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Race to Secure Critical EV Battery Metals Ahead of Chinese Dominance Fully Underway

Energy Metals News – According to the United States Energy Department’s Deputy Secretary David Turk, recent new climate policies are creating jobs and accelerating the USA’s shift to clean energy. For example, BloombergNEF reported that more than $80 billion new investments in battery materials have been announced in North America since the passing of the Inflation Reduction Act, and expects at least $369 billion injected into the country’s clean energy economy. And the moves are needed, as UBS Group AG (NYSE:UBS) has reported that China could control as much as a third of all the world’s lithium supply by 2025. On the flipside, Bank of America Corporation (NYSE:BAC) (NEO:BOFA) claims it sees a lithium surplus in 2023 as “demand eases”, which hasn’t slowed down the efforts of other lithium developers such as Atlas Lithium Corporation (NASDAQ:ATLX), Piedmont Lithium Inc. (NASDAQ:PLL), and Usha Resources Ltd. (TSXV:USHA) (OTC:USHAF).

Providing its shareholders with exposure to both lithium and to nickel, Usha Resources Ltd. (TSXV:USHA) (OTC:USHAF) is fast approaching its important share distribution date of its spin-out creation company, Formation Metals (FMI).

USHA recently pushed out the date of its FMI distribution date from March 24 to April 12, 2023. As of that date, for every 5 shares of USHA an investor holds, they’re awarded 1 share of FMI. Much like a dividend, USHA shareholders will continue to own the same number of USHA common shares as they did on the Record Date. The FMI spin-out was overwhelmingly approved by USHA’s shareholders back in December 2022, garnering support from 99.76% of the votes cast.

The offer is extended not only to investors in the US, Canada, and Germany, but soon also Australians through the ASX.

"We intend to tap into the significant pool of Australian investors who have been expressing interest in Usha and are looking for new investment opportunities and portfolio exposure into North America's lithium markets,' said Deepak Varshney, CEO of Usha Resources. "Additionally, the ASX provides access to a range of specialized mining and resource sectors that are highly sought after by investors worldwide. We are committing to growth and expansion beyond our home market."

Upon completion of the transaction, FMI will carry on holding interest in, and focusing on the advancement of the Nicobat Nickel-Copper-Cobalt Project, while USHA will retain and focus on the advancement of exploration projects in the lithium space, including the Jackpot Lake Lithium Brine Project in Nevada, where the company is presently undertaking is maiden drill program with a goal of defining a 43-101 resource. Specifically at the Jackpot Lake Property, USHA recently identified evaporite crystallization leading to the strategic move to more than triple the company’s land position on the project. With ~$1.2 million working capital, USHA has ample runway to execute its programs towards the Jackpot Lake Lithium resource estimate completion.

Originally it seemed that North Carolina was going to be a focus of lithium production for Piedmont Lithium Inc. (NASDAQ:PLL), however much of that focus has shifted northward to Sayona, Quebec, where Piedmont’s joint venture called the North American Lithium (NAL) project with Sayona Mining Limited is restarting production in H1 2023. Already at the NAL Piedmont announced to initial production of spodumene concentrate (SC6), as plans to fully restart the operation seem to remain on schedule.

"This initial production from NAL underscores the diligence and dedication of the management team to restart the mine and concentrator both on time and on budget,” said Patrick Brindle, Executive Vice President and Chief Operating Officer of Piedmont Lithium. “NAL is the most advanced lithium project in terms of development in the U.S. and Canada, and we expect the operation to provide the only major source of new SC6 production in North America in the near term."

Outside of North America, Atlas Lithium Corporation (NASDAQ:ATLX) is steadily advancing its 100% Minas Gerais Lithium Project in Brazil, announcing that the metallurgical team of SGS Canada produced at their Lakefield site over 10kg of commercial-grade lithium concentrate from processing approximately 117kg of representative or from Atlas’s Brazilian property using standard dense media separation (DMS) technology.

"These results indicate that efficient and cost-effective processing using well-established DMS methods is possible for our ore,” said Marc Fogassa, Atlas Lithium's Chairman and CEO. “Our samples achieved commercial grade for use within established battery supply-chain processing routes. We believe that this is a key milestone as we further advance our project."

It seems that two different large banks have differing concerns over the lithium space at the moment, as UBS Group AG (NYSE:UBS) recently pointed out that China could control as much as a third of all the world’s lithium supply by 2025, while Bank of America Corporation (NYSE:BAC) (NEO:BOFA) seems to think that there’s a lithium surplus emerging.

The message of UBS was carried by Bloomberg, which showed that the bank expects Chinese-controlled mines, including projects in Africa, to raise output to 705,000 tons by 2025, up +260% from their 194,000 tons produced in 2022. That boost would bring China’s global contribution of the battery metal to 32%, up from 24% in 2022.

This race isn’t going away, as US President Joe Biden recently met with European Commission President Ursula von der Leyen to discuss a deal on minerals used in EVs ahead of green investments. If finalized, the agreement has a shorter-term benefit in defusing a trade dispute between the US and EU, by allowing EU companies access to some of the benefits of the IRA.

“The global demand for these minerals in the years to come will be enormous. And we’re highly dependent on China,” said US Treasury Secretary Janet Yellen during her testimony in the House Ways and Means Committee. “One of the goals of the IRA is to broadly strengthen supply chains for these critical minerals and their processing.”

As for Bank of America’s prediction, the bank predicted a lithium surplus back in 2022, with a deficit set to resume in 2027.

“We see a lot of supply coming out from lithium mines ... We are expecting 38% lithium supply growth this year,” , said BoA Securities’ head of Asia Pacific basic materials, Matty Zhao in an interview with CNBC. “That’s why 2023 is likely to turn into a surplus year for lithium.”

Goldman Sachs echoed BoA’s sentiments, in a note written back in May 2022, forecasting lithium supply to grow on average 33% annually between 2022 and 2025.

“We expect Chinese lithium project expansions to multiply rapidly, in particular integrated hard rock projects, just as ex-China spodumene supply continues to strengthen,” wrote Goldman Sachs’ analysts.

Meanwhile, lithium giant Albemarle has said it expects the Chinese EV market to grow 40% this year, bossing demand for the battery metal in the world’s largest auto market, and putting at least another 3 million new EVs on the road. Meanwhile, the World Bank expects demand for critical raw materials to skyrocket by 500% by 2050.

Regardless, the race is officially on for the US and EU to produce clean tech in a serious effort to reduce their collective reliance on China.

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