered by a NCA battery, which has a weight of 1,200 pounds or 544 kilograms.
The amount of lithium in a Tesla battery can also vary based on model and year as the battery chemistries and weights are often changing with each new iteration.
Back in 2016, Musk said batteries don't require as much lithium as they do nickel or graphite — he described lithium as "the salt in your salad." As the chart below shows, the metal only makes up about a 10th of the materials in each battery.
Metal content of battery chemistries by weight.
Chart via BloombergNEF.
But a key factor to remember is volume — given the amount of batteries Tesla needs to meet its ambitious goals, it could hit a bottleneck if it can’t secure a steady supply of raw materials. Of course, this is true not just for Tesla, but for every carmaker producing EVs today and setting targets for decades to come.
For that reason, demand for lithium-ion batteries is expected to soar in the coming years. By 2030, Benchmark Mineral Intelligence forecasts that demand will grow by 400 percent to reach 3.9 terawatt-hours. Over the same forecast period, the firm sees the current surplus in the lithium supply coming to end.
Will Tesla buy a lithium mine?
For carmakers, securing lithium supply to meet their electrification goals is becoming a challenge, which is why the question of whether they will become miners in the future continues to come up.
But mining lithium is not easy, and despite speculation, it's hard to imagine an automaker being involved in it, SQM’s (NYSE:SQM) Felipe Smith said. “You have to build a learning curve — the resources are all different, there are many challenges in terms of technology — to reach a consistent quality at a reasonable cost,” he noted. “So it's difficult to see that an original equipment manufacturer (OEM), which has a completely different focus, will really engage into these challenges of producing.”
Even so, OEMs are coming to the realization that they might need to build up EV supply chains from scratch after the capital markets' failure to step up, Benchmark Mineral Intelligence’s Simon Moores believes. Furthermore, automotive OEMs that are making EVs will in effect have to become miners.
“I don't mean actual miners, but they are going to have to start buying 25 percent of these mines if they want to guarantee supply — paper contracts won't be enough,” he said.
However, last year Musk made it clear to investors that Tesla is more focused on developing its lithium refining capabilities, rather than getting into the mining game.
Where is Tesla's lithium refinery?
Tesla broke ground on its in-house Texas lithium refinery in the greater Corpos Christi area of the state last year. Tesla's lithium refinery capacity is expected to produce 50 GWh of battery-grade lithium per year. Musk said in late 2023 that construction of the lithium refinery would be completed in 2024, followed by full production in 2025.
This is an updated version of an article first published by the Investing News Network in 2022.
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Securities Disclosure: I, Melissa Pistilli, hold no direct investment interest in any company mentioned in this article.
Editorial Disclosure: The Investing News Network does not guarantee the accuracy or thoroughness of the information reported in the interviews it conducts. The opinions expressed in these interviews do not reflect the opinions of the Investing News Network and do not constitute investment advice. All readers are encouraged to perform their own due diligence.
Laguna Verde Operational Update
CleanTech Lithium PLC (AIM: CTL, Frankfurt:T2N, OTCQX:CTLHF), an exploration and development company advancing sustainable lithium projects in Chile, provides an operational update on progress with the Laguna Verde pre-feasibility study ("PFS"), the 2024 exploration programme and Direct Lithium Extraction ("DLE") pilot plant process work to produce battery-grade lithium carbonate.
Highlights:
Laguna Verde PFS Update
- Location of preferred sites for carbonation plant in Copiapó and port facilities for export of final lithium carbonate product have been selected
- Power supply study completed evaluating options for onsite renewables which provides a competitive alternative to the base case of a transmission line and grid connection
- Option to utilise electric truck transport identified, lowers emissions and noise pollution, and by hauling from high to low altitude regenerative charging reduces power consumption
- Decision to configure project based on locating DLE plant at Laguna Verde and carbonation plant in Copiapó has numerous advantages contributing to a more robust PFS
- Engineering for this configuration has extended the expected PFS delivery to Q1 2025
Exploration Programme and Pilot Plant Updates
- Results from two completed wells and pump tests for the 2024 field programme have been received increasing knowledge of the resource and providing additional information for the hydrogeological model
- Downstream processing work from our pilot plant is progressing well with lithium carbonate production expected in November
Investor webinar
- CTL to host investor webinar on Tuesday 5th November at 17:00 GMT. Register here: https://www.investormeetcompany.com/cleantech-lithium-plc/register
Steve Kesler, Executive Chairman and Interim Chief Executive Officer, CleanTech Lithium PLC, said:
"With the recent announcement by the Chilean Government to prioritise six salt flats, including Laguna Verde, to start the process of awarding Special Operating Lithium Contracts (CEOLs), we are focused on the key aspects to advance the project, being permitting, completion of the PFS and production of battery grade lithium carbonate from our pilot plant.
Progress has continued on central elements of the PFS with evaluation of plant location, power supply and transport options. As a leader in developing DLE based projects in Chile, we aim to enter production in 2027 when the lithium market is expected to rebalance, providing a strong long term growth outlook."
Further Information
Sites Selected for Carbonation Plant and Port for Export of Final Product
As part of the ongoing PFS for the Laguna Verde project, a trade-off analysis was completed which determined the DLE plant and eluate concentration stages should be located at the Laguna Verde site, and the carbonation plant at the nearby mining centre of Copiapó. This was reported to the market on July 2, 2024. The re-configuration required a change in pre-engineering design provided by Lanshen Technology, the Company selected to provide the lithium processing plant design and equipment. This has extended the expected PFS completion, which was originally targeted for Q4 2024, into Q1 2025.
The Company has since undertaken studies to determine the ideal location of the carbonation plant in Copiapó and selected a site. After evaluating several options, a site in an industrial zone which by-passes to the south-east of Copiapó was chosen, as shown in Figure 1. This location has existing power and water supply options and provides a direct route to port.
Figure 1: Carbonation Plant Location Map
Figure 2: Carbonation Plant Design Layout
A trade-off analysis was undertaken to evaluate transport corridors and port facilities providing four different options for export of final lithium product. The study indicated that the nearby Caldera Port provides the most suitable option either utilising existing infrastructure which is currently utilised for seasonal shipment of agricultural products, shown in Figure 3. Other port options are also available and may come into consideration however Caldera Port is the current preference.
Figure 3: Caldera Port Existing Facilities
Power Supply Alternative of Onsite Renewable Generation
The Company engaged Chilean consultant Clean Power Hunters to undertake a power supply study to evaluate the option of using renewable power generated at the project site as an alternative to the base case of a transmission line and grid connection. Laguna Verde is located in the region with the highest solar irradiance in the world, as shown in Figure 4. Analysis of estimated Capex and Opex was provided based on different configurations of onsite renewables, either solar plus a battery energy storage system (BESS) or solar plus wind plus BESS. Figure 5 shows the lowest Capex corresponds to combining solar with three wind turbines plus BESS.
Figure 4: Solar Irradiance Map
Figure. 5: Solar + Wind + BESS Scenarios Capex Split
The Company has received proposals including from major global solar plus BESS suppliers, consistent with the costs estimated in the study and competitive with the grid connection option. The financing model for both the grid connection model or the alternative of onsite renewables is expected to be based on a power purchase agreement and a build own operate basis by established suppliers. These proposals will be built into the PFS and the commercial analysis of the project.
Truck Transport Study
Based on the outcome of the plant location study the Company will transport 6% Li in solution post the DLE and concentration stages at Laguna Verde to the carbonation plant. Use of standard and electric trucks is being compared with the latter providing several potential benefits in addition to cutting CO2 emissions. Electric trucks are well suited to hauling loads from high to low altitudes by taking advantage of regenerative charging to reduce power consumption and required battery capacity. Minimal noise and elimination of tailpipe emissions is particularly attractive considering the transport route traverses an indigenous community settlement approximately 100km from the project site, a community the company has been working with closely.
The Company has gathered insight from several potential suppliers. Chinese company XCMG is a leader in electric trucks and is actively expanding its offering in Chile, with its E7-49T model which has a haulage load of 49 tonnes potentially providing a suitable option. The technology is evolving rapidly and is expected to provide a strongly cost competitive option in line with the project development timeline.
Figure. 6: XCMG´s range of electric transport trucks
Figure. 7: Paved Highway to Laguna Verde
2024 Exploration Programme Update
CleanTech Lithium´s 2024 drilling programme anticipated to drill five new resource wells, as shown in Figure 8, with the aim of upgrading the existing Measured and Indicated resource into maiden Reserves for the Laguna Verde project. The existing JORC compliant resource estimate of 1.8 million tonnes of lithium carbonate equivalent (LCE) is based on six wells completed in 2022 and 2023. The Company engaged Montgomery & Associates Consultores Limitada ("Montgomery" or "M&A"), a leading hydrogeological consultant, for the programme. During 1H 2024, two of the five resource wells were completed being LV07 and LV11, along with three observation wells drilled to support observations during pumping tests, before winter conditions curtailed the programme in June 2024. The full 2024 programme is paused until further funding is available following the Company´s planned ASX fund raising and as a result Montgomery has produced an interim report on work completed.
Figure 8: Laguna Verde Drilling Wells Map - Show original figure
Drilling activities for exploration borehole LV07 reached a final depth of 650m below land surface. This well was drilled with PQ3 diameter from land surface to 300m, and with HQ3 diameter from 300m to 650m. Packer samples were obtained during drilling for 2-meter packer intervals and the volume of the well was purged at least one time before obtaining the sample. Assuming a lithium cut-off grade of 100 mg/L, the average lithium grade of the packer samples corresponds to 139 mg/L with the well encountering lower density water in the upper 150m.
In contrast to LV07, drilling at LV11 did not reach the anticipated depth due to the presence of hydrothermal waters (under pressure) which were encountered during drilling, with a final depth of 412.8m below land surface. Assuming a lithium cut-off grade of 100 mg/L, the average lithium grade of the packer results would correspond to 131 mg/L. In general, it is believed that lithium grades decrease below 220m at LV11 due to the presence of dilute hydrothermal waters which were encountered during drilling. The presence of hydrothermal waters in the eastern portion of the Project are more dilute than the average lithium grade measured in other exploration wells.
Figure 9: Drilling at LV07 in 1H 2024
Lithology and Drainable Porosity
Based on core retrieved from drilling, the most predominant lithology encountered corresponds to a volcanic tuff with variable levels of consolidation and welding based on the depth and location. As determined by relative brine release testing at Geosystems Analysis (GSA) laboratory in Tuscon, USA, drainable porosity values of collected core samples from LV07 and LV11 range from 0.3% to 9.2%, with an arithmetic average of approximately 4%; this is considered by Montgomery to be reasonable for the encountered lithologic units based on visual inspection of the core.
Figure 10: Example of Drill Core from Exploration Borehole LV11 (132 to 136m)
Hydrogeological Evaluation
In addition to resource drilling, the 2024 campaign aimed to complete pump tests to evaluate the feasibility of lithium brine extraction for the Project and to also estimate aquifer parameters. Prior to the winter break, three observation wells were completed and initial variable rate step tests and a constant rate flow test undertaken. The intended long duration pump tests at well LV05 was not able to be completed, however a 7-day pumping test was successfully completed at LV06. With data obtained to date, Montgomery is able to continue refining the hydrogeological modelling that will feed into the design of the extraction and reinjection well fields for the PFS. A key aspect is to ensure no impact on surface water bodies.
Recommendations and Next Steps
Based on the obtained results from the 2024 exploration programme, recommended priorities for continued exploration include additional drilling and testing in the western portion of the Project concessions. A long-term pump test at LV05 (as part of the planned reinjection test) will also aid in demonstrating feasible extraction and reinjection to the west of the basin. A long-term test at LV05 will also allow for a better understanding of the hydraulic connection between the deep and shallow aquifers in that area.
On the completion of the 5 well programme as originally planned for 2024, the existing JORC compliant resource estimate of 1.8 million tonnes will be updated and a Reserve estimate will be calculated for the project. The Reserve calculation is the economically mineable part of the Measured and/or Indicated resource and this will be defined by the PFS data demonstrating that extraction could reasonably be justified. Progress continues on the PFS and the remaining planned wells will be completed as funds are available following completion of the planned ASX capital raising.
Pilot Plant Update
Downstream conversion of concentrated eluate from the Company´s pilot plant into battery grade lithium commenced last week at the facilities of Conductive Energy in Chicago, USA. The initial volume of 88m3 of concentrated eluate from Laguna Verde, equal to approximately one tonne of lithium carbonate equivalent ("LCE"), will be processed in four batches with the first batch expected to produce a volume of battery-grade sample product in November. With this product, the Company plans to engage with strategic partners for product qualification.
For further information contact: | |
CleanTech Lithium PLC | |
Steve Kesler/Gordon Stein/Nick Baxter | Jersey office: +44 (0) 1534 668 321 Chile office: +562-32239222 |
Or via Celicourt | |
Celicourt Communications Felicity Winkles/Philip Dennis/Ali AlQahtani | +44 (0) 20 7770 6424 |
Beaumont Cornish Limited (Nominated Adviser) Roland Cornish/Asia Szusciak | +44 (0) 20 7628 3396 |
Fox-Davies Capital Limited (Joint Broker) Daniel Fox-Davies | +44 (0) 20 3884 8450 |
Canaccord Genuity (Joint Broker) James Asensio | +44 (0) 20 7523 4680 |
Competent Persons
The following professionals act as Competent Persons (CPs), as defined in the AIM Note for Mining, Oil and Gas Companies (June 2009) and JORC Code (2012):
Mike Rosko and Brandon Schneider of M&A are Registered Members of the Society of Mining, Metallurgy, and Exploration and have functioned as CPs for lithium brine projects under Canadian, Australian, and United States technical reporting standards. Their relevant experience includes:
· Mike Rosko has been estimated lithium brine resources since 2010, and has functioned as a CP for Lithium One's Sal de Vida project, Millennial Lithium's Pastos Grandes project, Lithium Chile's Salar de Arizaro project, NOA Lithium's Rio Grande project, Lithium America's Cauchari project, Wealth Minerals' Salar de Ollague project, Gangfeng's Mariana project, Eramine's Centenario/Ratones project, Posco Lithium's Sal de Oro project, Pepennini's Salar de Pular project, and others, and has prepared numerous third party due diligence and independent geologist reports in Argentina, Chile, and the United States.
· Brandon Schneider specializes in lithium brine reserve estimates, variable density flow modeling, and optimization of brine pumping in salt flats of Argentina and Chile. He has functioned as a CP for the Sal de Vida Project of Arcadium Lithium and Salar de Arizaro Project of Lithium Chile and was responsible for the reserve estimate and projected wellfield design. He also collaborates on the lithium brine exploration phases, resource estimation, and due diligence reviews for lithium brine projects.
Beaumont Cornish Limited ("Beaumont Cornish") is the Company's Nominated Adviser and is authorised and regulated by the FCA. Beaumont Cornish's responsibilities as the Company's Nominated Adviser, including a responsibility to advise and guide the Company on its responsibilities under the AIM Rules for Companies and AIM Rules for Nominated Advisers, are owed solely to the London Stock Exchange. Beaumont Cornish is not acting for and will not be responsible to any other persons for providing protections afforded to customers of Beaumont Cornish nor for advising them in relation to the proposed arrangements described in this announcement or any matter referred to in it.
Notes
CleanTech Lithium (AIM:CTL, Frankfurt:T2N, OTCQX:CTLHF) is an exploration and development company advancing lithium projects in Chile for the clean energy transition. Committed to net-zero, CleanTech Lithium's mission is to become a new supplier of battery grade lithium using Direct Lithium Extraction technology powered by renewable energy.
CleanTech Lithium has two key lithium projects in Chile, Laguna Verde and Viento Andino, and exploration stage projects in Llamara and Arenas Blancas (Salar de Atacama), located in the lithium triangle, a leading centre for battery grade lithium production. The two most advanced projects: Laguna Verde and Viento Andino are situated within basins controlled by the Company, which affords significant potential development and operational advantages. All four projects have good access to existing infrastructure.
CleanTech Lithium is committed to utilising Direct Lithium Extraction with reinjection of spent brine resulting in no aquifer depletion. Direct Lithium Extraction is a transformative technology which removes lithium from brine with higher recoveries, short development lead times and no extensive evaporation pond construction. www.ctlithium.com
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