This is slightly out of date (2012), but comes from a respected academic journal. It's a review article, which means it takes in a large swath of existing research, condenses it and interprets it. It's cited 102 times, which is considerable, and thus has become a standard source for others. I've quoted what I think is relevant to the investor:
mce-anchor “Despite their large potential size, production of lithium from brine deposits faces significant challenges. It is not yet clear whether the large volumes of brine necessary to sustain production for long periods can be recovered from all types of reservoirs. Potential complications include the possibility that removal of large volumes of brine will result in dilution of remaining brine and that reaction between recharge waters and salt-bearing host rocks will cause degradation of reservoir and brine properties. Brine deposits might also have limited capacity to respond to changes in market conditions because lithium is actually a by-product or co-product along with other elements, especially potassium, magnesium, bromine and boron. In many cases, these other elements are produced in considerably larger amounts than lithium, even when considering a 10 to 20 times increase in production of lithium as demand grows (Gruber et al., 2011). Finally, the presence of these other elements, especially magnesium, complicates processing and recovery of lithium. These factors are of considerable importance to the lithium reserve issue in view of the fact that only two of the brine deposits in the top ten are currently producing; all others are in various stages of evaluation.
mce-anchor This suggests that pegmatites and other deposits will remain of interest and might even grow as sources of lithium. The size comparison in Fig. 14 indicates that about 10 economic pegmatite deposits would have to be found to equal one brine deposit [see below for criticism of this measurement]. In view of the wide distribution of near-surface lithium-bearing pegmatite provinces of all ages versus the very restricted distribution of active lithium-bearing brine systems, it is likely that this ratio reflects the relative abundances of pegmatite and brine deposits around the world. The distribution of modern lacustrine evaporite basins is largely a function of recent past climates and is relatively well known, making it unlikely that significant new lacustrine evaporite districts will be found. Pegmatites, on the other hand, are much more widespread in terms of both age and distribution of host rocks….
One positive outcome from this exploration is likely to be geographical diversification in lithium production that would counteract the geopolitically restricted distribution of brine deposits. From the standpoint of by-product metals, pegmatites might have greater flexibility to respond to changing market conditions because the most likely by-products, tin, tantalum, niobium and beryllium, have global market volumes similar to or significantly smaller than lithium demand estimated for the latter part of the 21st century (Gruber et al., 2011). Future production is also very likely to come from the unusual types of lithium deposits such as King Valley and Jadar. In addition to being large, they have relatively simple compositions that will free them from processing and by-product complications. These generous totals should not provide comfort to either geologists or consumers, however. Very few of the resource estimates are sufficiently well constrained to qualify as recoverable reserve; most known deposits are poorly explored and have no history of operation, and many new deposits remain to be discovered. Despite their large resource estimates, very few of the brine deposits have supplied large-scale, long-term production and each of these has faced different geological and production problems. Pegmatite deposits, although widespread, have not yet been shown to be amenable to the type of large-scale mining that will almost certainly be required. Even if all of the deposits that have been enumerated here were successfully converted to reserves, other challenges remain. Most obvious is the concentration of about 70% of global brine resources in just four countries, Argentina, Boliva, Chile and China. This level of resource concentration is exceptional and will undoubtedly stimulate efforts to widen the spectrum of large deposits. The largest single contributions to new reserves could come from successful development of either the Jadar or King Valley unconventional deposits, but continued discovery and development of pegmatite deposits will also be helpful.”
However, the review authors may have been suspect to the problem of false equivalence in estimating Li content of resources. This problem is outlined here by a Lithium engineer working in brine operations (2013) (apologies if you've read all this before):
BRINES RESOURCES AND RESERVES
Analysis of and Practical Recommendations for CIM’s
Publication “Best Practices for Resource and Reserve
Estimation for Lithium Brines”
By
Ihor A. Kunasz Ph.D (Geology)
"The high lithium demand forecasted for some high tech applications and batteries for electric and hybrid-electric vehicles, in particular, has sparked increased exploration for lithium, particularly for lithium-and-potassium bearing brine deposits. Resource reporting for brines has generally followed the Canadian Institute of Mining NI 43-101 guidelines formulated for hard rock deposits (metal and industrial minerals). While a number of the requirements can be appropriately applied to brines, brines are fluids and require a specific analysis leading to a distinct set of reporting requirements. Brines cannot be considered industrial minerals because the various elements occur as ions in a dynamic fluid, rather than being chemically bonded in a solid. Although chemicals are produced from brines, brines have no relation to industrial mineral deposits. This paper proposes to analyze the recently released (November 1, 2012) document “CIM Best Practice Guidelines for Resource and Reserve Estimation for Lithium Brines”, in light of the practical knowledge available from existing brine operations and recommends modifications to the guidelines, which if applied in their present format may result in overstating resources and reserves and potentially mislead investors."
...because of the false equivalence between Li in spod and Li in brine. Even with this, and not considering the industrial implications of hydroxide vs carbonate, the review authors above find compelling reasons for pegmatite mining.
KDR Price at posting:
57.5¢ Sentiment: Buy Disclosure: Held
