Eye on Lithium: Chemical prices continue to fall as the US extends tax break to Europe

• Prices of carbonate and hydroxide have dropped on bearish EV demand
• Sultan acquires two Canadian lithium properties
• Calidus vends more lithium assets into Pirra Lithium

All your lithium news, Friday March 17.

Lithium chemical pricing in China has continued to fall during the assessment period from March 8 to March 15 with battery grade lithium carbonate down 7.6% to US$54,925/t and lithium hydroxide down 3.6% to US$61,700/t.

Benchmark Mineral Intelligence noted that recent discounts applied to internal combustion engine vehicles in China has buoyed demand for non-battery vehicles, compounding concerns over bearish EV demand in the first half of 2023.

It added that price disparity between carbonate and hydroxide continued to widen week-on-week due to opposing feedstock supply dynamics.

Technical grade lithium carbonate supplies have been boosted by the continued ramp up of production from lithium brine operations in China’s Qinghai Province while the supply of spodumene concentrate into China remains constrained.

Spot market activity for seaborne Asia material remained subdued with carbonate prices holding stable as a result of a limited number of transactions being recorded while hydroxide prices fell marginally in response to declining prices in China.

Inflation Reduction Act to benefit Europe

Meanwhile, the US has – as widely expected – extended its Inflation Reduction Act to include the European Union.

EU President Ursula von der Leyen confirmed that European carmakers would get access to the US market and US tax breaks.

She added that US President Joe Biden had also agreed to discussions on a criticial raw materials agreement, which will seek to ensure that critical raw materials for electric vehicle batteries, whether they are extracted or processed in the European Union, are treated in the same way as if they came from the US.

This will secure supply chains for batteries in Europe and ensure access to the US market.

However, von der Leyen warned that negotiations could only solve some issues and that Europe had to get better at nurturing its own clean-tech industry.

She noted that global investment in the clean transition topped US$1 trillion last year, which is 30% more than the year before and likely to triple by 2030.

“The race on who is going to be dominant in this market in the future. We must get our act together if we want to stay front-runners,” von der Leyen added.

“We must nurture our own clean-tech industrial base, both to create good jobs, well-paying jobs here in Europe and, of course, to ensure access to the clean solutions we so urgently need.”

She pointed to the European Green Deal Industrial Plan, which consists of two legal acts, as the action that Europe is taking to ensure its leadership.

The first is the Net-Zero Industry Act, which facilitates permitting, creates simpler state aid schemes and allowing for tax breaks as well as flexible use of EU funds to achieve the goal of producing by 2030, 40% of the clean tech needed to fulfill its green tradition.

Meanwhile, the Critical Raw Materials Act will seek to secure the supply of critical minerals.

Here’s how ASX lithium stocks are tracking:

LKithium stocks were pretty evenly distributed today with 36 companies finishing in the green, 63 fell flat, and 38 in negative territory.

WHO’S GOT NEWS OUT?

Sultan Minerals (ASX:SLZ)

Sultan has reached an agreement to acquire two highly prospective properties located in well-known lithium-bearing districts in Ontario, Canada.

The Kember Lake and Ruddy properties are located immediately adjacent to or abutting known spodumene bearing pegmatites intersected in drilling and containing defined resources.

Kember Lake is located in northwestern Ontario about 5km from Frontier Lithium’s Pak lithium project and Spark discovery.

Ruddy is north of Green Technology Metals (ASX:GT1) exploration projects.

The company is also raising $1.5m to fund the acquisition and carry out exploration work to delineate drill targets.

Prospech Limited (ASX:PRS)

Prospech is raising up to $2.5m to advanced exploration of its Kolba copper-cobalt project in Slovakia and the Bambra Oy lithium-rare earth element projects in Finland.

The company is acquiring Bambra Oy by spending $100,000 on the exploration and evaluation of the Finnish projects in the first year for an initial 51% stake.

It can then increase this to 100% by spending a further $200,000 in the second year.

Both steps include the issue of 3 million shares in the company.

Recharge Metals (ASX:REC)

Recharge has secured firm commitments from institutional, sophisticated and professional investors for a placement of 30 million shares priced at 10c each to raise $3m.

Proceeds from the placement will be used to fund exploration at the Express lithium project.

Initial work includes the acquisition of LiDAR, high resolution aerial imagery, and magnetics to assist with defining target areas ahead of a summer field campaign.

The summer campaign will include detailed geological mapping and sampling followed by diamond drilling on key lithium targets mapped from the mapping and geochemical sampling.

Terrain Minerals (ASX:TMX)

Assays on more than 20 pegmatite samples collected at the company’s Smokebush project in Western Australia are currently overdue because of excessive demand for lithium testing.

The company has engaged a senior geologist with extensive field experience with lithium bearing pegmatites to better assess the known pegmatite occurrences.

It will also follow-up on petrology sample data which highlighted the possible existence of lithium-rich lepidolite mineralisation.

Calidus Resources (ASX:CAI)

Calidus has signed a binding terms sheet with Haoma Mining to collectively vend their respective lithium rights that haven’t already been transferred into their new entity Pirra Lithium.

These additional rights cover several highly prospective tenements in the west Pilbara, including E45/2983, directly along strike from the King Cole lithium pegmatite discovery of De Grey Mining Limited (ASX: DEG).

Likewise, Haoma will vend in additional tenements in the West Pilbara surrounding Global Lithium Resources Limited’s (ASX: GL1) Archer deposit while Calidus will vend in two Exploration Licences in the promising, but highly under-explored, Northampton Inlier in WA’s Midwest region.

Haoma will hold a 60% stake in Pirra while Calidus will hold the remaining 40%.

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