Insights on Lithium and Rare Earth Mining

Aug 24, 2024

Lecture Notes: Lithium and Rare Earth Mining

Introduction

  • Discussion on money miners and the increasing focus on lithium and rare earth elements.
  • Mention of a follow-up session planned due to high interest.
  • Guest speaker: Ahed, a geological and exploration expert.

Key Agenda: Lithium and Rare Earth Mining

  • Main topics: Global exploration of lithium and rare earth projects.
  • Lithium perceived as still having an overhang in the market.
  • Discussion on the Australian vs. Canadian market focus—Canada focuses heavily on uranium.
  • Importance of Brazilian rare earth market and retail investor interest.
  • The conversation will cover multiple companies and projects.

Lithium Mining

General Overview

  • Lithium mining is relatively young in terms of technical understanding.
  • Many existing lithium mines were originally tin or tantalum mines.
  • Discussion on the qualities of a good lithium mine: size of the deposit, simplicity in mineralogy.

Types of Lithium Deposits

  • Pegmatites: Often contain lithium, cesium, and tantalum.
  • Lithium as a specialty chemical: Could become a bulk commodity depending on use cases.
  • Complexity in mining: Less complexity often leads to more profitable ventures.

Canadian vs Australian Lithium

  • James Bay, Quebec: Known for infrastructure development by Quebec Hydro. Easy access due to existing roads and infrastructure, geologically simple to locate pegmatites.
  • Comparison between companies like Patriot and Winsome in Canada.
  • Difference in North American and Australian lithium crystal structures—potential for DSO.

Economic and Market Dynamics

  • Market confidence issues and future projections of lithium use.
  • Influence of technology: Ore-sorting technology can improve processing, particularly in complex mines.
  • Australian Development Pipeline: Line Town, Pilbara Minerals, and other major projects discussed.

Rare Earth Elements (REE)

Overview

  • Rare Earths are complex both technically and economically.
  • China is the major producer and consumer; holds strategic market control.
  • Types of Rare Earth Sources: Hard rock, monazite sands, and ionic clays.

Market and Production Dynamics

  • Chinese Dominance: Due to possession of processing IP and facilities.
  • New Developments: Brazil emerging as a significant player with ionic clay deposits.

Ionic Clay Rare Earths

  • Advantages: Easier to mine (free dig), lower environmental impact compared to hard rock.
  • Challenges: Lower grades, environmentally challenging due to leaching processes.

Global Market Considerations

  • Potential for Brazil to become a supply hub for North America and Europe.
  • Discussion on companies like Brazilian Rare Earths, Meteoric, and VMM.
  • Economic viability and strategic nature of rare earth mining.

Conclusion

  • REE market is less significant globally in size compared to others like copper.
  • Strategic value vs economic value in rare earth mining.
  • Incumbents like Lynas and Alcoa are well-poised to meet market demands.
  • Final thoughts on lithium and rare earth markets: Consider major established players for investment.