Zinnwald Lithium Share Discussion Threads

[sev22] 28/10/2022 13:18

From this week's Investors Chronicle:

US lithium handouts supercharge projects.

The White House throwing almost $3bn at a variety of upstream and midstream battery metals companies will go a long way to ramping up local capacity.

October 27, 2022
By Alex Hamer

Last week, the US government dived into mining and battery processing.

As part of the Inflation Reduction Act (IRA), the Department of Energy handed several companies lumps of cash ranging from $50mn (£44mn) to $316mn, in what adds up to almost $3bn in total investment. There are positives for UK investors within this plan – several companies have UK links, such as Piedmont Lithium (US:PLL), which is tied to Atlantic Lithium (ALL). Other beneficiaries, like Albemarle (US:ALB), are big enough to be bought and sold from abroad.

In the medium and long term, the IRA will introduce strict rules about the sourcing of raw materials in electric cars, so the government has moved to build up the local supply chain. The grants all went to companies building or planning battery metals processing facilities.

This is also an important move for those exposed to EU carmakers, given the US’s importance as a buyer. The US was the common market’s largest single export market in 2021, according to the European Automobile Manufacturers' Association (Acea), overtaking the UK with 18.5 per cent of total sales. The UK share stood at 18.4 per cent, down from 30 per cent in 2016.

As we wrote earlier this month, the US is advancing its domestic electric vehicle capacity at speed, which is necessary as China controls much of the existing processing outfits and could throttle supplies. At the same time, the US has stolen a march on Europe – as shown by Benchmark Mineral Intelligence data. In 2020, Benchmark forecast European battery production capacity, as a percentage of total worldwide production, would reach 14.2 per cent by 2024.

The consultancy now says the continent will provide 12.4 per cent of global batteries, but even then not until 2026.

“The new rules have restricted the eligibility for tax incentives to a relatively small number of vehicles assembled in North America in the short term and, in the medium term, may disqualify any vehicle at all from obtaining such a benefit due to very high local-content rules for batteries,” said Acea in a statement.

On the other end of the scale is North America, which has gone from a forecast 8.2 per cent to 12.3 per cent of global output. “Europe’s battery industry will struggle to keep pace with rising demand for electric vehicles this decade, as the region falls behind the US and Asia in terms of becoming self-sufficient in lithium ion battery cells,” Benchmark said last week.

Lithium and other metals require significant processing to get to the high-purity forms that go into batteries. China’s existing expertise and existing capacity mean it is still comfortably top dog. But as the electric vehicle market grows, other countries will need to increase their self reliance – because of the race for raw materials and the potential for geopolitical tensions leading to export and import routes being blocked.

Stopping midstream.

There are plenty of big statistics around the mining of lithium itself – by 2040, more lithium will be needed per month than was mined in all of 2021, says Benchmark – but an easy assumption is that US and European production will be piecemeal, and existing major exporters Chile and Australia will continue in that role, with other regional players such as Argentina and Brazil also contributing. West Africa will likely be a key export region, although is still awaiting a proof-of-concept operation. Ghana and Cote d’Ivoire already have plenty of gold miners, however.

The modern US is not some wild west where miners roll in and hit cash flow immediately – like Europe, permitting has not been easy for those looking to dig up lithium. The highest profile project, Thacker Pass in Nevada, will need to clear a court battle to begin construction, as First Nations groups contest the government's decision to give it the green light. Trident Royalties (TRR) holds a royalty on the project, owned by Lithium Americas (US:LAC).

Meanwhile, US cash has also landed on the Australian Stock Exchange. One recipient is Syrah Resources (AU:SYR), which is making it back to its market capitalisation highs of 2018. The graphite miner has been talking about a US plant for years, and being handed $219mn will put a spring in any company's step. “Syrah’s Vidalia facility will be the only vertically integrated and large-scale natural graphite AAM producer outside China and the first large-scale natural graphite AAM producer in the US,” the Department of Energy said last week.

While graphite has different market dynamics than lithium, this award shows how canny operators have moved into the US space. Another ASX company is also looking for US investor cash. It does not have a link to the automotive industry, but does have a project in the heart of Europe. It's even called European Lithium (AU:EUR).

Earlier this month, the company announced it would add a US listing, and the Wall Street Journal floated a potential valuation of almost $1bn (£880mn). This would be an extreme valuation for a company with a current market capitalisation of £70mn. It has the rights to an old underground mine in Austria, by any definition not a world-changing amount of lithium. The listing plan is to use a repurposed special purpose acquisition company (Spac) shell, so this may still crash and burn. But the IPO value being touted is quite a figure for a company that might only produce a handful of lithium in global terms.

One conclusion from this cash rushing in from the US government is that any company with that exposure is worth investing in. We would take a more nuanced approach, noting that untested technologies and court battles over permitting are potential red flags for producers. That said, if the EU steps in and starts handing out similar levels of cash, those piling into anything lithium stocks would likely catch some upside.

[regandharry5] 28/10/2022 09:31

No mention of Zinwald. Pity.

[sev22] 27/10/2022 20:05

This is the article from the FT:

Lithium miner to create US-listed company as shortages hit electric cars.

Australia-listed European Lithium will merge with Sizzle Acquisition.



A lithium mining start-up is to create a US-listed company in a blank-cheque merger as a severe shortage of the metal has become the most serious supply chain bottleneck in the rollout of electric vehicles.

European Lithium, which claims to have the region’s first fully licensed lithium mine with deposits in Austria, is to merge with Sizzle Acquisition, a special purpose acquisition company, to create Critical Metal.

European Lithium, which is already listed in Australia and will continue to trade there, will become the largest shareholder in Critical Metals, which will have a market capitalisation of $972mn.

Other companies have struggled to get permits to mine the metal in Europe, partly because of environmental concerns.

Europe’s setbacks in developing lithium supplies have left it largely reliant on China, which could pose problems for the region’s carmakers as they rush to secure local battery materials. China controls 60 per cent of global lithium processing.

The deal comes during a severe shortage of the metal with prices plateauing close to record highs of $70,000 a tonne, eight times their level at the start of 2021.

This followed electric vehicle sales in China powering ahead this year with the supply of the metal struggling to keep pace.

The problems over winning permits have held back lithium mining in Europe.

Rio Tinto’s Jadar project in Serbia had its exploration licences revoked, while Savannah Resources has yet to get environmental approval for a lithium development from authorities in Portugal.

Lithium is a vital element in electric vehicle batteries because it is lightweight, with demand expected to multiply several times over the next decade as the EV industry takes off.

“The need for additional battery-grade lithium in Europe will only continue to accelerate as demand for EVs continues to outstrip supply,” said Critical Metals’ executive chair Tony Sage.

The Wolfsberg site, located 270km south of Vienna, is expected to produce about 10,500 tonnes of lithium concentrate a year starting in 2025 — enough for 200,000 EVs. Lithium concentrate has to then be refined into chemicals that can be used in EV batteries.

The high lithium prices have been spurring a wave of activity to raise capital to develop mines. On Monday, mining solutions group Imerys said it was launching a lithium project in France that aims to produce 34,000 tonnes of lithium hydroxide a year from 2028.

European Lithium holds a memorandum of understanding with Germany’s BMW to pre-pay $15mn in return for lithium in the future. General Motors, Ford and Stellantis have taken the rare step of pre-financing mines and taking equity stakes in early-stage mining groups.

[steeplejack] 27/10/2022 06:00

Meanwhile,Atlantic Lithium will be producing lithium by the third quarter of 2024 and estimate a payback of just twenty weeks.Sadly,Zinnwald look pedestrian by comparison.

[steeplejack] 24/10/2022 10:02

https://wp-zinnwald-lithium-2020.s3.eu-west-2.amazonaws.com/media/2022/09/20220913-Zinnwald-Investor-Presentation-.pdfGo to page 16 of the presentation and production isn't projected until 2026....late third quarter 2026.

[robert bane] 21/10/2022 17:31

Don't post this rubbish here:(

[steeplejack] 21/10/2022 16:26

2026 at the earliest.....that's why the price is drifting.

[regandharry5] 21/10/2022 12:37

Any clue to when we can expect some lithium actually mined.

[robert bane] 13/10/2022 18:11

Nice to have a post to read :) Could have been even better if US market hadn't dipped so badly before surging on CPI data. Surge too late to pull Euro stocks up quickly enough, as often seems to be the case :(
A reversal on some of mini budget should help accompanied by a couple of sackings or resignations:)

[gepetto100] 13/10/2022 12:56

Nice to see some positive buying

[steeplejack] 28/9/2022 19:53

CEO, Anton du Plessis,didn't really say anything new.As ever,we're told that they have an attractive prospect which won't be in production for 4 years.Lot of time between cup and lip,especially in these uncertain times.

[bountyhunter] 16/9/2022 17:40

...absolutely, right place, right time, sluggish BoD, although they do seem to have stirred recently! It shouldn't take too much effort to drive this higher given sky high lithium prices. An updated NPV would help.

[sev22] 16/9/2022 17:09

Lithium Prices Soar To An All-Time High.



We just need to dig it out of the ground a lot quicker...

[bsg] 16/9/2022 10:05

damp squib

[richsawko] 16/9/2022 09:41

Well that Rise was a damp squid wasn't it!

[steeplejack] 15/9/2022 08:41

Jeremy Martin has done an excellent job at Horizonte over the years.The nickel producer is now less than two years from production.Hopefully,Zinnwald will follow the same dependable path employing what JM interestingly recognises as a relatively novel extraction technique in the field of lithium.Further placings?They have a cash balance of 5.4m euro currently so a fund raising doesn't look imminent.Moreover,looks like the historic Irish operations are up for sale which might provide monies in due course.The share price is clearly an irritant to the management as it explains that previous BCN holders were not 'natural' holders of Zinnwald and their selling pressured the price.I find that a bit disingenuous,a seller is a seller.

[bsg] 14/9/2022 10:42

I wonder if there's a placing coming and M&G are involved in it?

[mylands] 14/9/2022 10:37

The inflation figures from the States haven't done us any favours.

MM's marking the price down and dragging out sellers