- An estimated 30 million electric vehicles expected to be on the road by 2030
- Shortage of lithium for batteries poses an imminent risk
- Lithium Chile’s 617 square miles of claims could help plug the gap
A recent report on the electric vehicle (EV) market should bring good cheer to investors of Lithium Chile Inc. (TSX.V: LITH) (OTCQB: LTMCF). “Our latest forecast shows sales of electric vehicles (EVs) increasing from a record 1.1 million worldwide in 2017, to 11 million in 2025 and then surging to 30 million in 2030 as they become cheaper to make than internal combustion engine (ICE) cars”, wrote analysts at Bloomberg New Energy Finance (BNEF) (http://ibn.fm/e47Ep). Millions of EVs will require millions of lithium batteries and lots of lithium – there’s about 63 kg of lithium in a 70 kWh Tesla Model S battery pack. The expected supply from Lithium Chile should come in handy. The junior explorer has the largest land package, acquired at very low cost, of any private lithium miner, with some of the highest sample grades recorded in the world’s most lithium-rich region.
As automakers ramp up production of EVs, supply shortages loom on the horizon. One large Tesla supplier expects (http://ibn.fm/NYViB) a supply squeeze, “not in the short term, but in the longer term there is still risk of a shortage… especially 2023 and 2024…” Every tonne of lithium will count, and Lithium Chile is likely to have many to offer. The company now has a lithium property portfolio consisting of 16 salars and one laguna complex in Chile. The properties include 64 square kilometers on the Salar de Atacama, which hosts the world’s highest concentration of lithium brine production and is currently the source of approximately 30 percent of the world’s lithium production. Lithium Chile’s extensive holdings are the largest held by any private pure play lithium operator. Extending over 159,700 hectares (617 square miles), the claims cover an area much larger than Barbados, with its 430 square miles of land mass.
Despite the vast extent of its holdings, the cost to Lithium Chile has been a fraction of what might have been expected. On average, these claims were acquired at $3 per hectare; however, their current market price is in the range of $1,500-$2,000 per hectare. Moreover, soil samples have been reported consistently above the 1,000 mg per liter of lithium mark. This compares very favorably with production grades in the U.S., which are typically just 190-200 mg per liter of lithium.
Five projects are now under the spotlight. In order of promise, they are Coipasa, Helados, Atacama, Turi, Ollague and Talar. An area of 58 square kilometers has been identified as a high-priority target at the Coipasa property, which covers 113 square kilometers, or about 70 percent of the 163 square kilometers Salar de Coipasa. Lithium values in the brine range from 310 mg/L (milligrams per liter) to 1,410 mg/L. Near surface brines with a lithium-potassium (Li:K) ratio of 0.06 and magnesium-lithium (Mg:Li) ratio of 3.9, comparable to the Li:K ratio of 0.08 and Mg:Li ratio of 6.4 at the Salar de Atacama, have also been reported (http://ibn.fm/onCd5).
At Ollague, results have been just as promising. At the 2,200 hectare property, where the water table is just 40-50 cm deep, sampling has returned around 1,400 mg per liter of lithium.
Naturally, such high concentrations at such shallow depths reduce production costs. Lithium brine production in Chile is the cheapest in the world at around $1,500-$1,800 per ton, while mining from spodumene costs about $5,000 per ton. With those advantages in location and cost, Lithium Chile looks prepared for any supply squeeze.
For more information, visit the company’s website at http://ibn.fm/LTMCF
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