Western Australia’s hard-rock lithium stocks have received a much-needed leg up from car giant Volkswagen as it sets about securing supplies for its almighty push into electric vehicles.
The vigour with which the maker of the original people’s car all those years ago is pursuing an EV strategy (70 new EV models to be launched over the next 10 years and a quarter of all sales by 2025) has much to do with its recovery from the 2015 “dieselgate” scandal.
No matter what the drive, it is patently good news for lithium, which VW described as being the “irreplaceable element of the electric era”.
More to the point is that VW has moved to secure supplies from China’s lithium compounds, metal, and battery producer Ganfeng which, in turn, has WA lithium production as part of its supply chain.
In announcing the supply deal, VW said hard-rock mining for lithium was “considered the future- proof solution, both commercially and in terms of sustainability.” It was music to the WA lithium crew but not so sweet for the ASX-listed overseas lithium brine producers.
VW said that lithium extraction from brine – predominantly in Chile, Argentina and Bolivia – was deemed difficult to calculate, since the evaporation process can be severely affected by rain, snow and natural contaminants in the material and the impact on the environment (for example, on the groundwater level) can be potentially problematic.
“Lithium extracted from (hard-rock) mining for the future-relevant intermediate product lithium hydroxide, on the other hand, is commercially more attractive (there is one less production step as compared to salar production), more stable to extract, easier to scale and generally more sustainable,” VW said.
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