Forbes Ukraine has released a new magazine number. You can buy it with free shipping by this link. In the magazine: a list of 250 small and medium-sized companies, the leadership of General Involving, the fall of billionaire Zhevago, the detailed history of Dnipro-M and a total of almost two dozen texts.
European Lithium – an Australian company whose shares are listed on the Australian and Frankfurt stock exchanges. Since 2012, the company has been developing a lithium deposit and building an enrichment factory in Austria. European Lithium has also agreed to build a processing plant in Saudi Arabia. The main customer of the company – BMW Automobile Corporation.
In Ukraine the company claims the lithium deposit «plot Good» in the Kirovohrad region. The true right to develop it is challenged in Ukrainian courts.
In recent years, Millstone&Co company Mikhail Zhernov has been fighting for the right to develop the Dobra site in the courts. In 2021, Millstone&Co agreed to repurchase European Lithium shares for €25 million ( up to 3% of the company's shares ) by November 2025. Gernov, who joined the board of directors of European Lithium through the agreement, hopes that the Australian company will help defend the right to the Dobra site in Ukrainian courts.
In addition to lithium assets, Tony Sage owns the Australian professional football club «Perth Glory», a consulting company Okewood Pty Ltd, an investment company of Cape Lambert Resources Ltd.
Sage told Forbes what European Lithium expects in Ukraine and how long the lithium boom will last.
Interviews abbreviated and edited for clarity
Your European Lithium company may be one of the first lithium miners in Europe. At what stage is everything now?
We founded European Lithium in 2012. We are currently developing a single deposit in Austria that previously belonged to local authorities. They searched for other resources, and found lithium and built a mine. Authorities did not extract lithium: the price was low. In 2012, we acquired a deposit. It was at this time that lithium began to rise in price. As a result, we successfully entered the Australian and Frankfurt stock exchanges in 2016.
It's been going well for four or five years, but COVID-19 has forced us to move plans for two years from 2020 to 2022. But now we are going at top speed. We plan to go out with the Austrian field on NASDAQ.
After that, the main priority of the company will remain the Ukrainian deposit Dobra.
How much is the problem for you with judicial red tape around the Dobra site?
Our partners, Millstone&Co representatives, have been in touch with the courts all the time. They are 100% sure that we will have access to the deposit.
Currently, we are only interested in the Good area. The Shevchenkivsky deposit is too close to the front line. A few months ago, we re-signed an agreement with Millstone&Co to exclude the Shevchenko deposit from it.
In Ukraine, the company claims the lithium deposit « Dobra section» in the Kirovohrad region. Photo provided by the European Lithium press service
Tell us in more detail how you came to Ukraine?
We met Mikhail Zhernov and the Millstone&Co team in the early 2020s. They said they have a license to develop the Dobra site. Subsequently, we signed an agreement. The Covid19 pandemic has slightly thwarted our plans, but in 2022 everything was ready for work.
The military conflict between Russia and Ukraine has sharply thwarted all our plans.
We really want to start developing the Good site. It contains large deposits. Probably the largest in Europe. Now in Austria we are developing a deposit with deposits of 12.88 million tons of lithium ore. The Dobra site, according to the 1980s and 1990s, contains 19 million tons of ore, or almost 50% more.
When we start developing the site, we will need to drill a lot and test the ore. Because there is a lot of lithium ore in the world. But it is necessary to make sure that Ukrainian ore can be enriched for use in batteries. Your lithium may be unsuitable for batteries. In this case, it can be used except for the production of utensils.
Do you often visit Ukraine?
In 2004-2006, I started an oil and gas company Regal Petroleum. The company is still traded on the London Stock Exchange.
I've been to Kyiv before, I liked it. People liked it.
In general, my experience in Ukraine was positive. I'm sure we won't have any problems. I have worked in Africa, Romania, Kazakhstan, Tajikistan. I have a bunch of horrible stories about Africa: they often ask for money in the first step. And in Ukraine I only had to involve a lawyer in the project.
How much are you willing to invest in lithium mining in Ukraine?
$1 billion over four to five years.
What will this money go to?
In about 9-12 months, we will spend $15-20 million on drilling to confirm stocks.
Drilling was already carried out at the field in Soviet times. We will have to drill next to the existing squash. Geological work in Austria is complete, so my two geologists are waiting for new challenges. For drilling, we plan to invent a local company.
If we do this in 30% of the territory, we will be able to convert the results of Soviet research into a format that is recognized in the West.
After drilling, it will take us 4-5 months to see if the ore is suitable for battery production. Over the next six months, we will do Bankable Feasibility Study or feasibility study. So in two years we will be ready to build mines.
European Lithium – an Australian company whose shares are listed on the Australian and Frankfurt stock exchanges. Since 2012, the company has been developing a lithium deposit and building an enrichment factory in Austria. Photo provided by the European Lithium press service
In Ukraine, the company claims the lithium deposit « Dobra section» in the Kirovohrad region. Photo provided by the European Lithium press service
European Lithium has also agreed to build a processing plant in Saudi Arabia. The main customer of the company – BMW Automobile Corporation. Photo provided by the European Lithium press service
In Ukraine, the company claims the lithium deposit « Dobra section» in the Kirovohrad region. Photo provided by the European Lithium press service
Are you ready to build an enrichment factory and a processing plant in Ukraine?
Yes, we need two factories. The enriching factory should be next to the mine. It should increase the proportion of lithium oxide in ore from 1.36% to 6%.
A lithium hydroxide plant from which batteries are made is also needed. Electricity is of great importance for this production. We will investigate whether there is enough generation in the Kirovohrad region and how much electricity costs compared to other countries. If the conditions are favorable – we will build a plant in Ukraine.
If not – we will export enriched ore, concentrate.
Why don't foreign companies still mine lithium in Ukraine?
Now the main reason is – security risks.
I have worked a lot in Africa – in countries such as Sierra Leone, Mali, Ghana, the Democratic Republic of the Congo, Zambia. Two years ago I had a deposit in the African country of Mali. Representatives of the radical Islamist group «Boko Haram» began killing everyone around. These are some of the most dangerous terrorists in the world. They enter villages and turn children into soldiers.
From what I see and read – Putin's troops in Ukraine are committing war crimes, Russian soldiers are unpredictable. Therefore, the solution for Western companies – simply do not send specialists to the danger zone.
In your words, the only problem is – war.
So. This is the – only problem.
Now no one wants to spend money in Ukraine, because anything positive for Ukraine can destroy a rocket. Obviously, Russia does not want Ukraine to exist and prosper. Imagine we are now saying that we are starting to build a factory. One day Russia will destroy it. No one wants to take this risk.
It is a great risk for me to send people to a danger zone. If, in a primer, an accident occurs in one of our mines – I will be personally responsible.
Plus, many professionals now do not want to go to work in Ukraine because of the war. And we need international companies for many works that provide drilling services, engineers, metallurgists, and so on.
Not only we but also other companies face this, it's a big problem. It is a pity that everything is so, because Ukraine has many opportunities for investment.
In 2021, European Lithium signed an agreement with Ukrainian Millstone&Co, which intended to develop the Dobra site, but was never able to obtain a license. The deal is non-standard: for several years Millstone has to buy back shares of European Lithium for about €25 million by November 2025. Photo provided by the European Lithium press service
What is Ukraine interesting for investors?
The war will not last forever. And Ukraine already has partners to help rebuild – it's the UK, USA, Germany, France and so on. Billions will be invested in Ukraine.
Completing the war will be a great opportunity for us to invest in Ukraine. Ukraine has a bunch of opportunities – you have full minerals, you can feed half the planet.
How long will lithium have demand?
A lot of time. The United States has spent about $200 billion on the development of lithium-ion batteries. Technology is getting better. By 2035, the number of batteries sold in the world should increase tenfold – to 10 million per year. The only thing that can stop the lithium boom – is a radical change in EU policy.
Lithium deficiency is projected to last until 2038. Therefore, many mines are now opening in Brazil, Chile, Argentina and Australia.
We are sure that the war in Ukraine will not last until 2038.
