Recently, Qinghia Lake, China has been mentioned on social media by someone on Airgiude's team working in China to secure deals for the company. I have no idea what the deal is or if there even is a deal. I'll let my follow HC members speculate on what that could be. However, if you follow AGY closely the last 6 months and truly understand what AGY has in projects and people. Plus how AGY management puts deals together and the AGYs MD was recently in Argentina now at a unusually time. Then reading the below article on China's brine mining efforts and THEN what was said recently.
I get the following takaway:
-AGY has the former FMC GM of their Argentina operation partnering with them.
-AGY would be hoping for cash or investment in it's Argentina's projects by the Chinese.
-It appears China is having issues with it's processing of Brine and the "big 4" haven't been overly happy to help them figure it out.
-This is painfully obvious but, the Chinese Lithium processors and battery makers are looking to secure deals in the Lithium space worldwide.
-These Chinese companies have lots of money to invest in the RIGHT deal.
-Every deal Jerko has done for AGY has been well put together and in the best interests of AGY shareholders of which he is the biggest.
-Alex Molyneux (AGY chairmen) is a very well connected ASX 200 exec who's lived in China. In his current role as PDNs CEO he looks after one of the worlds largest Uranium supplies and you figure he has good Chinese government connections. One would assume China would prefer to get it's VERY large Lithium brine reserves going instead of importing.
All the above IMO!!!
DYOR!!!
Here is a primer on Qinghai Lake.
It's the largest lake in China. It's surrounded by other areas which are dried up Salta's. From the article below, it states that it has some of highest Lithium grades in the world on par with Chile. Even thought we don't hear about China lithium mining, it has one of the largest Lithium reserves in the world...ahead of even Argentina! https://minerals.usgs.gov/minerals/pubs/mcs/2017/mcs2017.pdf
The follow article was fascinating in today's context. It's was written in 6 years ago and is actually written from the environmental side of it but has some really interesting facts on the China's regions re-Lithium.
Below are some highlights. It's very long so I've edited it for relevant parts. Click on the link to read the whole article.
China plans to scale up lithium extraction to meet demand for electric cars and smart phones. But environmental damage to the fragile Tibetan plateau will be irreversible, warns **riel Lafitte.
Chinese geologists exploring Tibet in the 1960s criss-crossed the plateau, searching for the mineral wealth they assumed must be abundant, but had not yet discovered. In remote alpine deserts, the geological expeditions came upon lakes which were slowly drying-up due to long-term climate shifts. High on the empty Chang Tang plain in western Tibet, they found lakes already dry, their beds a shimmering salt pan.
Testing the various salts, the geologists discovered a scientific curiosity. One lake in particular, Drangyer Tsaka (Zabuye), held an extraordinary concentration of lithium salts; measurements of 660 parts per million (ppm) of lithium were recorded. Only in the Atacama Desert of the Andes had such levels of lithium been discovered.
For decades, these findings were known only to a handful of geologists. Lithium was a metal in moderate demand, for unglamorous uses in the manufacture of ceramics and industrial greases and, in tiny amounts, as a psychiatric anti-depressant. China satisfied its modest need for lithium by mining a lithium-rich mineral ore at Yichun, in eastern China’s Jiangxi province. Should that prove insufficient, there were other salt lakes on the Tibetan Plateau, far from lonely Drangyer Tsaka.
In the Tsaidam Basin of northern Tibet, geologists found not only salt lakes, but also oil, asbestos, lead, zinc; and in Tso Ngonpo (Qinghai Lake) they found minerals that could be used for developing submarine-based nuclear missiles.
So valuable were the lakes in the Tsaidam Basin that a railway was built more than three decades ago, enabling tanker wagons to haul millions of tonnes of oil to Lanzhou, the capital of Gansu province. The availability of so many minerals in one basin, as well as gas fields discovered and exploited later, provided the raw materials for a major industrial base. Golmud, formerly a camel-train stop on the long haul between Lanzhou and Lhasa, became an industrial city, with petrochemical plants that produced plastics, fuel, fertilisers and explosives. The salts of the many salt lakes were essential inputs.
One such lake, Charhan (or Da Qaidam), in the arid Tsaidam Basin stood out for its high level of lithium salts, mixed in as usual with common sodium salt, potassium and magnesium salts. It had concentrations of lithium recorded at 330 ppm, half the level of Drangyer Tsaka, but extraordinary by any other comparison.
In the 1980s, the salts of Tibet started appearing in the central government’s five-year plans, but actual use was limited to scooping huge quantities of salt from briny lake beds to use in the manufacture of polyvinyl chloride and urea fertiliser. These processes ignored not only lithium, but also the potentially valuable potassium and magnesium salts.
By the 1990s, as the productivity of Chinese farm soils depleted, attention shifted to potassium salts, used to make potash, essential to a mix of chemical fertilisers that could restore balance and fertility to overworked farmland soils. At first, China had to import potash from Canada to meet this demand, yet the salt lakes of the Tsaidam Basin, rich in potash, were industrially undeveloped. Finally, China invested in domestic potash production, which is now one of the major industries of Qinghai province, along with petrochemicals.
Until very recently, lithium remained an industrial byproduct, a waste in the liquor remaining after everything valuable had been extracted. But now demand for lithium is growing, as mobile phones and laptop computers, all powered by lithium-ion (li-ion) batteries have swept the world. And China has become the li-ion battery factory of the world, an industry growing at 33% a year.
But the real game changer that has made yesterday’s industrial waste liquor tomorrow’s hot investment stock, is the electric car. The amount of lithium in the li-ion batteries driving electric cars is measured in kilograms, rather than grams. And this growing demand will be satisfied by extracting lithium from the accessible Tsaidam Basin and even the inaccessible Drangyer Tsaka.
China’s battery manufacturers saw the possibility of making the leap, from makers of no-name brands hidden inside your iPad or smartphone, to big-brand car manufacturers. The quickest to capitalise and upscale was a Shenzhen battery-maker called BYD – short for Build Your Dreams – which transformed itself overnight into a car manufacturer.
BYD has ambitiously seized the lead in the race to capture the predicted electric car boom, by announcing a new model, the C6, due to hit the roads in 2011, which would revolutionise motoring, reduce pollution and establish China as a brand leader in green technologies, along with wind and solar power manufacturing.
Undeterred by global financial crises and wildly fluctuating commodity prices for raw materials, BYD pressed ahead, with one bold announcement after another. One coup was its announcement in 2010 that it had not only taken an equity stake in the Drangyer Tsaka lithium salt deposit, but had exclusive contractual rights to its lithium salts for the coming 20 years.
This captured the attention of two of the world’s richest men, Warren Buffett and Bill Gates, who flew to Shenzhen, to be draped with golden Tibetan silk scarves at the launch of BYD’s M6 electric car prototype. Back in 2008, Buffett bought a 10% equity stake in BYD, signaling to the global market that the company was the next big thing.
China is currently the world’s third largest miner of lithium, after Chile and Australia, and nearly 90% of its output comes from salt lakes in Qinghai province. Qinghai produced 6,000 tonnes of lithium last year and plans to raise this to 30,000 tonnes over the next five years, the director of Qinghai's Land and Resources Department, Liu Shanqing, was quoted as saying in China Daily.
“The original plan was to have a capacity of 60,000 tonnes by 2015 but, since extraction technologies are not that mature, we have scaled it down to 30,000 tonnes,” he said. This still represents a fivefold increase in the production of lithium in Qinghai province. Qinghai Salt Lake Industry Group’s 10,000 tonnes per year brine-based lithium carbonate and chloride project in Qinghai is scheduled be in full production in 2012, and to triple its output by 2015.
The speed of lithium extraction has been slowed down by technical problems with the use of volatile toxic solvents, including isobutanol, pentanol, tetrahydrofuran, cresol and chloroform. Unless the solvents work perfectly, the purity of the lithium is contaminated and fails to reach battery-grade suited for use in computers and electric cars. These solvents, which give off fumes even at ordinary temperatures, require careful storage in stainless steel pressure vessels, operated by a trained and alert workforce.
The first large-scale lithium extraction factory in the Tsaidam basin is due to begin operation soon according to Metal Bulletin, and even Drangyer Tsaka is now scheduled to produce thousands of tonnes of lithium annually. It may not be long before your latest handheld passport to mobile connectivity is powered by Tibetan lithium.
In April 2011, Tibet Mineral Development Corporation raised 1.21 billion yuan (US$187.22 million) through a non-public offering of shares to eight investors to recapitalise its subsidiaries. One of those subsidiaries, Tibet Zabuye Lithium Technologies Company, will receive US$15.5 million to intensify lithium extraction in Drangyer Tsaka, Interfax’s China Mining & Metals Weekly reported in July 2011. How will such industrialisation work at Drangyer Tsaka, in the alpine desert of upper Tibet? Drangyer Tsaka is close to 2,000 kilometres from the nearest Chinese industrial city, and almost entirely lacking in roads, towns, power supply and communications. If the world is to watch for environmental impacts, it will have to be from afar.
The far north, far west and now far east of the Tibetan Plateau are all designated lithium-extraction zones, far from the gaze of regulatory authorities. Lives have been lost in protests against mining. Can we assume that the “green” technology of the future will be powered by ethnically obtained lithium?
**riel Lafitte is an environmental policy consultant who has worked with Tibetans for over 30 years.
AGY Price at posting:
2.8¢ Sentiment: Buy Disclosure: Held
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