USGS (U.S. Geological Survey) released a report in December 2017, listing 23 metals and minerals deemed critical to the economy and security of the United States. In response to the report, President Trump signed an executive order to create a strategy to reduce the Nation’s reliance on critical minerals principally imported and used to create everything from laptops to smartphones and electric vehicles. This executive order was welcomed by U.S. based lithium mining companies as a way to start moving production away from Lithium Triangle in Argentina, Bolivia and Chile.
With over 50% of the U.S.’s annual lithium being imported, companies that could benefit from Trump’s new executive order are Standard Lithium Ltd. (TSXV:SLL) (FRA:S5L), Albemarle Corporation (NYSE:ALB) (OTCQX:STLHF), Nemaska Lithium Inc. (TSX:NMX) (OTCXQ:NMKEF) (FRANKFURT:N0T), Albemarle Corporation (NYSE:ALB), Advantage Lithium Corp. (TSX.V:AAL) (OTCQX:AVLIF) (BERLIN:14D), and Lithium Americas Corp. (TSX:LAC) (OTC:LACDF).
Standard Lithium Ltd. (TSXV:SLL) (FRA:S5L) (OTCQX:STLHF) recently signed a $20 million bought deal private placement agreement with Canaccord Genuity Corp. The funding will help fast track the build out of Standard Lithium’s proposed pilot plant in Smackover, Arkansas. This demonstration scale pilot plant will be adjacent to an existing chemical production facility and will be able process brine from a variety of brine streams including tail brines from the Smackover Formation, which is one of the world’s largest brine deposits. The plant will also be used to process brine transported via railway from the Bristol Dry Lake Project in California.
Dr. Andy Robinson, President of Standard Lithium stated,“The location of the Pilot Plant could not be more favourable, as we will have direct access to the tail brine feed into the site, all necessary utilities, and the access to the services of an existing workforce of skilled and trained brine handling and processing technicians and engineers, all within an existing permitted and fenced brine processing site."
In addition to the continuously operation demonstration pilot plant, Standard Lithium also recently signed an Option Agreement with TETRA Technologies Inc. (NYSE:TTI). The agreement allows for exploration, production, and lithium extraction rights on up to 33,000 acres of brine leases in the productive areas of the Smackover Formation in Southern Arkansas.
Smackover Formation Project Highlights:
- Up to 33,000 acres of brine leases in key brine production fairway in southern Arkansas, adjacent to producing Albemarle leases;
- Historical data from Standard Lithium lease area shows 370-424 mg/L lithium in brines (Moldovanyi and Walter, 1992);
- Arkansas currently produces the equivalent of 42.6 million m3 (9,380,000,000 gallons) of brine per year (based on Arkansas Oil and Gas Commission reported average brine production from 2010-2016), almost entirely from the Smackover Formation;
- Low risk, well understood geology and chemistry;
- Significant infrastructure, roads, power, water, trained workforce in region; and
- Existing brine extraction, processing and re-injection permitting regime.
Robert Mintak, the CEO of Standard Lithium, elaborates, “In our search for opportunities of significance, this is one that could really move the needle. We believe the Smackover may be one of the lithium industry’s most promising regions to develop, given the potential resource size and large-scale brine-handling infrastructure in the region.”
Other lithium producers
Nemaska Lithium Inc. (TSX:NMX) (OTCXQ:NMKEF) (FRANKFURT:N0T) is not among the U.S.-based lithium producers. Instead, Nemaska is headquartered in Quebec, Canada. There, Nemaska is developing one of the world’s most important spodumene lithium hard rock deposits. This is largely coming from the Whabouchi lithium mine, where it will be processed at the lithium hydroxide/carbonate processing plant in Quebec. The plant, currently under construction, will transform spodumene concentrate into high purity lithium hydroxide and lithium carbonate. These products will then be able to be used in lithium-ion batteries.
Albemarle Corporation (NYSE:ALB) is a global producer of lithium but also has lithium production sites in the U.S, such as its Silver Peak plant in Nevada. While Albemarle is currently one of the world’s largest producers of lithium raw material, Trump’s order may shift U.S. focus to those lithium producers that are predominantly located in the U.S. alone.
Advantage Lithium Corp. (TSX.V:AAL) (OTCQX:AVLIF) (BERLIN:14D) may be one of the lithium producers that gets pushed out of U.S. importation if Trump follows through on his order. Advantage Lithium is mainly focused on regions of Argentina for lithium production. Currently, Argentina is a top producer of lithium. However, as Trump’s order may shift greater focus to U.S.-based lithium production, Advantage Lithium may become less of a player than it currently is.
Lithium Americas Corp. (TSX:LAC) (NYSE:LACDF) has projects based in Argentina and Nevada. The company is continuing to advance both projects this year, recently providing an update on on their Cauchari-Olaroz project in Jujuy, Argentina and their Lithium Nevada resource in the McDermitt Caldera of northern Nevada. Stateside, Lithium Americas is planning for a further 2018 exploration drill program focused on mapping the extent of the Lithium Nevada deposit.
As stated in the USGS report, the U.S. “is not a major producer at present but has significant lithium resources.” A positive statement for Standard Lithium and the other companies highlighted above to help shift America’s reliance on lithium to a domestic level.
For a more in-depth look into Standard Lithium (TSXV: SLL) (FRA: S5L) (OTCQX: STLHF) you can view the full report on Streetsignals.com
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