The recent data from the Department of Industry, as reported by the AFR, underscores a remarkable and transformative shift in the Lithium sector that cannot be underestimated. Australian lithium exports are forecast to soar to $18.6 billion by the end of June this year, a staggering leap from the $1.1 billion recorded in the same period in 2020. Just a couple of years ago, in 2021, the department projected that by 2026, Australian lithium exports would amount to $5.4 billion. Today, they anticipate this figure to surpass $13 billion in 2026, and exceed $20 billion in 2027 and 2028.
The recent developments and upcoming plans for Anson Resources (ASX:ASN) make it an intriguing value proposition for investors. Here are several reasons:
1 - Positioned to Supply Growing Demand: Anson Resources is uniquely positioned to meet the soaring global demand for lithium, which is projected to require a 60% increase in supply over the next two years. By 2030, lithium demand is expected to reach 3Mt. Anson, with its Paradox Project in Utah, is one of the very few advanced stage lithium projects in the United States that has a Definitive Feasibility Study (DFS) complete, and has over 1Mt of Lithium Carbonate Equivalent (LCE) resource.
2 - Strong Project Economics: The Paradox Project, which completed its Definitive Feasibility Study (DFS) last year, boasts strong project economics as a low-cost, long-life project. The project is expected to provide a pre-tax NPV of US$1,306 million and IRR of 47% from revenues of US$5,080m over 23 years of operations. The high-quality lithium carbonate produced from the project, which exceeds battery grade requirements, makes it attractive to US battery manufacturers.
3 - Expansion and Exploration: Anson has a major resource drilling campaign underway at the Western Region of the Paradox Project and has recently added the Green River lithium project to its Utah landholdings. The company plans to conduct a drilling and sampling program of existing wells within the Green River project area in the near term, with the plan to include the results from these horizons in a further JORC Resource upgrade.
4 - Offtake and Funding Discussions: The company is currently in discussions for funding and offtake agreements, which will contribute significantly to the project's financing. The company's expected timeline aligns with the anticipated recovery of the lithium market, with a Final Investment Decision (FID) expected this year and production of the first battery-grade lithium carbonate in 2025.
This dramatic increase in Lithium demand is not confined to Australia. Evidence of global interest and investment in this sector is unmistakable. We are not just riding a wave, we are riding a veritable tsunami of once-in-a-lifetime technological disruption. The Lithium sector is not just growing - it's undergoing a rapid, unprecedented transformation, akin to an 'S-curve' of innovation and growth. As such, it's clear that we've placed our bets wisely, and the future looks promising.
Note: Not Financial Advice.
DYOR and GLTAH
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