While many lithium miners are struggling to make money right now with the price of the battery metal having dropped nearly 90% since its 2022 peak, CleanTech Lithium (AIM:CTL) is confident it won’t be faced with the same problem.
The junior explorer is advancing its flagship Laguna Verde Project in Chile towards completion of a Prefeasibility Study (PFS) and upgrade of the JORC-compliant resources of 1.8 million tonnes of lithium carbonate equivalent (LCE) to reserves.
Laguna Verde is a brine project that will utilise direct lithium extraction (DLE), a proven extraction method that is much less time consuming and water-intensive than other methods.
It focuses on selective extraction directly from lithium-rich solutions and the reinjection of brine back into aquifers. DLE also does not require evaporation ponds, meaning it has a smaller environmental footprint.
CleanTech Lithium, which is currently working towards an ASX listing, has already produced four container loads of clean, concentrated eluite that has been shipped to Conductive Energy’s plant in Chicago for conversion to battery-grade lithium.
Executive Chairman Dr Steve Kesler tells Mining.com.au that CleanTech has demonstrated DLE can recover 88% of the lithium, while rejecting 99% of the major impurities, versus the 40-45% recoveries typical of evaporation ponds.
Meanwhile, Conductive Energy has proven it can produce 99.75% battery grade lithium carbonate from CleanTech’s samples.
“During October and into November, we’ll be producing battery-grade material at a large scale so that we can provide material to potential off-takers and strategic partners to start their product qualification process,” Kesler says.
In November 2022, battery grade lithium hit its highest point ever of more than US$80,000 ($124,489) a tonne. As of September 2024 it was selling for around US$10,500 a tonne, according to Shanghai Metals Market data.
Low forecast production costs pave road to profitability
But because brine projects are less energy and water intensive, they have cost advantages over hard rock spodumene projects.
DLE has been around for some time in use in countries like China but is only just starting to be looked at more closely in Western countries.
Benchmark Minerals sees the process increasing market share to over 16% of total mined lithium to become a significant component of supply by 2030.
Kesler believes that as a brine producer in Chile, CleanTech Lithium is going to be at the bottom end of the cost curve.
“Our scoping studies demonstrated that we should be producing at about US$4,000 a tonne. Even at today’s price we’ll be profitable and at the long-term price, we should be very profitable,” he tells this news service.
“A lot of companies are clearly struggling or losing money at today’s price. Most analysts are saying there needs to be an incentive price of US$20,000 to US$25,000 a tonne for debt financing and bank financing of the projects to bring them into production.
“What we expect to see is, in the next couple of years, an equilibration of the market as projects are deferred. We believe the long-term price is going to be in that US$20,000 to US$25,000-a-tonne range.”
CleanTech Lithium is the first to introduce DLE into Chile, while others like Arcadium Lithium (NYSE:ALTM) have been using it in Argentina for 20 years, according to Kesler.
“The reality is the technology of ion exchange and absorption has been used in the metals industry for many, many years. I was using ion exchange in the uranium business 30 years ago with Rossing in Namibia,” Kesler says.
“It’s only recently, as there’s been an increased demand for lithium, people have been looking at less conventional or lower-grade lithium deposits, like the lower-grade salars in Chile and Argentina, geothermal brines, oil field brines and people are looking more at using the technology.
“There’s about six or seven commercial projects in China that have been established in the last three or four years. But we’re now at the stage of seeing it being developed in the West.”
Once Laguna Verde is operational, CleanTech then plans to replicate the process at its nearby Viento Andino Project, which is expected to be similar in size to the Laguna Verde resource of 1.8 million tonnes LCE.
ASX listing to expand investor base
CleanTech decided to pursue an ASX listing to increase its reach to Australian investors.
Kesler says the move was suggested by substantial backer Regal Funds, which owns a 15.35% stake, because resources, and in particular lithium, are not as well understood by the UK market.
“We had listed on AIM back in 2022 and Regal Funds came in as our top shareholder and increased their position over the years,” he explains.
“They’ve been very clear to say: ‘look, the AIM market doesn’t really value resources in the same way as Australia’.
“Also, there’s many institutions that want to invest in natural resources and lithium, but are limited to only investing in Australia. Clearly, with Regal in the future wanting to support us all the way through to construction, they believed it was in our best interest to list on ASX.”
CleanTech has a market capitalisation of around ￡22.50 million ($43.9 million) on the AIM exchange and US$12.9 million ($18.9 million) on the OTC market.
The company had been anticipating making its ASX debut on 7 October following completion of an offer of up to 66.7 million chess depositary interests (CDIs) at $0.30 each to raise $10 to $20 million.
However, the ASX has extended the approval process “due to procedural matters”.
CleanTech had cleared Australian Securities and Investments Commission approval and was in the final days of the public offer component, which was due to close at the end of yesterday (23 September).
The company said on Friday (20 September) last week it was working with its lawyers in Australia, its other advisers and the ASX to address the matters expeditiously and will provide the market with a further update when greater clarity has been obtained on the revised expected timetable.
Kesler says although in recent times “everybody was a bit despondent in the lithium field”, there now appears to be a more positive outlook as production cuts continue.
Lithium majors US-headquartered Albemarle (NYSE:ALB) and China’s Contemporary Amperex Technology Co (SSE:300750) have both announced production cuts at their lithium operations in Western Australia and China, respectively.
“There’s much more of a positive feel now, since there’s been cutbacks in China, not just cutbacks in lithium production in Australia,” Kesler says.
“So that’s popped everybody’s share price a bit and got a bit more enthusiasm for lithium.”
CleanTech plans to retain its AIM listing, but expects that its share register will become more Australian investor heavy.
“About 25% of our current shareholders are Australia-based, 75% out of the UK. So we still want to retain that support,” Kesler notes.
“Obviously, we want to widen our reach into Australia. If we look at what’s happened with Atlantic Lithium (ASX:A11), they were AIM listed and then dual listed on ASX, and gradually there’s been a migration.
“I think they’re probably about 40-50% ASX now. So we would expect to see the same thing or more.”
Write to Angela East at Mining.com.au
Images: CleanTech Lithium
