Lithium and COVID-19: Who’s Reacting and How?

- March 23rd, 2020

To help investors track what’s happening in the market, INN has gathered responses to COVID-19 from both major and junior lithium companies.

The coronavirus pandemic has hurt the world in many fronts, with uncertainty hitting the commodities markets across the board.

Questions about how the pandemic will impact the lithium-ion battery supply chain continue to emerge, and as governments start to impose restrictions on travel, business and operations many investors are also starting to wonder how long this will last.

To help investors track what’s happening in the market, we’ve gathered our lithium-focused COVID-19 coverage below and listed responses from both major and junior lithium companies. Read on to learn what they’ve done or said so far, and scroll down to see more COVID-19 coverage from the Investing News Network (INN).

All news and data were current as of March 23, 2020. This article will be updated as new information becomes available — if you know of a lithium company that has issued a response to COVID-19 but is not listed, please email editorial@investingnews.com. 

Lithium and COVID-19: INN coverage

Lithium and COVID-19: Producers

Ganfeng Lithium (OTC Pink:GNENF,SZSE:002460) — Chinese top producer Ganfeng was one of the first companies to release news about the coronavirus impact on its operations on February 13. The company said at the time it had plans to increase its battery-grade lithium hydroxide prices by no more than 10 percent due to higher transportation fees and production costs resulting from COVID-19.

The Chinese mining company has interests in lithium resources around the world, but its primary source of lithium raw materials is Mount Marion in Western Australia.

Ganfeng also has supply agreements in place with Tesla (NASDAQ:TSLA), carmaker BMW (OTC Pink:BMWYY,ETR:BMW), Korean battery maker LG Chem (KRX:051910) and Volkswagen (OTC Pink:VLKAF,FWB:VOW).

Tianqi Lithium (SZSE:002466) — China’s Tianqi said on March 22 it had postponed commissioning of the first phase of its flagship Australian processing plant due to rising liquidity problems after the coronavirus outbreak.

Back in September, the company had already announced delays to the expansion of its Kwinana hydroxide chemical facility, which is expected to produce 24,000 tonnes per year during Stage 1.

Aside from Kwinana, Tianqi owns 51 percent of the Greenbushes mine in Australia, has an interest in top producer SQM and operates three plants in China.

Albemarle (NYSE:ALB) — Chile’s Albemarle said on March 10 it is experiencing a “weak” first quarter in China, where most of the company’s processing facilities and customers are located.

“We have had no effect on production or significant impact on shipments from Chile,” the company said in a statement to Reuters on March 17.

The company owns lithium brine operations in the US and in the Salar de Atacama in Chile, and it owns a 49 percent stake in the massive hard rock Greenbushes mine. It is also developing the Wodgina hard rock lithium mine in Western Australia in joint venture with Mineral Resources (ASX:MIN).

SQM (NYSE:SQM) — Albemarle rival SQM reported earnings for 2019 on March 2, mentioning the impact the novel coronavirus has had on its business. The company said it was taking precautions to safeguard its employees.

In China, CEO Ricardo Ramos said logistics have been affected but there are signs that things are getting back to normal.

“At this point, we believe sales volumes could be lower during the first quarter of 2020 when compared to our original expectations,” he said. “Depending on the evolution of the coronavirus outbreak, we may be able to recover some of those sales volumes and reach 55,000 to 60,000 metric tonnes in 2020.”

SQM’s brine operations are in the Salar de Atacama in Chile, and the company is also developing the Mount Holland hard rock lithium project in Australia together with Wesfarmers (ASX:WES).

Livent (NYSE:LTHM) — Argentina-focused Livent has suspended all its production operations in the provinces of Catamarca and Salta as of mid-day on March 22 as a result of a government emergency decree ordering a national mandatory quarantine effective through March 31.

The company is working closely with provincial and federal authorities to be given an authorization that would allow operations to resume under a second decree, which allowed for certain exemptions. As a result of the response to COVID-19, Livent has also suspended all capital expansion work globally.

Livent operates its lithium business in the Salar del Hombre Muerto in Argentina.

Orocobre (TSX:ORL,ASX:ORE) — Another Argentina-focused company hit by the restrictions imposed as a result of COVID-19, Orocobre said on March 23 it was suspending all its operations until the end of the month to comply with the South American government’s decree.

The Olaroz lithium facility has moved operations to care and maintenance. Plans are being developed to ensure that when quarantine restrictions are lifted production will recommence within a week. Additionally, Orocobre has suspended all development operations related to the Stage 2 expansion.

In Japan, construction of the 10,000 tonne per year lithium hydroxide plant is not currently affected but there may be some disruption with Chinese sourced equipment that could delay completion.

Galaxy Resources (ASX:GXY,OTC Pink:GALXF) — Australia’s Galaxy Resources has also followed the decree imposed by the Argentine government on March 19 at its Sal de Vida project in Salta province. In response to the government’s preventative measures, the majority of its Sal de Vida project workforce is demobilising from site with only a skeleton crew to remain for essential services.

Galaxy, which also operates the James Bay lithium pegmatite project in Canada and the Mt Cattlin lithium-tantalum producing mine  in Australia, said is closely monitoring the situation across all areas of the business and will inform the market accordingly as the situation changes.

Lithium and COVID-19: Junior companies

Lithium Americas (NYSE:LAC,TSX:LAC) — The Vancouver-based company said on March 20 that it was suspending construction activities at its Cauchari-Olaroz lithium project in Argentina, which is developing with Chinese top producer Ganfeng, due to government-mandated restrictions in response to COVID-19.

The suspension of construction may impact the company’s previous estimate for completion of construction by early 2021, but it’s difficult to say to what extent at this point. Lithium Americas said it is also monitoring developments in respect of COVID-19 and its impact on operations at Caucharí-Olaroz and its other business interests, which includes the Thacker Pass project in Nevada.

Cauchari-Olaroz is expected to have a production capacity of 40,000 tonnes per year for 40 years, while Thacker Pass’ output capacity sits at 60,000 tonnes per year for 46 years.

Bacanora Lithium (LSE:BCN) — While COVID-19 has affected Bacanora and its partners, the company said on March 23 that it continues to progress all its workstreams, in particular the completion of its Sonora lithium project’s engineering work.

“The timetable for this engineering work has however been impacted by delays in Asia and North America due to the ongoing government restrictions,” the statement reads. “Completion is now scheduled for Q3, 2020.”

Ganfeng made a strategic investment in Bacanora last October, boosting the finance package for the development of the Mexico-based Sonora asset, which is forecast to produce an initial 17,500 tonnes per year of lithium carbonate. As mentioned earlier, Ganfeng has also been impacted by the novel coronavirus, but Bacanora said it has now also resumed work on the Sonora flow sheet optimisation and process engineering.

ioneer (ASX:INR,OTC Pink:GSCCF) — ASX-listed ioneer owns the Rhyolite Ridge lithium-boron project in Nevada, US, which is expected to produce more than 20,000 tonnes of lithium carbonate per year.

Despite unprecedented market volatility and COVID-19, ioneer confirmed that there have been no impacts to its business operations or ability to meet key project milestones, the company said on March 11.

Piedmont Lithium (ASX:PLL,NASDAQ:PLL) — President and CEO of Piedmont Lithium Keith Phillips provided an update on the company response to the coronavirus on March 18, saying non-essential travel has been eliminated and in-person meetings have been curtailed.

Piedmont is focusing on three areas at its Piedmont lithium project in North Carolina right now: lithium hydroxide test work, its chemical plant feasibility study — which is on track to be published in Q2 — and its chemical plant permitting activities.

Savannah Resources (LSE:SAV) — Savannah Resources is developing the Mina do Barroso project in Portugal, which is expected to produce 175,000 tonnes of spodumene concentrate per year during its 11 year operation. In its financial report posted on March 18, CEO David Archer said the company has acted promptly to safeguard the wellbeing of both its employees and other stakeholders.

“One of (COVID-19) many secondary effects is the impact it has had on global supply chains which incorporate China and other Asian countries,” he said. “Lithium batteries are one such supply chain, and we believe this indirect impact further highlights the need for a sustainable lithium battery supply chain to emerge in Europe … (to) ensure the region has the security of raw material supply it needs.”

Plateau Energy Metals (TSXV:PLU,OTCQB:PLUUF) — The Canadian explorer and developer, which is focused on its Falchani lithium project and its Macusani uranium project in southeastern Peru, also released a response to COVID-19. Peru has been on national quarantine since March 15.

“The situation is rapidly evolving, and the ultimate duration of these restrictions and market impacts are uncertain,” the company said on March 20. “At this time Plateau is not in a position to determine the impact to the advancement of our projects in Peru for 2020.”

Lake Resources (ASX:LKE,OTCQB:LLKKF) — ASX-listed Lake Resources said on March 24 that the impact is limited on the operations of Lake’s subsidiaries due to the previously mentioned restrictions on travel and movements set out recently by the government in Argentina.

Lake’s focus has been on the progressing of lithium brine samples from Lake’s Kachi lithium brine project in Argentina using its US technology partner Lilac Solutions’ direct extraction ion exchange pilot plant module in Oakland, California.

“Lilac will process the brine to produce high-purity lithium chloride for conversion to battery grade lithium carbonate for prospective offtakers,” the statement reads. “COVID-19 restrictions may delay this process.”

Argosy Minerals (ASX:AGY,OTC Pink:ARYMF) — Due to Argentine government measures to limit the contact and movement of people, Argosy Minerals said it has determined to suspend pilot plant operations at the Rincon lithium project until such time as it deemed safe and responsible to resume. Argosy continues to work on funding for its initial 2,000 tonnes per year operation.

Lepidico (ASX:LPD) — Managing Director of Lepidico Josh Walsh sent a statement to shareholders regarding the coronavirus and volatility in the markets on March 20. Walsh said additional precautions have been taken including suspension of business travel, along with a move to working from home and adherence to local safety protocols in the jurisdictions in which the company operates.

“Specific to the Lepidico business, the most evident risks associated with these volatile capital markets and associated coronavirus uncertainty are delays in the medium term to finalizing agreements with third parties,” he said.

However, he added  that constructive discussions continue with prospective offtake partners. Lepidico is currently conducting a feasibility study for a 5,000 tonne per annum LCE capacity Phase 1 lithium chemical plant, targeting commercial production for 2021. Feed to the Phase 1 plant is planned to be sourced from the Karibib lithium project in Namibia.

More COVID-19 coverage from INN

Stay tuned for more of INN’s commodity-specific coverage of COVID-19:

Don’t forget to follow us @INN_Resource for real-time updates!

Securities Disclosure: I, Priscila Barrera, hold no direct investment interest in any company mentioned in this article.

Editorial Disclosure: Piedmont Lithium, Lake Resources and Plateau Energy Metals are clients of the Investing News Network. This article is not paid-for content.

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