Western Australia’s lithium boom continues
St George holds hope for the projects which lie in an area that has delivered significant lithium results for other explorers.
The recent signing of a Plan of Action between Western Australia and Indonesia continues the dramatic critical minerals momentum of one of the world’s richest mining jurisdictions.
Already the world’s leading lithium producer, Western Australia is in the middle of an exploration boom as mining companies big and small hunt for the key battery metals commodity.
Backed by strong government support, exploration for lithium in WA has reached unprecedented levels with companies racing to grab new exploration acreage and digging through historic reports and core libraries in a bid to uncover new battery metal riches.
Market demand takes off
Global lithium demand will reach 989,000 tonnes of lithium carbonate equivalent (LCE) in 2023, exceeding the 964,000 tonnes of production expected this year, according to the March-quarter report from Australia’s Office of the Chief Economist.
The latest Federal Government Resources and Energy Quarterly Report forecast that lithium consumption will continue growing at a rapid rate, driven by high growth in the use of rechargeable batteries.
In LCE terms, global lithium consumption is forecast to increase from 814 thousand tonnes (kt) to 1,350 kt over the outlook period (from 2022 to 2025).
Lithium demand for rechargeable batteries continues to grow at a much faster pace than other sources of industrial demand for lithium.
Battery demand for lithium is expected to maintain high growth, increasing by 22% per year over the 3 years to 2025.
WA is the big player in the world’s lithium industry, providing around half of global supply.
The latest Resource and Energy report found that Australia, dominated by input from WA projects, continues to lead global lithium extraction, and mine production, with mine production forecast to continue to grow.
The increase in mine production is driven by the expansion of existing WA mines, including Greenbushes, Wodgina, Pilgangoora, Mt Marion and Mt Cattlin.
It has been forecast that Lithium, the metal that is the central ingredient for so many of the world’s batteries, is soon to be worth more to WA than oil, gas and coal combined.
McKinsey bullish on Australian opportunities
Global management consulting firm McKinsey & Company, believes global demand growth in lithium-based power offers a significant – yet limited-time – opportunity for the Australian resources sector as countries and companies are establishing their roles in the battery value chain, and decisions made now are determining how the global industry will look in the 2030s.
It said demand for lithium-based power will rise rapidly with the growth of the electric-vehicle (EV) market.
Forecasts by Tesla suggest the company will need approximately 1,000 kilotons of lithium carbonate equivalent (LCE) per year by 2030, or 16 times its 2022 needs and 30 percent more than the world currently produces.
Overall, the global passenger EV market, which relies on lithium-based batteries, is expected to grow annually by 26 percent through 2030.
Australia is already the world’s largest producer of spodumene – the base material for lithium hydroxide and lithium carbonate—and has the second largest lithium ore reserves globally.
More discoveries and refining capacity needed
While Australia has all natural riches required to continue to be a lithium powerhouse in coming years, it will require new discoveries to be made if it wants to keep that position.
A swarm of local juniors are doing their part to test a whole range of prospects and potential lithium plays across the giant state of WA.
Alchemy Resources pegmatite zones
Alchemy Resources (ASX: ALY) recently identified some new pegmatite zones upon completion of a Reverse Circulation (RC) drilling at its 100% owned Karonie lithium-gold project, located 110km east of the WA gold capital of Kalgoorlie.
The company’s geological logging of the 3,732m of drilling defined new zones of pegmatites in drillholes at several target areas.
At Taupo North the company intersected multiple zones up to 186m down hole, while at Pecan, zones of pegmatites were observed down dip of previously discovered lepidolite and spodumene outcrops.
Chief executive officer James Wilson said the pegmatites in both areas are interpreted to extend at least 100m vertically from surface and remain open with varying widths from 1-5m.
“The discovery of extensive stacked pegmatites at Taupo North and Hickory is a very positive development. This confirms our model that pegmatites occur in proximity to the Cardunia Granite,” he said.
“Importantly the pegmatites mapped at Hickory are continuous at depth, have a stacked geometry and continue to the north and west under the shallow alluvial cover which extends for approximately 3km to the north, masking any surface geochemical expression. Planning is now underway for follow-up exploration including detailed surface mapping, geochemical sampling, shallow drilling and geophysics to identify pegmatites under alluvial cover prior to further deeper drilling.”
The company is continuing detailed mapping in the areas north of Hickory to further enhance the geological model, while follow-up geochemical sampling and drilling is planned at Taupo North.
Aurumin adds lithium potential to growing portfolio
In another development, Aurumin (ASX: AUN) recently completed a successful four-hole lithium exploration program at the 100% owned Mt Palmer project 40km southeast of Southern Cross.
The four diamond holes at Mt Palmer targeted lithium bearing pegmatites and the program achieved a total of 994m drilled.
The Mt Palmer lithium program was designed to test a geochemical multi-elemental anomaly which produced lithium results of up to 146ppm and resampled (historical) drill spoils returning tantalum results up to 391ppm.
Tambourah Metals signs on Chilean partner
Tambourah Metals (ASX: TMB) recently entered into an agreement with leading Chilean lithium producer Sociedad Quimica y Minera de Chile (SQM) to jointly explore for new lithium targets in WA.
The Chilean company is entitled to an exploration earn-in across six of Tambourah’s Julimar Nth projects located 120km north of Perth.
SQM has agreed to sole fund a minimum of $1.5 million and up to $3 million of exploration and development activities to earn an initial 50% interest (and can earn a maximum of 70%) in all mineral rights at the Julimar Nth project.
SQM will also repay $350,000 of Tambourah’s previous expenditure on the project.
The projects are situated in the same Julimar Ultramafic Complex as Chalice Mining’s (ASX: CHN) world-class Julimar discovery of nickel, copper, and platinum group elements (PGEs).
Government to help speed up developments
Any exploration success will now benefit from a $22.5 million WA government commitment to overhaul the State’s approach to environmental approvals for clean energy projects such as lithium.
The Green Energy Approvals Initiative is driving investment in areas such lithium mining, critical minerals processing as well as manufacturing green energy products such as batteries.
Currently, the WA Department of Water and Environmental Regulation is assessing or regulating over 40 green energy projects, and more than 30 additional proposals are expected to be referred for assessment within the next 12 months.
“This new, streamlined approvals pathway will ensure Western Australia continues to be a destination of choice for renewable industry investors,” premier Roger Cook said.
“The whole-of-government Green Energy Approvals Initiative will drive the green industries boom in WA, supporting local jobs and a strong economy into the future.
“It will draw new investment and improve our renewable energy credentials while ensuring the environment is protected for future generations.”