May 17, 2020

Rockwell Diamonds Agrees to $28.5 Million Deal to Expand Operations in South Africa

Rockwell Diamonds
Diamonds
Operations
Mine site
Admin
2 min
Rockwell CEO and President, James Campbell.
Mining company Rockwell Diamonds has agreed to acquire certain alluvial diamond properties and associated plant and equipment from Bondeo 140 CC for $28...

Mining company Rockwell Diamonds has agreed to acquire certain alluvial diamond properties and associated plant and equipment from Bondeo 140 CC for $28.5 million, assisting Rockwell in expanding its operations in South Africa.

"We are delighted to have concluded this agreement as it represents an exciting growth platform for Rockwell,” said CEO and President of Rockwell, James Campbell.

“Our executive and operational management have demonstrated their alluvial diamond production expertise during Rockwell's corporate turnaround and have the capacity to take on these additional assets.”

The massive deal is comprised of $12 million for the mineral rights and three processing plants, with the remaining $16.5 million allocated to earth-moving equipment fleet and other associated equipment.

"We have a long-standing working relationship with the sellers of the assets which we are acquiring, who initially brought this opportunity to the table and we have agreed to work together in order to find additional opportunities that might benefit both parties," Campbell said on Tuesday.

“We have reviewed a number of consolidation opportunities and the transaction met all our strategic criteria. Its assets are contiguous to our existing MOR operations, which are known for their gem quality diamonds.”

According to Campbell, the deal will help Rockwell significantly increase its operating and resource base and leverage its growth in the Middle Orange River region in South Africa.

“We know the geology of the area. So these new assets offer economies of scale, with the potential to reduce the volatility of our quarterly production results and take us above our target of processing 500,000m3 per month.”

The deal will give Rockwell the opportunity to allocate its financial, human and intellectual capital more efficiently across a broader resource base.

The transaction is subject to customary and regulatory approvals conditions as well as Rockwell raising $12 million on or before March 31 2015. The company expects the deal to close in the second quarter of 2015.

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May 7, 2021

Lithium producers bullish as EV revolution ramps demand

Lithium
Electric Vehicles
Albemarle
SQM
3 min
Lithium producers are drawing optimism from rising prices for the electric vehicle battery metal

Rising demand for lithium is stoking prices for the electric vehicle battery metal, fueling long-delayed expansions that still may not produce adequate supplies that automakers need to meet aggressive production plans.

Lithium

Growing industry optimism from higher lithium prices is a change from last year when funding for mines and processing plants dried up during the pandemic.

Albemarle Corp, Livent Corp and other producers are scrambling to make more lithium, but some analysts worry the recent price jump will not spur a big enough expansion to meet a planned wave of new EV models by mid-decade.

Since January, General Motors Co, Ford Motor Co LG Energy Solution and SK Innovation Co, along with other automakers and battery parts manufacturers, have said they will spend billions of dollars on EV plants.

U.S. President Joe Biden has proposed spending $174bn to boost EV sales and infrastructure. The European Union has similar plans, part of a rush to catch up with global EV leader China.

Those moves have helped an index of lithium prices jump 59 percent since April 2020, according to data from Benchmark Mineral Intelligence, a commodity pricing provider.

The rising demand “reflects what feels like a real and fundamental turning point in our industry,” said Paul Graves, chief executive of Livent Corp, which supplies Tesla Inc. On Monday, it said it would more than double its annual lithium production to 115,000 tonnes.

Graves warned, though, that “it will be a challenge for the lithium industry to produce sufficient qualified material in the near and medium term.”

Albermarle

Albemarle, the world’s largest lithium producer, aims to double its production capacity to 175,000 tonnes by the end of the year when two construction projects are complete. Albemarle's Q1 profit beat expectations thanks to rising lithium prices. Chile’s SQM, the No. 2 producer, said its goal to expand production of lithium carbonate by 71 percent to 120,000 tonnes should be complete by December.

Australia’s Orocobre is paying $1.4 billion for smaller rival Galaxy Resources, a strategy designed to boost scale and help it grow faster in regions closer to customers.

“The next few years are going to be critical in terms of whether there’s enough available lithium supply, and that’s why you’re starting to see commodity prices start to ramp,” said Chris Berry, an independent lithium industry consultant.

The price gains helped Albemarle and other major producers, including China’s Ganfeng Lithium Co and SQM, post big gains in first-quarter profit and boost forecasts for the year.

Even China’s Tianqi Lithium Corp, saddled with debt due to years of low lithium prices, signaled that recovering demand should help it swing to a profit this year.

Electric Vehicles

Forecasts call for demand for the white metals to surge from about 320,000 tonnes annually last year to more than 1 million tonnes annually by 2025, when many automakers plan to launch new EV fleets, according to Benchmark.

Still, demand is expected to outstrip supply in 2025 by more than 200,000 tonnes, so lithium prices may need to rise to encourage producers to build more mines. That could boost the prices consumers pay for EVs. “Companies across the lithium-ion supply chain are in the best position they’ve been in for the last 5 years,” said Pedro Palandrani of the Global X Lithium & Battery Technology ETF , which has doubled in value in the past year.

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