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15 hours ago
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Lithium in Australia: the future of the ‘white gold' rush
The global lithium market is undergoing a period of flux. Following years of solid growth, prices have plummeted from their 2022 peak amid slowing demand for electric vehicles (EVs) and an oversupply from global producers. Overall, the cost of lithium hydroxide fell by around three quarters between 2023 and 2024, and has continued to fall in 2025. Australia, the world's largest producer of lithium ore (accounting for 46% of the global total in 2024), felt this decline more sharply than most, forcing several mining operations to pause amid deteriorating market conditions. However, a rebound may be on the horizon. Analysts expect a resurgence in 2025, fuelled by renewed growth in EV adoption and clean energy storage. Although lithium prices remain difficult to predict, Australian miners are once more betting big on the metal. With an abundance of active lithium mines and reserves, Australia is well placed to be at the forefront of this lithium opportunity. However, as demand grows, questions have been raised as to how this burgeoning market can remain sustainable and how waste streams can be safely managed. Strengthening domestic recycling capabilities, developing greener processing methods and building closed-loop supply chains could be key to ensuring that growth in lithium production does not come at the expense of the environment. By 2040, the International Energy Agency (IEA) expects demand for lithium to be more than 40-times current levels if the world is to meet its Paris Agreement goals. As such, despite the current market volatility, optimism about the future of lithium remains strong. In this context, Australia has positioned itself to be a leading global supplier. In 2024, the federal government extended a A$230m ($149.81m) loan to Liontown Resources, which began production at its Kathleen Valley mine last July. The mine is expected to produce around 500,000 tonnes (t) of spodumene concentrate annually. Spodumene is Australia's main source of lithium. Meanwhile, Perth-based Pilbara Minerals plans to boost lithium ore production at Pilgangoora by 50% over the next year through its P1000 project. Crucially, there has been an uptick in interest to build out not only the extraction side of the lithium supply chain but also refineries. For instance, in Western Australia, Covalent Lithium is constructing its own lithium refinery, while Albemarle is operating another refinery in the region. The motivation behind the shift in focus stems from efforts to diversify critical minerals supply chains and move away from China's continued dominance. According to the IEA, China currently accounts for 70% of global lithium refining. 'At the moment in Australia, we are doing the mining and integration aspects of lithium-ion [Li-ion] batteries really well,' says Neeraj Sharma, chemistry professor at the University of New South Wales, and founder of the Australian battery society. 'Our grid is years ahead when it comes to battery storage. It is the middle part of the supply chain that we need to grow – the processing and cell manufacturing aspects.' Similarly, Serkan Saydam, chair of mining engineering at UNSW Sydney, believes the main gap in Australia's lithium supply chain lies in the processing and refining element. 'While Australia excels in lithium extraction, it currently lacks sufficient domestic processing and refining capacity, leading to reliance on overseas facilities,' says Saydam. Indeed, in 2022–23 Australia exported 98% of its spodumene concentrate for processing. Both Sharma and Saydam identify developing lithium processing capability as necessary not only for Australia's national security and economic growth but also for sustainable industry development. Saydam says developing low-emission processing infrastructure is essential 'not only for economic gain but also for minimising environmental impacts through tighter regulatory oversight'. Building out this part of the supply chain could also, Sharma believes, help establish a more robust battery recycling industry in Australia. 'If we know what is going into the batteries from a processing perspective, it will better equip us to know how to recycle them at the end of life,' he tells Mining Technology. 'We are seeing a lot of interest from the mining and start-up sectors to move towards this, but right now, without the right electrode processing or refinement in-country, it is harder to create the recycling processes needed in-country.' According to the Commonwealth Scientific and Industrial Research Organisation, only around 10% of Li-ion battery waste is currently recycled in Australia. However, Sharma predicts that as large-scale battery demand grows, so too will the recycling rates. 'I think recycling rates for things like EV batteries will be close to 100%,' he says. 'Just by the nature of the fact that these batteries are large, people won't want to have them hanging around.' The difficulty, he says, lies in scalability and the fact that battery chemistry is still evolving. 'Currently there are not enough Li-ion batteries to recycle efficiently,' says Sharma, adding that battery chemistry is constantly evolving, meaning recyclers are collecting batteries that 'have a mix of so many different chemicals'. Some battery chemistries are emerging as dominant, however, and Sharma suggests that the next few years will see the emergence of a 'more homogenous' battery waste stream that will be easier to organise and recycle. '[Once] you have more batteries available to recycle, then you have the scale to be able to do so effectively,' he adds. 'Once you start to standardise the battery chemistry, you can then start to think about really minimising the steps of recycling.' Some progress is being made. There is also an historical precedent, with the lead-acid battery industry providing a model Australia can learn from. In January 2022, the Battery Stewardship Council introduced a levy scheme in partnership with manufacturers, lifting the recovery rate of small batteries from less than 8% to more than 16% within six months. The Australian Government also recently announced its National Battery Strategy, laying out ways to support its domestic battery industry as it grows. As Australia works to close the loop, embedding sustainability throughout the supply chain will be crucial. With environmental, social and governance standards becoming more stringent, shareholders and consumers alike will be paying close attention. Saydam warns that Australia's mines will have to integrate more sustainable practices into operations to not only meet future lithium demand but also become a 'key player' in the global transition to a low-carbon economy. 'Investment in innovation – such as direct lithium extraction and low-carbon refining technologies – is vital to reduce the environmental footprint and support a circular economy,' Saydam says. 'The industry must navigate global market volatility and advocate for clear national policies that support sustainable growth. 'Addressing these challenges holistically will be key to ensuring that Australia can scale its lithium production in a responsible and globally competitive manner,' he adds. Australia has already begun to develop local refining capacity and domestic battery recycling initiatives. Still, significant hurdles remain in meeting the fast-rising global demand. Optimising lithium extraction and processing will require a coordinated blend of legislative reform, technological advancement and strategic investment, according to Saydam. 'Legislative frameworks need to be strengthened to encourage sustainable and efficient practices,' he says. 'This includes creating clear, stable policies that incentivise domestic value-adding activities such as refining and battery material production, rather than solely exporting raw materials. 'Regulatory settings should also enforce strict environmental standards to ensure water use, waste management and emissions are responsibly managed, while fast-tracking approvals for sustainable technology deployment,' Saydam continues. Enhancing community and Indigenous engagement, investing in workforce upskilling, and encouraging collaboration between academia, industry and government were also highlighted as key to long-term success. As Saydam concludes: 'In essence, the long-term success of Australia's lithium industry depends on a holistic approach that integrates sustainability, innovation and strategic positioning in the global value chain.' "Lithium in Australia: the future of the 'white gold' rush" was originally created and published by Mining Technology, a GlobalData owned brand. The information on this site has been included in good faith for general informational purposes only. It is not intended to amount to advice on which you should rely, and we give no representation, warranty or guarantee, whether express or implied as to its accuracy or completeness. You must obtain professional or specialist advice before taking, or refraining from, any action on the basis of the content on our site. Sign in to access your portfolio
CTV News
4 days ago
- Business
- CTV News
Ontario's new energy plan to expand resources over next 25 years: Lecce
Video Energy Minister Stephen Lecce discusses Ontario's plan to expand energy resources over the next 25 years.
News.com.au
5 days ago
- Business
- News.com.au
Geopacific gets a shot in the arm with St Barbara backing
One of Australia's top mining journalists, Kristie Batten, writes for Stockhead every week in her regular column placing a watchful eye on the movers and shakers of the small cap resources scene. Geopacific Resources (ASX:GPR) has got a busy six months ahead as it firms up the development plans for its Woodlark Island gold project in Papua New Guinea. The company is well-funded to complete the definitive feasibility study, having raised $40 million at the start of the year, which represented one of the biggest raisings by a junior in an otherwise bleak March quarter for fundraisings. The company will also complete a further 30,000m of reverse circulation and diamond drilling with the aim of growing the resource, which stands at 45.56 million tonnes at 1.07 grams per tonne gold for 1.56 million ounces. 'The intent of that is really to position ourselves by the end of this year, early into next year, so that we've obviously got a much better idea of the project economics and it's been de-risked, and we're also having more advanced discussions with either financiers or other mid-tier miners that see the same value that we do,' Geopacific CEO James Fox told Stockhead. 'We haven't decided exactly which way we want to go, whether or not we develop it ourselves, or whether we partner up with a group – I don't think they're mutually exclusive.' New major shareholder Geopacific's largest shareholder with 46.1% is Germany's Deutsche Balaton and Delphi, which are active investors in Australia's resources space. Another company backed by the German group, Patronus Resources (ASX:PTN), sub-underwrote Geopacific's $40 million raising, acquiring a 15.7% stake. Earlier this month, Patronus agreed to swap its stake in Geopacific with St Barbara (ASX:SBM), buying back St Barbara's stake in Patronus. St Barbara, which operates the Simberi mine in PNG, now holds 14.4% of Geopacific. Geopacific shares had been flat all year but are up 20% this month. Fox said he'd been in contact with St Barbara managing director Andrew Strelein in the past. 'We're figuring out how Geopacific and Woodlark can leverage off St Barbara's position in PNG, in terms of expertise, in terms of personnel, in terms of insights and whether or not there are any opportunities for us to collaborate, whether it be on a project or obviously, on a company wide basis,' he said. 'I think it'd be great to get some of their exploration team over to our project whilst we're drilling, obviously to have a look at some of the porphyry potential that we've been looking at, as well as the general program that we're currently working on.' While the political system in PNG is stable under Prime Minister James Marape, the government is looking to update the country's mining code later this year. 'Given that are operating there, it does allow us to leverage off some of their experience, in terms of negotiating with the state as well,' Fox said. Woodlark refresh A previous management team of Geopacific had pushed the button on a $225 million mine but halted construction in 2021 after spending $100 million, due to inflation, bad weather and the pandemic. Under Fox, who joined in late 2023, the company spent the first six months of last year applying the lessons learned from previous construction and preparing a new scoping study. The study, released in July 2024, outlined $326 million to produce 95,000 ounces of gold per annum at all-in sustaining costs of $1534 per ounce and all-in costs of $1820/oz over 12 years. Undiscounted life of mine revenue was forecast at $3.3 billion, while pre-tax net cashflow was estimated to be $1.3 billion. The study returned a post-tax net present value of $501 million, an internal rate of return of 37.7% and 18-month payback period. However, the study used a gold price of just $2900/oz, around 45% lower than today's spot price. 'Because the gold price has moved so much, so quickly, there's a huge amount of catch-up to play,' Fox said. 'And of course, what that does for us, and lots of prospective gold companies, it allows you to have a sort of a more critical look at your project and focus on the areas that are more profitable and the economics are better than just volume. 'It's not necessarily about producing as much gold as we can. It's about producing the most gold at the best cost.' The DFS will also look at increasing the throughput rate beyond the 2.9Mt per annum envisaged in the scoping study given more than 400,000oz of the resource was not included. 'It's much better for us to increase the throughput rate to maintain the same mine life, then bring the cashflow forward in terms of the project economics,' Fox said. 'If we do that, then we're up to almost a $1 billion worth of pre-tax NPV and an IRR of over 50%.'
News.com.au
13-06-2025
- Business
- News.com.au
Barry FitzGerald: Kairos picks right time to ramp up Pilbara gold exploration
'Garimpeiro' columnist Barry FitzGerald has covered the resources industry for 35 years. Now he's sharing the benefits of his experience with Stockhead readers. Garimpeiro's memory is a bit fuzzy on the exact date he had a coffee with Simon Lill in Melbourne's Bank Place. But it was likely early 2019 and Garimpeiro remembers being a bit grumpy that the catch-up with the then executive chairman of De Grey Mining wasn't scheduled for the PM rather than the AM so it could have taken place in the Mitre Tavern just down the alley. Thanks to the cleat head though, Garimpeiro remembers De Grey was trading at less than 10c share for a market cap of about $40 million and that Lill was enthusiastic about growing the company's gold resource at its Mallina gold project in the Pilbara. His enthusiasm proved well placed. Late in 2019, De Grey made the intrusion-related Hemi discovery which has grown to more than 11 million ounces, making Mallina 13.5Moz all up after the pre-Hemi shear-hosted gold resource is included. Northern Star Resources (ASX:NST) has just made De Grey and its Pilbara gold riches its own with an agreed $5 billion scrip takeover bid which ended up being a $6 billion takeout due to rising gold prices pushing Northern Star scrip higher. Lill was there all the way through De Grey's journey from an overlooked junior gold explorer in the then unfashionable Pilbara – for gold at any rate – through to the last day when De Grey shareholders voted through the Northern Star takeover in April. Any way it is sliced, the De Grey journey over the last six years has been one of the biggest single valuation creation exercises in the ASX gold space. It wasn't a 10-bagger. It was a 150-bagger, if you don't mind. Lill is the first to say it was a team effort. And it was. Coming from a stockbroking and capital markets background, his main contribution was bringing in the small licks of capital to keep the lights on during the hungry years, and then the big licks needed to advance the Hemi discovery to the point where Northern Star had to buy it. Back in black Garimpeiro would be content after an achievement like Lill's at De Grey to hold court at the front bar at the Mitre and not do much else. But that's not for Lill. He is back as a chairman guiding another Pilbara gold stock – Kairos Minerals (ASX:KAI). For a couple of years, when the Pilbara conglomerate gold story was running hot, and another couple of years when lithium was the thing, Kairos took its eye off its Mt York gold project. Those distractions left the stock with few followers. But starting in May 2022 when veteran geologist Peter Turner became manager director, Mt York is now getting the attention it deserves. And now with Lill as non-executive chairman, Kairos is likely on a re-rating pathway. Mt York deserves attention all right. It stands as a 1.4 million ounce resource in a single pit shell (43Mt grading 1g/t). The mineralisation is of the banded iron formation (BIF) style which makes it different to Hemi, 55km to the north-west. But as experienced miners will tell you, the style doesn't matter as long as there is plenty of gold to be had. Geological comparisons for Mt York include Karlawinda in the Pilbara and Mt Gibson in the Murchison, the two gold deposits that underpin Capricorn Metals (ASX:CMM) $4 billion market cap. Major exploration program Mt York is better grade than both of those but it has a long way to go to catch them in terms of resource ounces. The biggest exploration program ever undertaken by Kairos is now underway, with a likely first target being to grow Mt York to something more than 2Moz. Helping the cause is pending access for Kairos to a 1500m extension of the mineralisation as it trends into its neighbour's ground – Pilbara Minerals, and its Pilgangoora lithium operation. An earlier deal between Kairos and Pilbara involved Pilbara agreeing to a $20 million payment for some non-core Kairos tenements. The first $10m instalment is helping fund the record exploration effort at Mt York. The exploration effort will likely lead to an increased mineral resource estimate update later this year – a sure fire re-rating event. Kairos could certainly do with a re-rating event. At its mid-week price of 2.8c a share it is has a market cap of $73.6 million. Based on the existing 1.4Moz resource estimate, it has one of the lowest enterprise value-to-resource ounce metrics in its ASX peer group. That is despite a scoping study in November last year outlining a $276 million project producing 115,000oz annually at an all-in sustaining cost of $2205/oz. Using a conservative $3500/oz gold price, the pre-tax net present value (NPV) was put at $410 million and capital payback was put at 2.7 years. Gold is now $5100/oz or thereabouts. Plug that into the financial model and Garimpeiro estimates a NPV of around $1 billion and a payback period well short of two years. That makes Kairos' current market look to be on the mean side of things. That's particularly so when Mt York gets juiced up by the additional ounces expected to come from the big exploration push now underway.
News.com.au
12-06-2025
- Business
- News.com.au
Argonaut Algorithm: Lithium stocks are getting cheaper, so you don't need to skimp on quality
Argonaut Funds Management's David Franklyn joins Stockhead to share investing secrets from the high-conviction resource sector investing fund, including his junior stock pick of the month. Lithium prices have tumbled to a fresh four year low of late. After numerous dead cat bounces in the US$800/t range last year, 6% Li2O spodumene – the kind of lithium produced by WA's hard rock miners – is trading at US$620/t according to Fastmarkets. Those are levels that only Greenbushes in WA's South West, the highest grade hard rock lithium mine in the world, is really making money on. Prices last bottomed out at US$375/t in March 2020, before the EV boom that temporarily sent them as high as US$8000/t on the spot market in late 2022. It's impossible to predict if and when that could happen again. But fund manager David Franklyn has an important message. With lithium stocks all off the boil, it's the right time to trade out marginal players for true quality. It's like heading to a McDonalds only to find out the place next door is selling a porterhouse for only a couple bucks extra. "I think the advantage you have where you're looking at a sector where it's near the bottom of the cycle rather than near the top of the cycle, is you don't need to compromise on quality," he said. "What we tend to do is go, do we think we can double our money in the next three years? "You don't really know when that turn in the market is going to happen, whether it happens in the first three months that you own it or whether it happens in two years and nine months. "We're here for a medium-term investment and we're happy to wait and see when that return actually pays off." The turn It's impossible to really say where the top or bottom of any market is. Despite the hype around the battery metal, lithium remains small and immature, with price-setting opaque and futures markets in their infancy. It can make it hard to truly assess the role supply and demand plays in setting prices, especially with two of the market's biggest end users – dominant Chinese battery producer CATL and EV maker BYD stepping upstream into the raw materials space to secure their own supply chains. They operate higher cost lepidolite mines, a lower grade, lower quality form of hard rock lithium, that counts as a major swing factor for lithium supply – a market otherwise dominated by Australian and African spodumene and South American brines. "The industry is dominated by CATL and BYD. They produce about over 55% of global batteries. And therefore they're the biggest buyer of lithium," Franklyn said. "You could argue they're bringing on high cost lepidolite a time the market's slightly oversupplied to force the price down, because ultimately they're a big buyer of lithium and by doing that they're reducing their purchase price. "It reflects the fact that lithium is still a small market, it's dominated by a small number of major players and therefore it is open to some form of manipulation." Yet feedback from lithium suppliers suggests demand remains strong. "You've got a doubling of (demand in) the industry in the next five years and you have prices that are going down," Franklyn said. "I think we're getting near the bottom of the market and the question is do you start to chip away at some of these good quality lithium stocks." There are four serious players in the lithium mining space – Pilbara Minerals (ASX:PLS), IGO (ASX:IGO), which owns ~25% of Greenbushes, Mineral Resources (ASX:MIN) and Liontown Resources (ASX:LTR). MinRes and Liontown are "very good businesses" but still have debt concerns to address. "At this point in the cycle, do you want to take on the additional risk? And our view is, I don't think you need to," Franklyn said. With IGO saddled by two troublesome lithium refining plants and a nickel business that's winding down, that makes the cashed up Pilbara the standout option for Argonaut. "The benefit of Pilbara is it's got net cash of about $700m and it's very well positioned," Franklyn said. "I'd probably put Pilbara slightly ahead of IGO." PLS shares rose a heady 5.6% on Wednesday to $1.425 after a 23% increase in lithium resources at its flagship Pilgangoora mine in WA's North West to 446Mt at 1.28% Li2O. It remains some way of its $5.31 boom time highs. Junior stock of the month Patriot Battery Metals (ASX:PMT) For Franklyn, the Canadian developer led by former PLS MD Ken Brinsden remains the standout junior stock in the lithium market. "At the developer level the benefit you've got is you can focus on quality," Franklynsaid. "It's got a market cap of $420m, it's the largest hard rock lithium asset in the Americas, it's high grade, simple mineralogy, it's got VW's as a strategic partner, it has got 4.8 million tonnes of contained LCE, so it's huge. " It kind of ticks all the boxes as a high-quality emerging player in the lithium space. And being in North America also makes some sense as, as you see what's happenin with the US and Canada, where Canada's making projects easy to get up and running, and the US is really pushing for critical minerals supply coming from areas close by." Argonaut Funds Management is a high conviction resource sector investor managing the Argonaut Natural Resources Fund and the Argonaut Global Gold Fund. David Franklyn is the Fund Manager for the Argonaut Natural Resources Fund. The views, information, or opinions expressed in this article are solely those of the interviewee and do not represent the views of Stockhead. Stockhead does not provide, endorse or otherwise assume responsibility for any financial product advice contained in this article.
