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Spotlight

Sonora Lithium

Mon, 10/22/2018 - 13:03

The world’s demand for lithium carbonate is expected to grow exponentially in the coming years thanks to the rise of electric vehicles, given that their batteries are estimated to require 25-50kg of the mineral. A mine can take up to 20 years between the first exploration stage, drilling, permitting and construction of the mine. With this in mind, keeping one step ahead of the projected boom, Bacanora Lithium is positioning itself one step ahead of its competitors with its flagship Sonora Lithium project.
The project is estimated to be one of the largest deposits of lithium in the world and the London Stock Exchange-listed company is focused on bringing it into production by 2020. Its 2017 feasibility study calculates the project will have 8.8 million tons of lithium carbonate resources. The same study suggests the project can produce battery-grade lithium carbonate at an average operating cost of US$3,910/t, placing it among the lowest-cost producers in the world.
But the high expectations for the Sonora Lithium project are rooted in more than its enticing feasibility studies. Bacanora Lithium has already been producing samples at its pilot plant for the last three years. The high-grade products have made it possible for the project to secure capital from the likes of Hanwa and BlackRock. After seeing the quality of the samples, the Japanese trading house signed an offtake agreement with Bacanora Lithium to buy up to 100 percent of the mine’s production, while also becoming a major shareholder in the company. The Sovereign Wealth Fund of The Sultanate of Oman (SGRF) also signed an offtake agreement for 13,000t/y of lithium carbonate, including a conditional commitment to invest US$65 million in the company.
Considering that the project has not even started production and it has already caught the attention of such important investors, the Sonora Lithium project is expected to hit the ground running. Considering the deposit’s close proximity to the tech developers in San Francisco’s Silicon Valley, the project’s competitive advantages continue stacking up. And now other fast-growing sectors are also starting to have an appetite for lithium. As the need for renewable energy grows so does the need for energy-storage applications. Around 500kg of lithium are required to store just one MWh of power. Against this backdrop, the global lithium-ion battery market is expected to soar from US$17.5 billion to US$70 billion by 2020, the same year that the Sonora project is expected to come online.