Australia's lithium miners bank on brighter times
Australian-listed lithium miners are preparing for better times ahead, filings showed this week, as they outlined expansion plans in the wake of soaring prices for the raw material used in electric vehicle batteries, reports Reuters
Mineral Resources Ltd, Orocobre Ltd and Galaxy Resources filed reports that pointed to a rebound in lithium demand, through better sales and building out new projects, flagging upbeat earnings as the reporting season begins next week.
The reports suggest that stimulus measures to combat the economic effects of covid-19 are feeding through to the real economy and to electric vehicle sales.
China, the world’s biggest producer of battery chemicals, reported a shar p jump in economic growth in the first quarter, propelled by stronger demand at home and abroad and continued government support for smaller firms.
Mineral Resources said on Friday its lithium hydroxide plant in Western Australia was on track for commissioning in the second half of the year. It holds 40% of the joint venture with Albermarle.
Orocobre had said on Wednesday that production of lithium carbonate from its Olaroz lithium operations in Argentina is sold out until the end of June 2022, although more will be available in the second half of the year as an expansion comes on line.
Galaxy Resources on Wednesday detailed plans to produce lithium carbonate at its Sal de Vida project in Argentina and up dated investors on the amount of lithium reserves it has.
It plans to produce 10,700 tonnes per year of battery-grade lithium carbonate from late 2022, at an estimated capital cost of $153 million.
The expansion progress comes as prices for lithium carbonate have surged by nearly 140% over the past six months, half of that coming this year.
In Australia, prices of hard rock lithium (spodumene) lagged in the recovery, but have rallied by 50% since the start of March to $640 from as low as $380 late last year.
DRC selects Fortescue to develop giant hydro project
Democratic Republic of Congo's (DRC's) government said on Tuesday Fortescue Metals Group would develop the Grand Inga hydroelectric power project, including a 4,800-megawatt dam that has already been committed to Chinese and Spanish developers.
Fortescue to develop dams for world's largest hydroelectric project
Australia's Fortescue confirmed it was in talks with Congo to develop a series of dams that could become the world's largest hydroelectric project, but it said no formal binding agreement had been concluded.
Fortescue's involvement is the latest twist in Congo's decades-long quest to expand Inga, whose two existing dams - completed in 1972 and 1982 - have a combined installed capacity of nearly 1,800 MW.
The proposed expansion of six more dams would bring capacity to over 40,000 MW, roughly double the size of China's Three Gorges dam, currently the world's largest. Total development costs have been estimated at up to $80bn.
In 2018, a Chinese consortium that includes China Three Gorges Corporation and a Spanish consortium that includes AEE Power signed a deal with Congo's government to develop the third dam, known as Inga 3.
Ground has yet to be broken on Inga 3 because of questions over its financial viability. Alexy Kayembe De Bampende, President Felix Tshisekedi's top infrastructure advisor, said the project would now be led by Fortescue.
"Fortescue will be the sole operator for the entire Grand Inga (3 to 8). Chinese & co are welcome to join Fortescue," he told Reuters."There has been discussion between Chinese (Three Gorges) & AEE and (Fortescue) since last year to work together."
Three Gorges and AEE Power did not respond immediately to requests for comment.
DRC's Grand Inga green energy project will create hundreds of thousands of jobs
In a memorandum of understanding signed between Fortescue and Congo in September 2020, Fortescue "acknowledges the existing potential rights held on Inga 3 by third parties".
"In the event that, for any reason, such rights to develop Inga 3 become available, the government of the DRC undertakes to secure for Fortescue Future Industries an exclusive first option to develop Inga 3," it said.
A senior official at the government's Agency for the Development and Promotion of Grand Inga (ADPI), speaking on condition of anonymity, said the ADPI had not been involved in the talks with Fortescue.
Fortescue chairman Andrew Forrest met Congo President Felix Tshisekedi on Sunday to discuss the project. Forrest said Fortescue would use the energy from Inga to produce hydrogen to export around the world.
"The capital cost of this will be many many tens of billions of dollars and direct and indirect employment will be in the hundreds of thousands," he told reporters.
Fortescue has said it plans to fund the majority of its green energy projects off its balance sheet, investing about $1bn a year of its own money.
Fortescue's statement was made in response to an article in the Australian Financial Review.
Meanwhile, Fortescue has teamed up with Hatch, Anglo American and BHP, to form a Green Hydrogen Consortium focused on ways of using green hydrogen to accelerate decarbonisation within their operations globally.