China commitment to electric cars gives lithium miners a jolt...

China commitment to electric cars gives lithium miners a jolt

• 12:00AM September 13, 2017

China’s commitment to move entirely to electric vehicles has put another rocket under Australia’s already booming lithium sector.
Stocks such as lithium miners Galaxy Resources (up 11.8 per cent) and Neometals (up 12.7 per cent) as well as development plays Kidman Resources (up 8.5 per cent) and Altura Mining (up 7.9 per cent) all surged yesterday, in some cases to their highest levels in at least a year, as investors pounced on the latest positive catalyst for the sector.
China’s Industry and Information Technology Vice-Minister Xin Guobin at the weekend announced that the country would set a deadline for carmakers to stop selling vehicles that run solely on petrol or diesel as part of the nation’s efforts to tackle its pollution problems.
There was no time frame put on the ban but the prospect of one of the world’s biggest and fastest-growing car markets switching to electric vehicles has obvious benefits for the lithium sector.
Britain and France have pledged to ban petrol and diesel cars by 2040.
Car manufacturers themselves are also positioning themselves for the change. Mercedes-Benz has committed to offer electric or hybrid versions of its cars by 2022 and Volvo has pledged to go fully electric by 2019.
Perth-based Kidman yesterday confirmed it had formally executed its $US110m ($136m) joint venture over the Mt Holland lithium project in WA with international lithium heavyweight SQM, and Kidman managing director Martin Donohue told The Australian the news from China had helped create a lot of additional interest in the company.
“It’s really pleasing for us at Kidman because this business model we’ve chosen to put in place in partnership with SQM is really focused towards the electric vehicle market,” Mr Donohue said.
Unlike most of the Australian lithium plays, which produce a concentrate that is then exported to China for conversion into battery materials, Kidman and SQM have committed to developing a refinery in WA that will process Mt Holland’s concentrate into products for the battery market.
Mr Donohue said the comments from China showed it was a matter of when, not if, electric vehicle demand for lithium would soar even higher.
“Seeing what’s happening in the EV space, I think that’s going to stand us in very good stead for the next few years and beyond,” he said. “As opposed to just mining spodumene and shipping a concentrate to China, it’s the EV market where the demand is coming from and we feel like we’re perfectly positioned to capitalise on it now.”
Kidman’s day was made even better when it was awarded costs on an indemnity basis from its recent legal fight with Marindi Minerals. Marindi’s attempts to win control of Mt Holland through the courts failed earlier this year and the junior will now be on the hook for much of the costs Kidman incurred in fighting the case.
Altura, meanwhile, confirmed it had met the conditions required for it to begin drawing down its $US110 million ($136m) debt facility as it continues to push its Pilgangoora lithium project.
Altura said it had started stockpiling ore from the Pilgangoora pit, which sits just south of the Pilbara Minerals project of the same name, and was expected to be in production in about six months.

http://www.theaustralian.com.au/bus...t/news-story/22246420870600c56241fa6328c50a11