The Conversation (0)
Talison Lithium Ltd. reported a quarterly sales increase of 74 percent, resulting from strong demand from customers for lithium concentrate and the increased production capacity at the Greenbushes Lithium Operations following completion of the Stage 1 expansion in December 2010.
On Tuesday, Talison Lithium Ltd. (TSX:TLH) reported a quarterly sales increase of 74 percent, resulting from strong demand from customers for lithium concentrate and the increased production capacity at the Greenbushes Lithium Operations following completion of the Stage 1 expansion in December 2010. Western Australia-focused Talison said production rose 33 percent to 88,315 tonnes of lithium concentrate, the equivalent of about 13,100 tonnes of lithium carbonate. The Perth-based miner, reported sales of lithium concentrate of 97,001 tonnes for the January-March quarter on increased demand for lithium concentrate, compared with 55,864 tonnes in the previous year.
In early March, Talison announced final approvals and details on the Stage 2 expansion of production capacity of the chemical-grade plant in Australia to double its production capacity. The company is expecting continued strong demand for lithium concentrate and originally announced the design of the expansion to be revised allowing for further increases in production capacity above the initial design.
Last September 23, Talison Lithium went public through a reverse takeover (RTO) whereby Talison merged with Salares Lithium. The objective was to obtain early stage brine projects in Chile to compliment the high-grade lithium-bearing spodumene project at the Greenbushes Lithium operation.
The market has responded positively to the news as share price appreciation has taken the company to trading in the range of $5.10 in Wednesday morning trading, an increase of over 4 percent.
South American project expansion
Lithium Americas Corp. (TSX:LAC) recently announced plans to start building a lithium carbonate facility next year at its Cauchuri project in Argentina. The operation is expected to have a total output capacity of 40,000 tonnes of lithium per year and cost $398 million, adding to the company’s revenue by 2014. The plant is to be designed to exploit about half the project’s resources over a 40-year mine life at operating costs of $1,434 per tonne, well below some analysts’ forecasts. The company indicated this Preliminary Economic Assessment( PEA) for the Cauchari-Olaroz lithium brine project, is anticipated to be the third largest in the world, and does not include by-products potash and borax.
Last month, Lithium Americas was generating headlines news for changes in environmental permitting reviews by the provincial government potentially impeding the final mining permit for its Cauchari-Olaroz project, but this has not been demonstrated to have materially affected current development.
Equity research firm Byron Capital Markets has increased its price target for Lithium Americas by 29 percent, to $3.60, from the previous $2.80 target. Investors will note that this bullish price target was directly related to Byron Capital Markets original expectation of operating costs in the $2,200 per tonne range.
Byron noted in a report that the capital costs of the project will be muted by the terms of Lithium Americas’ off-take agreements with Magna International and Mitsubishi Corp, as these partnerships could help secure interest-free debt. “We have always believed that the place to be in this market is in the lower quartile of operating costs and based on this PEA, it looks like LAC will be in that quartile. Additionally, there is upside when potash and boron by-products are included in the equation.” Byron said it believes the property will be able to hit its 40,000 tonne target by 2018.
Last December, Lithium Americas had estimated total measured and indicated resources of about 1 million tonnes of lithium metal and 5.3 million tonnes of lithium carbonate at the Cauchuri project.
Battery manufacturer expecting strong mid term demand outlook
Samsung SDI (SEO:006400) is predicting the global lithium-ion battery market could swell to $32 billion in 2015 from $11 billion last year. The estimate is more bullish than some analysts’ predictions, reflecting prospects for the fast-growing electric car battery sector.
Samsung SDI, which currently counts Apple Inc and Samsung Electronics Co among its major battery clients, also estimated electric vehicles could account for 7 percent of the global automobile market by 2015, rising to 17 percent by 2020. Earlier this month, the company announced that it planned to spend $359 million on battery production this year in order to boost capacity.