Lithium Brines Play In Argentina Is Back - Toyota Tsusho Buys Into Olaroz Deposit With Orocobre ORL.to, ILC.v, RM.v

  

  CS. Lithium Brines Investment Play in Argentina is back and sold into the dust lithium junior miners are waiting to be picked up now. Despite all recent mumbling about the Electric Cars - as usual and as it has happened before - Toyota takes a very bold step to secure the supply of Lithium as strategic commodity for the next Industrial Revolution. Keep in mind always the big picture, what the real players are doing and not only what they are talking about here.

  Even if Toyota has announced recently that EVs are not being rolled out as fast as the most optimistic people involved, like us, have hoped, they did the same trick when first time bought a stake in Orocobre. They have announced that Lithium based technology is far from commercialisation at that time, ground the lithium juniors market and then bought a stake in Orocobre. Do not make any mistakes here - it is The Art Of War in its prime ongoing now in the fight to secure the supply of strategic commodities. Toyota has invested billions in Hybrid technology and is the most successful Hybrid maker - Prius Models are the largest number of sold Hybrids in the world by far now. And here is the twist - The New Plug In Prius is based on the Lithium battery, even if Toyota "does not believe in the mass market for pure EV now" - they know too well that Plug In is the next obvious step and you need a lot of Lithium for this transition from the early days battery technology. Plus do not forget about Toyota's stake in Tesla Motors and RAV4 EV powered by Tesla rolling out now.

Electric Charge: Tesla Model S by Translogic - This Is What Lithium Is For!

"This Is What Lithium Is For! Lithium allows you to make Electric Super Car - Tesla Model S is the best Electric Car on the market  now and Translogic with Bradley Hasemeyer are the best to cover it! This is the right Energy - both the car and report about it - supercharged, focused and No Compromise of being Green. Tesla Model S is the real car, but only better and now it can travel the distance with the unveiled network of Tesla Superchargers."

  Talking about The Art Of War - Chinese sometimes taking it quite literally and seriously - China has recently signed the agreement about military cooperation with Argentina, Chinese companies have received a green light to invest in resources in Argentina and plans are announced for the building Lithium Battery plants and Electric Busses in Argentina by BYD. By the way Warren Buffet is backing BYD with its Electric Dreams.

Lithium Rush: The Art Of War In The Markets: China Getting Ready For 5 Million Electric Cars by 2020

 

  

Lithium M&A: Who Will Be Next? Battery demand fuels Rockwood's Talison Lithium buy

Out of our favorite: International Lithium, Rodinia Lithium, Lithium One and Orocobre - Lithium One is taken out by the Galaxy already. Orocobre could become the consolidator in this junior development space and International Lithium and Rodinia Lithium could become the forgotten darlings for M&A dreams. Rodinia Lithium is more advanced with resource estimation, small stake from Shan Shan and recent creative financing of its Potash side of story. International Lithium enjoys increased stake of its strategic partner - Ganfeng Lithium, has found the highest in Argentina Potash grade on its Mariana Lithium-Potash Brine and announced financing and J/V LOI on its Ireland Lithium project. Talison buyout brings new angle on Lithium hard rock mining and can create the new opportunities for International Lithium with its projects in Ireland and Canada.

  As we have written above, quite a few Chinese companies are involved in Argentina already and have secured their stakes in the upcoming Lithium developers. Rodinia Lithium has being waking up lately with some bids coming in and International Lithium should announce its plans about the development of Mariana Lithium Brine in Argentina, once the recently announced deals with Chinese Ganfeng Lithium will be finalised.

  This bold move by Toyota will put all serious lithium brine developers in Argentina on the investors' radar screens again. Country risk, which was driving all the prices down with the general Risk Off trade in the junior miners this summer will be reassessed. Investment space here is really tiny, number of credible names with the real assets and with serious backing is even less - any catalyst on the company level can ignite the next leg up in this Generational Bull Market.

TOYOTA TSUSHO COPORATION ANNOUNCES POSITIVE INVESTMENT DECISION FOR OLAROZ LITHIUM PROJECT

Mining.com:

Toyota tries on the mining helmet: buys lithium deposit in Argentina

Cecilia Jamasmie | September 29, 2012

While China threatens Japan with supply limitations of rare earths, Japanese companies are actively seeking to grow their own exposures in rare metals and lithium, which will become an important part of the electric car manufacturing process.

"

Toyota (NYSE:TM), one of the leading automakers in the world, bought this week a 25% stake in Salar de Olaroz lithium and potassium project in Argentina to ensure supply for it growing electric cars division. This is the first time a Japanese company gets involved in large-scale mining of the white element, key for producing batteries that fuel electric vehicles.

The Japanese carmaker’s move doesn’t come as a surprise. Through its subsidiary Toyota Tsusho, it has long been looking to secure a stable supply of lithium for car batteries. Japan's demand for the so-called white gold is around 17,000 tons a year — enough to supply batteries for an average of 550,000 vehicles. This means that Salar de Olaroz would cover a large part of Toyota’s requirements for at least 15 years.

The mine, which has an estimated life of 40 years and very low cost as one of its main advantages, will also produce about 10,000 tons of potassium.

Australian Orocobre (ASX: ORE, TSX: ORL), which owns the Salar de Olaroz deposit, said it retained 66.5% of ownership, while the Jujuy provincial Energy and Mining Society of the State (JEMSE) owns the remaining 8.5%. The state-run Japan Oil, Gas and Metals National Corporation has guaranteed $200 million to develop the project thanks to a low rate interest loan by Mizuho Corporate Bank.

Negotiations will be closed in two weeks and construction is expected to start as soon as possible, with the objective of commencing commercial operations in 2014.

The mine will produce 17,500 tons per year, said Orocobre in a statement. That amount exceeds the originally estimated 16,400 tonnes.

Orocobre seems to have reached a good position in the rising market of lithium and rare earths. It recently acquired another project in Argentina from Rio Tinto (Lon, NYSE:RIO) that adds exposure to boron minerals and complements its existing lithium properties.

The miner expects to produce around 17,500 tonnes of lithium carbonate a year, which is an increase on its initial 16,400 feasibility estimate.

Other than in batteries for hybrid and electric cars, lithium is used in a variety of high tech devices such as tablets, notebooks, digital cameras and cell phones. The price for this commodity is expected to reach $6,100 in the coming years, with demand growing 6% annually.

Image: Takeshi Uchiyamada, Toyota's research chief, shows the company's upcoming all-electric city car. Courtesy of Toyota."

Please, do not forget, that we own stocks we are writing about and have position in these companies. We are not providing any investment advise on this blog and there is no solicitation to buy or sell any particular company

Lithium and Potash Brine production from Salars in South America

  

Extensive High-Grade Potash Discovery at International Lithium's Mariana Brine Project ILC.v, TNR.v

"Vancouver B.C.: International Lithium Corp. ("ILC" or the "Company") is very pleased to announce the discovery, through drilling, of the extensive distribution of high grade potash at its 100% owned, Mariana brine project located at Salar de Llullaillaco in the province of Salta, northwestern Argentina. The results demonstrate significant, consistent grades of potassium, with strong lithium and boron upside potential, remaining open at depth, in all four holes drilled.

Key Highlights:

• The highest grades of potash reported in an Argentine Salar;
• High potash values continue from surface to bottom in all holes;
• Potash, lithium and boron grades are open at depth.
"We are very encouraged with the results from the Phase 1 resource delineation drilling at Mariana that confirmed our belief in the potential of this multi-commodity potash-lithium-boron brine project. The observed extent of high grade potash brine encountered provides ILC the support and confidence to continue to advance our plans towards development. The objective for the next stage of exploration is to complete the remaining 10 to 12 holes needed for delineation drilling in conjunction with hydrogeological testing required to produce a reportable resource. Drilling will be designed to test structures that may control higher grade potash, lithium or boron zones" states Kirill Klip, President of the Company."

  It is time for us to look more closely at the Lithium and Potash brine production from Salars in South America. We will put together some initial information for your personal entertainment. Rick Mills will be the very good start. He is one of the pioneers covering strategic commodities: Lithium, REE, Graphite and Potash.

Brine Mining the Puna for Potash and Lithium.

Lithium ABC

Potash And Agriculture Investments: Potassium Fertiliser Production and Technology

Good overview of the world wide 58 million tons and 30 billion dollars in sales Potash market from Potash Corp.

Goldman Sachs Sixteenth Annual Global Agriculture Biotech Forum

Our five primary global markets — China, India, other Asia, Latin America and North America — combine to account for nearly three-quarters of the world’s population and roughly 80 percent of total fertilizer consumption.

Most of the growth in the fertilizer industry is occurring in these markets, with the exception of the more agriculturally-advanced North American market where sales are historically more stable. Consumption has increased by 83 percent in China, India, other Asia and Latin America over the past 20 years, closely matching food production trends in that time.

Market fast facts

China

• Population 1.4 billion
• Uses more fertilizer than any country accounting for 30 percent of world consumption
• Per capita renewable water resources are well below global average levels
• Has an increasing urban population with a rising standard of living
• Domestic consumption of meat has risen nearly seven-fold in 30 years, while fruit and vegetable consumption is nearly 10 times what it was 30 years ago
• Government has targeted improved agricultural productivity by modernizing equipment and practices, increasing farmer subsidies, allowing transfer of land-use rights, and raising minimum prices for key commodities
• Imports approximately 80 percent of its soybean requirements, a factor driving growth in Brazil and US production
• Limited domestic potash production capability — historically 75 percent of potash is imported

Top

India

• Population 1.2 billion
• 18 percent of world population but only 11 percent of its arable land
• Second largest fertilizer consuming country with around 16 percent of world use
• Annual fertilizer consumption growth of 4.8 percent this decade
• Government heavily subsidizes fertilizer for farmers to stimulate yield improvements
• Yields typically 20-50 percent of those on equivalent US cropland
• Government has set an agricultural sector growth target of 4 percent per year until at least 2012
• Per capita renewable water resources are well below global average levels and farmers are heavily reliant on seasonal monsoon rains to support crop production
• Has no indigenous potash
• Very poor nutrient balances in India’s soils, insufficient potash applied relative to nitrogen and phosphate, and more than 70 percent of soils have low to medium potassium content

Top

Other Asia (excluding China and India)

• Population 1.6 billion (combined)
• Account for approximately 12 percent of world fertilizer consumption
• World’s leading producer of oil palm, rubber and a major producer of rice
• Abundant water resources but limited per capita arable land
• Indonesia and Malaysia have more than doubled palm oil production in 10 years
• Has no indigenous potash

Top

Latin America

• Population 596 million
• Account for approximately 12 percent of world fertilizer consumption
• Abundant land, water and labor make it an agricultural superpower
• Produces about 60 percent of global coffee supply and approximately half of the world's soybeans and sugar
• Corn is also grown for export and to feed domestic livestock industry
• Soils in Brazil are naturally deficient in potassium and require potash to remain productive
• Limited domestic potash production capability — approximately 80 percent of potash is imported

Top

North America (US and Canada)

• Population 347 million (combined)
• Account for approximately 14 percent of world fertilizer consumption
• Major suppliers of food and fiber
• US accounts for about more than one-third total global trade in wheat, corn, soybeans and cotton
• Both countries are among the world’s most efficient agricultural producers
• Rising global food demand and domestic biofuel mandates have created competition for limited farmland

  SQM is one of the Big Four in Lithium production and the largest producer of Lithium and Potash from brines in the world.

"CITI   SQM - Soc. Quimica y Minera de Chile (SQM)

Potash Fundamentals Remain Attractive LT — With grain prices showing solid gains YTD (soybeans +13%, corn +4%), 2012 is expected to be the 2nd most profitable year for farmers (after 2011) – positive for fertilizer application as farmers look to maximize yields. While potash demand experienced a slowdown in 2H11, increased supply discipline in 1Q12 has begun to balance the market. Evidence of better potash fundamentals should arise from current Chinese contract negotiations (no settlement reached yet), which will provide a floor and certainty to buyers in Asia, Brazil and India."

SQM Corporate presentation.

  FMC is another one from Big Four Lithium producers - producers Lithium and Potash from Hombre Muerto in Argentina.

FMC Corporate presentation.

Please, do not forget, that we own stocks we are writing about and have position in these companies. We are not providing any investment advise on this blog and there is no solicitation to buy or sell any particular company here. Always consult with your qualified financial adviser before making any investment decisions.

Lithium developers we are following here.

  Chinese Ganfeng Lithium - strategic partner with ILC - owns 15% of the company now, results were just released from its Phase 1 resource delineation drilling program at Mariana salar in Argentina.

International Lithium Corporate presentation.

  Chinese Shanshan is among the investors in Rodinia Lithium.

Rodinia Lithium Corporate presentation.

  Lithium One is being bought out by Galaxy Resources now. 

Consolidation Potential for Lithium Juniors GXY.ax, LI.v, ILC.v, ORE.ax, RM.v

Lithium One Corporate presentation.

  Japanese Toyota Tsusho is strategic investor in Orocobre.

Orocobre Corporate presentation.

Li is for Life: Lithium Brine Economics - Lithium and Potash tnr.v, czx.v, lmr.v, rm.v, alk.ax, sqm, fmc, roc, lit, li.v, wlc.v, clq.v, res.v, ree, avl.to, nsany, f, gm, rno.pa, dai, byddf, hev, aone, vlnc

Argentina & Mining 101:

Monday, January 31, 2011

Lithium & Potash which is more important in a brine? SQM Lithium breakdown

It seems like there is a phase of acquisition again in the market. 

It's no coincidence that many of the projects in Argentina have been snapped up - most of which are public companies.

International Lithium's core asset - the Mariana lithium brine, according to their presentation seems a negligible distance away from the largest lithium producer in the world.

The Atacama. (NYSE: SQM)

What makes this project so attractive is it's production capability of both lithium & potash.

YES Potash - that elusive fertilizer component which is increasingly sought-after because of the primal need of people - food.

Research all point to less and less arable (land that can grow crops) land, despite growing population size.

Basically - either we all eat less, or we have to find ways to grow more with less land.

Enter the modern fertilizer. The recent BHP Billiton attempted acquisition of Potash Corp is in line with the same expectation, that more mouths to feed = more food needed.

Though most people in the lithium sector think of SQM as a major lithium producer - bulk of their revenue actually comes from potash and plant nutritions.

Taken directly from SQM website for earnings year to date (YTD)http://www.sqm.com/pdf/Investors/PressReleases/en/SQM-PR_20101123-EN_0237.pdf

To make it easier for you - I've summarized it in a pie chart for you. Less than 10% of SQM's revenues come from lithium.

I'll say it again - less than 10%.

While the margins are far higher than their other lines of business - their main focus is on chemical products based around Potassium.

Santiago, Chile, November 23, 2010.-Sociedad Química y Minera de Chile S.A. (SQM) (NYSE: SQM; Santiago Stock Exchange: SQM-B, SQM-A) Revenues totaled US$1,324.7 million for the first nine months, representing an increase of 25.9% over the US$1,052.2 million reported in the same period of 2009.

Segment Analysis

Specialty Plant Nutrition (SPN)

Revenues from our SPN business line for the first nine months of 2010 totaled US$452.5 million, 13.0% higher than the US$400.3 million recorded for the same period in 2009.

Iodine and Derivatives

Revenues from sales of iodine and derivatives during the first nine months of 2010 totaled US$241.8 million, an increase of 72.4% with respect to the US$140.3 million reported for the first nine months of 2009.

Lithium and Derivatives

Revenues for lithium and derivatives totaled US$114.3 million during the first nine months of 2010, an increase of 35.4% with respect to the US$84.4 million recorded for the first nine months of 2009.

Industrial Chemicals

Industrial Chemicals revenues for the first nine months of 2010 reached US$109.5 million, 35.3% higher than the US$80.9 million recorded for the same period of the previous year.

Potassium Chloride & Potassium Sulfate (MOP & SOP)

Potassium Chloride and Potassium Sulfate revenues for the first nine months of 2010 totaled US$356.8 million, a 24.3% increase with respect to the first nine months of 2009, when revenues amounted to US$287.1 million

Other Commodity Fertilizers

Revenues from sales of other commodity fertilizers and other income reached US$49.8 million in the first nine months of the year, down from US$59.1 million for the same period of the previous year.

Salar brines are located in the nucleus of the Salar de Atacama. They contain the greatest lithium and potassium concentrations ever known, in addition to considerable sulphate and boron concentrations. From this natural resource lithium carbonate, potassium chloride, potassium sulphate, boric acid and magnesium chloride are produced.

The Salar de Atacama is a source of underground salar brines, formed through natural leaching from the Andes Mountains: throughout time, diverse minerals found under the salt surface crust have descended from the mountains, accumulating in increasing concentrations.

Together with high concentrations of salar brines, the Salar de Atacama has a series of advantages: it enables low processing costs due to its reduced magnesium content; it has higher evaporation rates than other salt plains in the world and it is able to operate all year long due to the privileged weather conditions that favour it.

Process

Salar brines are pumped from beneath the saline crust in two different areas of the salar. In one of them, extracted salar brines contain unprecedented concentration levels of potassium and lithium. In the other, salar brines obtained contain high concentrations of sulphate and boron.

After extraction, salar brines are located in SQM's solar evaporation ponds that cover 1,700 hectares approximately. Atacama Desert is the driest place on earth, with a solar evaporation index of 3,200 millimetres and average precipitations of only 15 millimetres per year. This results in an extremely efficient previous process of solar energy concentration.

From the resulting solutions and after a series of processes, SQM produces potassium chloride, lithium carbonate, potassium sulphate, boric acid and magnesium chloride.

What makes ILC so attractive then?
One of the highest potash values outside of Atacama. That's what.
Given that SQM does most of their revenue on potash-potassium related chemicals - would you rather have higher Lithium or Potassium? FYI - most of the other lithium brines don't have nearly as potash.

We are long TNR and through that, ILC. Based on what we observe with SQM, this seems like a sound logic especially with ILC's fantastic potash values.

We have not verified the data presented in this article.

Please, do not forget, that we own stocks we are writing about and have position in these companies. We are not providing any investment advise on this blog and there is no solicitation to buy or sell any particular company here. Always consult with your qualified financial adviser before making any investment decisions.

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