June 14, 2018
In the past, we’ve talked about how Australia is making a big play to dominate the energy metals space, particularly in lithium. However, we decided to explore this in depth as we feel no one is really talking about their tentacles in the lithium industry, focusing instead on China. We’re not debating China’s sheer dominance in terms of investment in the battery supply chain, as it is truly impressive. However, until they can find economical projects in their country, the Chinese are still heavily dependent on other countries like Chile, Argentina, and especially Australia for their raw materials.
That brings us to the topic of this post- Australia is establishing a global footprint in upstream lithium production. The nation has always been a big producer of natural resources domestically given the abundance of natural deposits, while also exporting their expertise to operate projects abroad. With lithium however, the interesting thing is that the industry is in the early innings of building out supply projects. So in this case, the Australian mining engineers, entrepreneurs, and investors that have scooped up land assets around the world have basically established a foothold for the motherland.
Starting with our home country of the US- Piedmont Lithium and Global Geoscience are a pair of notable companies. Piedmont is reviving the old North Carolina mines that for a long time supplied a large chunk of global demand. Apart from being headquartered and listed in Australia, The company was founded by the Apollo Group, a successful Aussie mining incubator. Looking out in Nevada, where numerous companies are staking claims in lithium assets, Global Geoscience is emerging onto the scene with their massive lithium-boron project. The operation is interesting given its size and unique mineralogy.
In Europe the most notable one this year has been European Metals Holdings. This company was progressing the Cinovec Lithium Project in Czech Republic until the government tried to take it away from them in late 2017/early 2018. However, the company seems to have gotten past those issues, recently commencing pilot plant operations. So as of right now, the largest European lithium deposit is controlled by an Australian company. Other examples in Europe include European Lithium (Austrian project) and Plymouth Minerals (Spanish project).
Finally, we take a look at South America. In Argentina, Orocobre has become one of the more well known lithium projects in the world given their entry as one of the first greenfield brine operations in the past few decades. The company operates in the Salar de Olaroz, which is one of the best brine resources outside of Atacama. With every year, they’ve continued to move past operational issues, further cementing their status in the lithium industry.
As you can see, Australian companies have done a great job snapping up large, high quality lithium projects across the world. Adding to that is the fact that companies like Pilbara Minerals, Kidman Resources, and Mineral Resources all manage top tier assets domestically and are working tirelessly to make Australia the largest supplier of lithium. One of those companies (Pilbara) also recently inked a deal with POSCO to potentially get involved in downstream production in South Korea, further expanding the country’s reach. So while China is certainly deserving of all of the attention they’re getting in the lithium world for their investment across the EV, battery, and now upstream production spectrum, we believe that Australia should not be taken lightly in this game. They’re leveraging their core mining expertise to set up a grapple on the lithium industry for decades to come, both inside the country and abroad.