lithium on **promotion blocked** news

http://www.kitco.com/reports/KitcoNews20100322A.html

Toronto (Kitco News) --The key element in the batteries that power cell phones, personal computers and other digital gadgets, lithium is now poised to take to the highways as more electric cars are developed, according to the president and CEO of Lithium One, Inc.

Patrick Highsmith said the growth in the use of lithium in personal digital equipment has been excellent, but said the next opportunity is in electric cars. Based in Vancouver, British Colombia, Lithium One, Inc is an explorer and developer of mineral properties with a specific focus on lithium.

In an interview with Kitco News at the recent PDAC2010 conference in Toronto, Highsmith said that in eight or nine years, hybrid cars will be converting through lithium batters into full electric cars. "Those vehicles will use kilograms of lithium per unit rather than the grams we carry around in our cell phones," said Highsmith. "It really has an exposure to the automotive sector."

Highsmith said the Nissan Leaf electric car is scheduled to be out in 2011 and others will follow.

"We just saw at the lithium supply conference in Las Vegas the broad endorsement across the industry. by Ford Hyundai, Toyota, GM, and Audi and Mercedes in Europe that their electric cars will be based on a lithium platform," said Highsmith.

Lithium prices have increased sharply from the $800 a tonne for lithium carbonate in the early 1990s when the brine operations first started in Argentina and Chile , the two countries that produce about 70 per cent of lithium supply. "Before the crash in 2008, it had peaked at $6,000 a tonne," he said. "We had a bit of a fall back with the rest of the economy but at over $5,000 it is still a high-valued commodity for battery grade lithium carbonate."

Highsmith said the serious industry players don't need a spike to a crazy $12,000 a tonne level but a sustained market price. He said the auto sector is forecasting a long-term price in the range of $5,500 a tonne. "We don t need it to go to $10,000 to $12,000 to stimulate a viable business," Highsmith said. "For the projects such as Lithium One is pursuing, a nice stable price of $5,000 to $6,000 would make a very profitable operation."

Only about 120,000 tonnes of liquid carbonate is traded per year, Highsmith said.

Production continues to be at the top of the list for companies dealing with lithium. "The biggest challenge is getting a project that can go all the way to economic battery grade lithium which commands a high price but the specifications are quite strict for those products," said Highsmith.

Although there are conflicting views about how much economically-recoverable lithium is available, rising prices and the prospects of usage in electric cars has piqued interest.

Lithium One has two major lithium projects: the brownfields Sal de Vida lithium brine project in Argentina and the James Bay bulk tonnage spodumene project in Quebec.

Highsmith said with rising prices said there is renewed interest in the hard rock supplies such as the project his company has in Quebec. The project is near surface and open-pittable, he said. "That's a hard rock lithium asset. It is different kind of mining but gets to a very pure product suitable to batteries," he said. "Canada has historically had those type of pegmatite deposits but the brine operations sort put them out of business. But with the surge and again and the rise in price. the very best of those assets are likely to be economic again."