The electrification of cars continues to get support by governments that aren’t just encouraging the use of non-combustion cars, but mandating it. Norway, ironically an oil-rich country, is spearheading the EV movement, saying it intends to be all-electric by 2025. India has the same goal for 2030. France is banning sales of new gas- and diesel-powered vehicles starting in 2040. The U.K. also plans to eliminate sales in 2040 and wants all fossil-fuel cars off its roads by 2050.
Elsewhere, the Netherlands are looking to lock-down new laws putting an end to gas and diesel cars, as is Germany. China doesn’t have regulations on the table, but has made its initiatives clear, while incentivizing auto makers to invest in electrification.
Auto makers are generally on board, sinking millions into R&D to build efficient EVs with long ranges, short charge times and smaller price tags. No traditional auto company has gone more headlong into EVs as the future than Volvo, who declared in July that every car it sells will be electrified by 2019.
It’s this commitment to EVs that has invigorated the lithium market due to the world’s lightest metal being integral to the rechargeable batteries that power most electric vehicles. That goes without mentioning all the current uses for lithium, as well as rising demand for energy storage as part of the renewables evolution. To wit, most analysts forecast a steep shortfall in lithium supply based upon rising demand going forward, including Deutsche, who sees a 300% increase from today’s level to 534,000 metric tonnes annually.
A handful of majors currently dominate the supply chain, but smaller players, like Vancouver-based Standard Lithium (TSX-Venture:SLL) (OTCQX:STLHF) (Frankfurt:S5L), are rapidly emerging due to their properties and expertise to step up and fill the supply gaps. Standard Lithium already had the massive Bristol Lake Brine Project located in the Mojave region of San Bernardino County, CA in its portfolio and is in the midst of negotiating another deal to further expand is U.S. lithium footprint.
The company early this month penned a Memorandum of Understanding with an unnamed New York Stock Exchange-listed company contemplating an option for Standard to acquire certain rights to conduct brine exploration and production and lithium extraction activities on approximately 30,000 net brine acres overlying the Smackover Formation in a region with a long history of commercial-scale brine processing.
While details weren’t provided on the target land of the MoU, Smackover oil-field brines are metal-rich brine anomalies in reservoir rocks along the Gulf Coast from east Texas to Florida known to be a prime lithium resource. The Smackover brines have been exploited for Bromine by numerous chemical companies over the years and are currently one of the largest source of Bromine in the world, accounting for 40% of world production. Albemarle Corporation, the world’s largest lithium producer and operator of the world’s largest bromine manufacturing operations has previously announced plans to separate lithium carbonate from Smackover brine, with what it calls a “selective recovery” technique. This resource may be one of the most promising ones to develop, given that a large-scale brine extraction, processing and re-injection industry is already well established.
According to Donald E Garret, author of the Lithium Handbook “A few of the world’s oil field waters have a medium-high Lithium content, with limited areas of the extensive Smackover brines in the US perhaps being the highest. One zone in both Texas and Arkansas has [Li] of 50-572ppm. The Texas brine has an average of 386ppm and the Arkansas brine averages 365ppm. The brine is found at a depth of 1800m to 4800m. Brines are commercially processed to recover Bromine”. Garrett estimates that the Smackover is one of the world’s largest lithium brine reserves and contains 1MT of Lithium metal.
Good news was also received this month with positive results from a Controlled-Source Audio-Magnetotellurics / Magnetotellurics (CSAMT/MT) geophysical survey at the Bristol Lake Project. The survey suggest that high lithium brines concentrations are located across nearly every inch of the 16,000+ acre claim package. Resistivity levels from this type of study are critical in defining likely lithium resources and drill targets, with lower values being better. As described by Standard Lithium chief executive Jim Hasbrouck, the resistivity levels at Bristol Lake were the lowest he has measured in the U.S. and more resemble that of the prolific “lithium triangle” of Chile, Argentina and Bolivia.
That’s certainly reason to be optimistic.
With Bristol Lake already permitted for extensive brine extraction and production and all the necessary infrastructure in place, the optimism could soon be realized as Standard leverages one property to keep making acquisitions in other near-term producers.