Hard rock lithium newcomer takes on China

Marion Rae
(Australian Associated Press)


Lithium newcomer Winsome Resources intends to weaken China’s dominance in the mineral needed for electric cars and batteries.

The lithium explorer and developer will make its Australian stock market debut as it targets production within five years at its hard rock lithium prospects in Quebec, Canada.

Perth-based managing director Chris Evans told AAP that Australia has traditionally relied on China to process the output from Western Australia’s lithium mines.

“In the recent tensions with China, investors are interested in an Australian lithium story that doesn’t involve China,” he said.

Lithium is on the critical minerals list of both the United States and Canada as both countries adopt more ambitious plans to decarbonise their economies, which will require a range of ingredients.

“North America is trying to very quickly develop its own internal battery supply chain – to produce the batteries but also source the raw materials,” Mr Evans said.

Quebec, in particular, has several hard rock lithium mines being developed.

“Canada is pretty much acting like the 51st state of America when it comes to critical minerals,” he said.

“We’re very confident that within the next five years there’ll be one if not two or three lithium conversion facilities built within Quebec, so we’ll be able to have our product converted locally.”

Currently, Western Australia produces about half of the world’s lithium as hard rock lithium concentrate.

Most is sent to China to be processed into lithium hydroxide or carbonate – the main lithium chemicals that go into batteries.

Mineral Resources’ hard rock lithium mines at Mt Marion in the Goldfields and Wodgina in the Pilbara region make it one of the world’s largest owners of hard rock lithium assets.

Pilbara Minerals is also jockeying to become a low-cost, long-term lithium producer.

A different process of producing lithium, from brines in vast salt lakes, is used by established ASX-listed lithium producer Orocobre.

Orocobre merged with Galaxy Resources in August to combine assets in Argentina’s “Lithium Triangle” with Galaxy’s Mt Cattlin lithium mine in Western Australia to create the world’s fifth-largest lithium company.

Headquartered in Australia, Orocobre last month began to build a processing plant in Japan to convert lithium carbonate into battery grade lithium hydroxide, already looking at a future supply chain that doesn’t rely on China.

More ambitious emissions reduction targets in Europe and North America have seen governments ramp up subsidies for electric cars to help take petrol and diesel vehicles off the road.

Canada plans to phase out sales of new petrol and diesel-powered cars and light trucks by 2035 as part of its plans to achieve net zero emissions by 2050, and has state and federal subsidies for buyers.

Most of the world’s car makers have announced plans to go electric, but Japan’s Toyota Toyota Motor Corporation is also adding hydrogen vehicles to its future fleet.

“The enemy is carbon, not internal combustion engines,” Toyota chief executive Akio Toyoda said earlier this month.

Toyota did not join a pledge made by some car makers at the Glasgow climate conference to work towards all new car sales being zero-emission by 2040 – and in some markets by 2035.

But North American giants Ford Motor and General Motors as well as Europe’s Volvo, Mercedes-Benz, Jaguar Land Rover and China’s EV maker BYD Co have signed up.

Australia was not a signatory but is pursuing its own future fuels strategy backed by a $250 million fund.

Federal priorities include access to public electric vehicle charging and hydrogen refuelling, safely plugging battery EVs into the electricity grid, heavy and long-distance vehicle technologies, and commercial fleets.

Brisbane start-up Evos launched a homegrown EV charger this month, targeting government fleets as the NSW, South Australian and Tasmanian governments plan electric vehicle-only fleets by 2030.

From 2024, the European Union will bring in new rules on lithium batteries, which will require disclosure of their carbon footprint.

The World Economic Forum has said it is concerned the production of the raw materials that go into EV batteries, including lithium, cobalt, nickel and manganese, can be carbon intensive.

“In Quebec, 99 per cent of all power is hydro power, which means we can harness that. We have hydro power lines passing through our claims,” Mr Evans said.

“We’ll have a low carbon footprint product that will hold us in good stead for onselling that to end users.”

He said there was no doubt over the next decade the world would need 10 times as much lithium as it produced today.

“There’s more than enough room for all the lithium plays to get into production over the next 10 years,” he said.

Many people who invest in new mining stocks like to be gamblers.

“Winsome means pleasant or attractive, so it’s a nice word and a play on words – you win some,” he said.

Mr Evans said he planned two to three years of exploration and resource development, followed by an 18-month to two-year period of construction and starting production.

“Four to five years is reasonable, and these things can always be fast-tracked.”


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