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Critical Elements Corp: Putting Canada on the map of Lithium Producers

(Kitco News) -

In a time of rapidly increasing demand for lithium batteries, there are growing concerns over sufficient supplies at acceptable prices. A Canadian company, Critical Elements Corporation of Montreal/Quebec is set to enter the market and take its place, center stage. Jean-François Meilleur, Vice President of CRE, told us more about lithium, and the role his company intends to play in the lithium market.

Meilleur: “Our project is a pure discovery, not a deposit that was historically known. It was never tested or ever known. So we went through a lot of metallurgical work proving that our material has a very low iron content, which makes it very usable for the glass industry. The glass market still accounts for about 35% of the lithium market. The market for lithium batteries is equally large but shows double-digit growth rates per year (10-12% on average), whereas glass grows at only 2-6% per year. CRE’s material is equally suited for both markets”.

CRE have been studying the market for a very long time and determined that a chemical company would be the best possible partner for marketing its products. The company now entered into an exclusive $3 billion “take or pay off-take” agreement with a “leading chemical company” whose name has not yet been disclosed. Said company is currently a client of the three large lithium producers in operation but want to establish themselves as a fourth producer.

Meilleur added: “Critical Materials Corporation is the largest lithium-tantalum deposit in the world. It is the only new source of tantalum in a non-conflict zone outside of Africa. Over $ 200M in infrastructure, including railroad, an airport, power and communications are already in place”.

Does location matter, and how relevant will the project be to companies like Tesla and their new “Gigafactory” in Nevada? Meilleur: “Location is secondary for lithium. We are not selling iron ore volumes. We are selling high margin materials with very narrow specifications. Quality is key rather than location. Many lithium specialists agree that the best form of lithium products have been obtained from spodumene deposits rather than brine deposits. There is a small cost advantage to brine deposits but this brine needs to be of high quality.  
Tesla is a big cheerleader for the lithium space, but in terms of demand, the market is driven very much by Asia at the moment, mostly by China.  There are three Gigafactories, either in construction or in operation, in Asia that are driving lithium demand and price. Lithium carbonate prices went up by 10% in April of 2014 when prices were around US$ 5,700/t. In December of 2014, a second raise of 10% was announced, and – most recently – another raise by an additional 15% was announced in October of this year. Prices are now near US$ 8,000/t. So the timing for our new project couldn’t be any better than it is now”.

 Asked about the project’s capacity, Meilleur explained: “The project is set up to produce 26 606 tonnes of lithium carbonate with 99.98% purity. Because of our low iron content one quarter of the production will go to the glass market as a spodumene concentrate and the remaining will go to the battery market. In addition the tantalum oxide byproduct should reach 300,000lb / year with the new recovery work, and the mica (60,000t / year) which haven’t been engineered into our economics. But our partner is involved in the mica market and believes in the potential of a solid market for the product. Our economics are based on a $6000 /tonne lithium carbonate price”.

Current plans call for a completion of the feasibility study and a launch of construction by early 2017 depending on permitting. With guaranteed lithium sales and project funding already taking place, and with a market increasing both in volume and price ahead, Critical Materials Corp. seems set for a great future.

By Bodo Albrecht,
Follow me on Twitter @BodoAlbrecht



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