Sunday, June 13, 2010

Argentina & Mining 101: The Asian Rush for Lithium TNR.v,, LI.v, RM.v, LMR.v, WLC.v, CLQ.v, LAT.v, LIT.v, F, GM, NSANY, BYDDY, GOOG, AAPL, RIMM

"The world’s future energy course is being charted today because of the ramifications of peak oil and a need to reduce our carbon footprints. A whole new industry - a global wide automotive and industrial lithium-ion battery industry - is going to be built. As a result of lithium-ion battery demand for hybrid-electric and electric cars the increase in demand for lithium carbonate is expected to increase four-fold by 2017.Lithium-ion batteries have become the rechargeable battery of choice in cell phones, computers, hybrid-electric cars and electric cars. Chrysler, Dodge, Ford, GM, Mercedes-Benz, Mitsubishi, Nissan, Saturn, Tesla and Toyota have all announced plans to build lithium-ion battery powered cars. Demand for lithium powered vehicles is expected to increase fivefold by 2012. The worldwide market for lithium batteries is estimated at over $4 billion per year."

There is an interesting write up on recent deals with Asian Trading Houses involved from our fellow bloggers at Argentina & Mining below. RCR's research on TNR Gold makes its round in investment community and we have found this information from Stockhouse interesting:

CBS News Report on Lithium 2010 - Visit to Chile, Argentina, Bolivia

We have a position in this company, please, do not consider anything as an investment advise, as usual, on this blog.

Thursday, June 10, 2010
The Asian Rush for Lithium - TNR.v, Li.v, SQM, FMC, GXY.asx, ORE.asx, LMR.v
What's happened in recent months is very obvious.

The offsetting investment strategy when your country's currency becomes higher valued against other currencies around the world - is to make investments overseas.

The logic is simple especially when compounded on the fact that many of these countries have very little local resource. Japan, Korea, even China (despite local pegmatite lithium production - more is always needed).

Prediction: More joint-ventures and acquisitions.

Here's an overlay of recent acquired/JV'd companies return year to date (YTD). Investors would do very well to invest now in companies with good lithium brine assets.

Out of the graphed juniors - we are anticipating some interesting deals from TNR Gold Corp and junior lithium developer International Lithium Corp once their portfolio is more developed.

It's no coincidence - some of the biggest JV's so far have been based in Argentina (South America) where 70% of the world's lithium carbonates is being produced every year.

Why re-invent the wheel? Here at Mining101 we would not be surprised at all if we see more deal in the lithium space in the coming months.

Past JV Announcements:
1) Orocobre - Toyota Tsusho JV.
BRISBANE, Australia, Jan. 19 /PRNewswire-FirstCall/ -- Orocobre Limited (ASX: ORE) , "Orocobre") today announced that it has reached agreement to establish a joint venture with Toyota Group Company, Toyota Tsusho Corporation ("Toyota Tsusho"), to develop its flagship Salar de Olaroz Lithium-Potash Project (the "Project") in Argentina.

The agreement sets out the terms under which the parties will develop the Salar de Olaroz project. In the current feasibility study phase, Toyota Tsusho will provide US$ 4.5million to fund the completion of the Definitive Feasibility Study and other associated pre-development activities. This is expected to be completed in the third quarter of 2010.

Subject to the finalisation of the terms of a joint venture operating agreement on completion of the Definitive Feasibility Study, Toyota Tsusho will acquire a 25 percent equity interest in the joint venture at a cost based on the NPV estimated from the Definitive Feasibility Study.

2) Lithium One - Korea Resources Corp (KORES)

Canadian exploration company Lithium One Inc. said yesterday it has signed a joint-venture agreement with South Korea's state-owned mining company, Kores, to partner on the development of the Sal de Vida Lithium Brine Project in Argentina. Kores has the option to earn a 30% interest in the project by funding and delivering a definitive feasibility study within a period of about 15 months. Vancouver-based Lithium One said Kores will provide full funding up to a limit of US$15-million. The two companies will form a joint venture through an Argentine company, following the delivery of a definitive feasibility study. They also plan to enter to a marketing agreement, whereby Kores may market lithium products produced from the project to China, Japan and Korea, while Lithium One will market potash products from the project worldwide.

Read more:
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3) Galaxy Minerals - Mitsubishi Motor Corp (MITSUB)

Galaxy Resources Ltd has signed agreements to sell its battery grade lithium carbonate product to 13 major Chinese lithium cathode producers.

The offtake agreements, when added to a previous sales agreement with Mitsubishi Corporation, mean Galaxy's total output of 17,000 tonnes of lithium carbonate per year is committed, the Perth-based company said on Monday.

The terms of the deal were not disclosed.

Galaxy managing director Iggy Tan said the agreements "locked in the future growth potential of the Chinese and Japanese battery grade lithium carbonate market for the next five years".

"Almost all of the lithium cathode producers Galaxy has engaged with are significantly increasing capacity in the coming 12 to 24 months," Mr Tan said in a statement.

"By signing up for our product, these foundation customers are acknowledging the strength of the Galaxy project, particularly as it provides security of supply for battery grade lithium carbonate needed to underpin their expansion plans."

Supply will begin in 2011, the company said."
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