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Lake Resources advances Kachi Project towards production as lithium demand grows three-times the speed of supply

Published: 22:00 10 Jan 2022 EST

Snapshot

  • Lake Resources is utilising clean, direct extraction technology for the development of sustainable, high purity lithium from its flagship Kachi Project.
  • Lake’s four projects cover 2,200 square kilometres in a prime location within the Lithium Triangle in Argentina, where 40% of the world’s lithium is produced.
  • Kachi covers 70,000 hectares over a salt lake, with a large indicated and inferred resource of 4.4 million tonnes lithium carbonate equivalent (LCE).
  • COP26 climate goals necessitate the production of over 7 million tonnes of LCE annually, 17 times more than this year’s estimated production.
  • Lake’s technology partner, California-based Lilac Solutions Inc has developed efficient and disruptive clean technology to produce sustainable high purity lithium.
  • Lilac’s cost-competitive technology has been backed by the Bill Gates-led Breakthrough Energy Fund and MIT’s The Engine Fund.
  • Tier 1 EV and battery makers are seeking more sustainable, responsibly sourced materials in their supply chain.
Lake Resources NL - Lake Resources advances Kachi Project towards production as lithium demand grows three-times the speed of supply

Lake Resources NL (ASX:LKE, OTCQB:LLKKF) is advancing its flagship Kachi Project in Argentina towards production while expanding the lithium resource at its other projects including Cauchari and Olaroz, as lithium demand grows at three times the speed of lithium supply.

Consultancy Benchmark Mineral Intelligence (BMI) forecasts battery demand from the auto sector alone will rise by 40 times between 2020 and 2040, as electric vehicles (EVs) become mainstream.

Signatories to COP26’s Glasgow declaration, which included automakers Ford, General Motors, Mercedes-Benz and Volvo, said they would work towards all sales of new cars and vans being zero-emission globally by 2040, and no later than 2035 in leading markets, BMI noted in a November 10 report.

BMI estimates that if all cars and vans sold in 2040 were electric, it would represent almost 8,400-gigawatt hours (GWh) of lithium-ion battery demand.

COP26 climate goals necessitate production of over 7 million tonnes of lithium carbonate equivalent (LCE) annually, 17 times more than this year’s estimated production.

Yet there is currently insufficient investment in raw material supply to meet battery demand in 2030, let alone 2040, BMI CEO Simon Moores said.

“Right now lithium demand is growing at three times the speed of lithium supply,” he said. “That’s a big problem that needs to be solved.”

Direct extraction technology

Lake Resources is a clean lithium developer utilising clean, direct extraction technology for the development of sustainable, high purity lithium from its flagship Kachi Project, as well as three other lithium brine projects in Argentina.

The company’s four projects cover 2,200 square kilometres in a prime location within the Lithium Triangle, where 40% of the world’s lithium is produced.

Kachi covers 70,000 hectares over a salt lake south of Livent’s lithium operation, with a large indicated and inferred resource of 4.4 million tonnes LCE.

Lake’s technology partner, California-based Lilac Solutions Inc has developed efficient and disruptive clean technology to produce sustainable high purity lithium.

This direct extraction method delivers a solution for two rising demands – high purity battery materials to avoid performance issues and more sustainable, responsibly sourced materials with low carbon footprint and significant ESG benefits.

The method has a small environmental footprint, both physically and by returning almost all brine to its source.

Lilac’s cost-competitive technology has been backed by the Bill Gates-led Breakthrough Energy Fund and MIT’s The Engine Fund, among other leading sustainability investors.

Can lithium miners deliver?

Although building a battery cell production facility can take two years, it can take from five to 10 years to get a new lithium mine online.

Can lithium miners deliver the required supply to meet the world’s electrification targets? And importantly, can they deliver on ESG requirements?

Lake managing director Steve Promnitz says unified action across the entire industry will be crucial.

“Lithium companies will need to work closely with governments, investors, communities, employees and all other key stakeholders to facilitate the necessary supply boost,” he said.

“Importantly, battery-grade supply will be key, yet it also must be delivered in a manner that is environmentally sustainable to ensure the supply chain fulfils its ESG requirements.

“This is an enormous challenge, however at Lake we working to help deliver a solution through our environmentally sustainable, direct lithium extraction (DLE) process that can quickly produce high-quality battery-grade lithium while minimising our impact on the environment.”

High purity lithium

High purity lithium carbonate samples (99.9%) with very low impurities have been produced from lithium brines from Lake’s flagship project.

The growth of higher density batteries to drive the latest EVs has significantly increased demand for a consistently high purity product (battery quality) with low impurities, providing premium pricing for Lake’s planned product.

A pre-feasibility study (PFS) on Kachi by a tier 1 engineering firm has shown the potential for a large, long-life low-cost operation, with competitive production costs at the lower end of the cost curve.

Sustainable ESG benefit

By using a benign water treatment process to produce lithium, Lake avoids any mining and returns virtually all water (brine) to its source without changing its chemistry (apart from lithium removal).

The environmental footprint is therefore far smaller than conventional brine evaporation pond processes or of hard rock mining, providing a better outcome for local communities and the environment.

Tier 1 EV and battery makers have been seeking more sustainable, responsibly sourced materials in their supply chain, as stated by VW, Daimler (ETR:DAI), BMW, Tesla and the European Commission, and this is driving demand for Lake’s product.

With analysts pointing to an increasing supply deficit for battery-quality lithium, Lake’s projects are in the right location at the right time and are ready for development.

Supply chain challenges and opportunities

The recent COP26 global climate change conference has put pressure on governments and industry to speed the energy transition.

Yet the supply chain challenge received little attention from policymakers at the Glasgow summit, according to analysts Wood Mackenzie.

“We see mined commodities as being critical to a successful transition, but supply will have little chance of meeting supercharged demand without concerted efforts to invest in new resources,” said Wood Mackenzie vice-chair Julian Kettle.  

“The tone of the COP26 conference reinforced our view that world leaders have little understanding of the supply chain challenges that an accelerated transition could bring.” 

With the power and transport sectors contributing over 55% of global energy-related emissions, the pressure is on replacing hydrocarbons with “green electrons” from renewable power and “green molecules” such as hydrogen.

The electrification of transport requires the “complete transformation of demand for battery raw materials such as nickel, cobalt, lithium and graphite.” 

20 new mines the size of Greenbushes

Wood Mackenzie sees demand for lithium tripling by 2030, and cobalt demand doubling, among other key battery metals necessary for electrification.

“The lithium market would require 20 new mines the size of Greenbushes – currently the largest in the world – in operation by 2030 [to meet the demand],” it said in an October 13 report. [In lithium brine terms, this would equate to 30 Atacama brine projects (SQM & Albemarle)].

Pointing to the challenge for miners, the consultancy said “for most mined commodities the biggest challenge will be ensuring sufficient supply such that the energy transition does not stall just as it gets started.”

However, Wood Mackenzie noted that COP26 agreements concerning deforestation, methane and other ESG goals “will act to slow supply.”

Lake Resources details lithium expansion strategy in Argentina

Lake Resources NL (ASX:LKE, OTCQB:LLKKF)'s Steve Promnitz says they've kicked off an expansion and integration strategy to fast-track its portfolio of assets in Argentina to deliver the TARGET 100 Program. It's aiming to produce 100,000 tonnes of high purity lithium annually to market by 2030.

on 02/14/2022