Monday, June 14, 2010

Lithium Rush: Japan invests in lithium TNR.v, CZX.v, RM.v, LI.v, LMR.v, WLC.v, CLQ.v, SQM, FMC, ROC, GDX, SLV, FCX, BHP, RTP, HEV, AONE, GOOG, APPL, F

"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."

"Race for Strategic Materials is on and U.S. is not in the front seats now: China controls 97% of REE market and lithium mostly produced in Chile, Argentina and Australia at the moment. Bolivia - named the Saudi Arabia of lithium by some, has its own mind about its vast undeveloped resources of lithium. Japanese companies are buying into Canadian and Australian junior mining companies to secure lithium supply and Chinese are very active in Australia. When U.S. will look at domestic lithium development in Nevada? Government sponsored enterprise in U.S. Strategic Metals Development Corp. like a Japanese JOGMEC can do the trick and finance juniors like International Lithium, Western Lithium and Rodinia Minerals on J/V basis: otherwise it will be 80s with Japanese Fever all over again. This time Japanese conglomerates will control not only movie studious, but something little bit more essential in the time of peak oil - lithium supply for the Electric Mobility Revolution. Recent deal in Nevada by JOGMEC with Lomico Metals is the first step in that direction, properties are still under DD review, but appetite to be engage in lithium exploration and development in Nevada by Japanese is there. Who will be gone next? When GM, Ford, GE, Dow, Rio Tinto, Boeing and DOE will wake up?"

We will be out of our non-profit education exercise on this blog very soon. At least for some people there is no need to connect the dots between Peak Oil, Electric Cars and crucial element to built around the next technological shift in our society: Lithium Rush continues. After news from Argentina about the deal between Korean Kores and Lithium One we have another news about investment by JOGMEC in Nevada Lithium story with American Lithium. This story has a well sounded name and plenty of rumours around it. Whether there is anything else apart from name and various people brought into this game time will tell. As you remember, you can never find any investment advise on this blog, but in this case we will suggest even more extra caution: this move by JOGMEC gives some credibility to the company which is trading on OTC market in US - the last thing we would touch in Junior Market with its very loose reporting standards; and earlier there were quite a few postings on the WEB about people involved with this company. Corporate story is also not so straightforward: Judy Baker - former CEO of Canada Lithium CLQ.v abruptly departed from the company without any explanation last year and then resurrected at American Lithium with a President title for one month and after that was reduced to the Project Manager title? In any case, your own DD will be the best answer to any uncertainty with a particular company. In all other aspects this move by Japanese conglomerate is a very significant step to raise the profile of Nevada on the Lithium radar screen. JOGMEC will be able to separate all stories from the property potential and results will speak for themselves later. Earlier this year JOGMEC made another lithium deal in Nevada with Lomico Metals LMR.v, but dropped it later after DD stage.

On our radar screen in Nevada we have our usual members from the early movers into Lithium sector: International Lithium with TNR Gold TNR.v and Rodinia Minerals RM.v Asian hunger for Lithium will be translated into the new deals later this year and our focus is on Argentina and Nevada Lithium brines at the moment.

Today's news about Afghanistan as Saudi Arabia of Lithium reminds us about numerous penny stock sales letters from American Lithium claiming Nevada as Saudi Arabia of Lithium and Bolivia is always getting the same title from the journalists. We guess that it is the good news for the country and maybe in 20-30 years Afghanistan will be able to capitalise on this news. "Coalition" has now more juice to fight for freedom on another hand. We have never heard about brines in Afghanistan and will consider at the moment that the idea is about hard rock source of lithium there - it will be a very long way from this news to infrastructure building and mining development in torn apart by war country. For our investment outlook it is the same story as with Pakistan and Iran huge copper and zinc resources with a very high grade. They could be developed one day with capital ready to manage the risk, but it will never affect the market of those commodities before it. If anything this news will kill the last argument by Big Oil about potential shortage of Lithium in the future as excuse to transform our transportation to electric Mobility.

More relevant to the Lithium market development is time to market. It will be crucial as anything else and we can see now a very strong desire by Asian tigers to be engage with every meaningful Lithium property in a relatively stable political jurisdictions. Number of deals is growing by the day and reputable juniors with strong Lithium portfolios without strategic partners could be counted on one hand now.


Japan invests in lithium

Barry Critchley, Financial Post · Thursday, Jun. 10, 2010

American Lithium Minerals Inc., a U.S.-listed but Canadian-managed company, is expected to announce today it has signed a deal with Japan Oil, Gas and Metals Corp. to receive a US$4-million investment to help it develop its lithium project in Nevada.

Sources familiar with the transaction said the investment from the Japanese entity, whose mandate is to secure a stable supply of natural resources for the country, will be invested directly in exploration activities in the western part of Nevada. American Lithium is also keen on developing its boron resources at the same Borate Hills site, about five hours from Las Vegas and 32 kilometres from Chemetall Foote's lithium mine, the only one of its kind in North America.

The investment by the Japanese follows extensive due diligence including a site visit. The investment is in line with the company's plan, to "develop Borate Hills and its other lithium brine exploration projects through co-operation with international partners." On its website, the company said it plans a $4.5-million exploration and development program "aimed at completing an economic pre-feasibility study on the Borate Hills Project to advance the project to the feasibility stage." Rio Tinto has done some past work on the site, particularly for boron.

Lithium is in demand because of the continued growth in consumer electronics, particularly cellphones and laptop computers, the continued growth in demand for electronic/hybrid cars, and as a means of storing power. The expectation is for a fourfold increase to 400,000 tonnes a year over the next decade.

The investment by JOGMEC is at least the third in a lithium-related project so far this year. Last January, Lithium One Inc., a company listed on the TSX Venture Exchange, announced a deal with Korea Resources Corp. to develop the company's lithium brine project in Argentina. KORES will spend $15-million on exploration with the goal of delivering a feasibility study. In the same month, an affiliate of Toyota Motor Corp. signed a deal with Australia's Orocobre Ltd. to develop a mine in Argentina. The affiliate will spend $4.5-million for a feasibility study.

Closer to home, Magna International Inc. spent $10.5-million to acquire a stake in Lithium Americas Corp. Magna plans to invest at least $400-million in lithium-ion battery production over the next three years. It also has a partnership with Kokam Engineering, a South Korean battery maker. There are almost 20 lithium-focused companies listed on either the TSX or the TSX Venture.

American Lithium is something of a turnaround story. Last fall, it hired new management, in part to position itself to take advantage of the expected increase in lithium demand. Hugh Aird was named president and chief executive. Mr. Aird, a veteran of the financial world, recruited Judy Baker, former president of Canada Lithium Corp., as a consultant. Ms. Baker is a geologist who has also worked on Bay Street as both a banker and an analyst.

In time, Mr. Aird recruited new board members including Patrick Reid, former president of the Ontario Mining Association who is chairman; Chris Hobbs, a chartered accountant and co-founder of Pine Point Capital Advisors Inc., which provides financial advisory services to companies in the mining sector; William Deluce, president of Wicklow Consulting Inc., a diversified investment company with global interests in the aviation and mining sectors, and Tim Casgrain, a former senior executive at Brookfield Asset Management and the chairman of the Canadian Broadcasting Corp."
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