Asian Lithium Interests Generating Momentum

By Dave Brown – Exclusive to Lithium Investing News

One of China’s largest automakers, Shanghai Automotive Industry Corp. (SAIC),  has selected A123 Systems Inc. (NAS:AONE), a developer and manufacturer of advanced Nanophosphate lithium ion batteries and systems, to develop battery packs for a new 2012 model year electric passenger car.

Last week’s agreement will see the battery manufacturer use its lithium cells to develop a customized battery pack that will provide Advanced Traction Battery Systems Co. (ATBS).  The announcement represents an enhancement to a pioneering collaboration established between a non-Chinese battery manufacturer and a leading Chinese automaker. The focus of the partnership is for developing, manufacturing and selling complete vehicle traction battery systems in China, the largest and fastest growing automotive market in the world.

Korea Formalizing Interest

Korea Resource Corporation (KORES) and Lithium One Inc. (TSXV:LI) formalized a joint venture last week to develop Lithium One’s Sal de Vida Lithium Brine Project in Argentina. KORES is the Korean government-owned mining company. Its ambitious strategic objective is to become a global top 20 mining company by 2020 through overseas expansion. South Korea imports 97 percent of its energy and mineral resources, therefore the development of stable long-term supplies is a key strategy for the nation’s economic development.

KORES has the option to earn a 30 percent interest in the Sal de Vida Project by funding and delivering a Definitive Feasibility Study and funding other pre-development Exploration and Prefeasibility activities totalling up to US $15 million.

Martin Rowley, Chairman of Lithium One commented on the implications of the arrangement: “This is a landmark agreement for Lithium One that confirms Sal de Vida as a world-leading lithium and potash brine project. KORES have completed extensive due diligence before entering into this arrangement, confirming the quality of the project and our management team.”

In the Land of the Rising Sun

Honda Motor Co. (NYSE:HMC) has just announced that the 2012 Honda Civic Hybrid will lead its new Civic lineup to challenge the Toyota Prius. The strategy for Honda is to have two models including the Insight and the upcoming Civic Hybrid competing for Prius’ top-hybrid spot.  The 2012 Civic will use Honda’s in-house developed IMA hybrid system found in the CR-Z, Insight and current Civic Hybrid. However, next year, the Civic Hybrid will upgrade from 1.3 liters to 1.5 liters and will become the first Honda hybrid to get lithium-ion batteries. The system is expected to significantly improve the car’s all-electric range.  Investors and auto enthusiasts will be keen to learn more when the car makes its debut at the 2011 Detroit Auto Show.

Earlier in the spring, Honda announced  its first attempt at mass marketing zero-emission motorbikes, an all-electric scooter, with the ultimate objective to compete with rivals in the massive Chinese market, given the demand for electric bikes currently estimated at 17 million units.   The EV-neo will be similar in size to a 50cc scooter and initially will be targeted for commercial users in Japan.

Last month, Japanese electronics company Hitachi (NYSE:HIT) aligned with U.S. battery manufacturer Johnson Controls (NYSE:JCI) in a project to develop lithium-ion batteries.  Although the precise terms of the deal were not disclosed, areas of co-operation included sales, marketing and may involve collaboration on energy storage technology.

Japan’s fourth-largest trading house, Itochu Corp (PINK: ITOCY), announced earlier in July that it had taken a 20 percent stake in a U.S. project to produce lithium and that it expects to start sample shipments for use in car batteries by the end of this year.  The joint venture between Itochu and Simbol represented the third announcement pairing Asian investment interests with an international lithium project in a period of less than one month.