This article is a sponsored feature from Mining.com.au partner Venari Minerals. It is not financial advice. Talk to a registered financial expert before making investment decisions.
Lithium demand is rising as higher fuel costs, global instability, and the shift towards renewable energy continue to drive battery demand.
Against this backdrop, Venari Minerals’ (ASX:VMS) Red Mountain Lithium Project in Nevada is gaining attention as a ‘high-grade’ lithium asset.
Mining.com.au spoke with Venari Minerals Executive Director Matt Healy about lithium’s growing role in the energy transition and the company’s plans for Red Mountain.
Unpacking the Red Mountain Project
Located in Nevada, along Route 6 — a major transcontinental highway — the Red Mountain Project is a sizeable lithium deposit with a lot of promise.
“The northern part of the project is extremely high-grade. On its own, it would rank among the top four highest grade lithium projects in the United States,” Healy says.
The project not only houses a ‘high-grade’ deposit, but Red Mountain is also optimally positioned. It sits close to a 500-kilovolt transmission line — eliminating expensive upfront costs on power connection — and is situated only a half-day’s driving distance from the Tesla Gigafactory, making it easier to capitalise on a potential future customer.
Due to the nature of the resource, the Red Mountain Project will be able to produce battery-grade lithium directly at the mine site and will not require off-site processing. It will exploit the deposit being hosted within soft rock types, siltstone and sandstone, making it more accessible than typical hard-rock deposits. Another feature that sets Venari’s project apart is that mineralisation outcrops at the surface.
“I think this is significant, because unlike many projects you don’t have to dig through 20 metres of gravel to get to payday,” Healy says.
Healy shares enthusiastically that initial test work has shown a high lithium leach recovery, and the project can produce a 99.5% pure battery-grade lithium carbonate product, showing great promise for the future of the project.
Like any mining undertaking, there are always risks — sedimentary lithium deposits are mostly unproven at a commercial scale and there are presently no large-scale mines fully operating, but the world-class Thacker Pass mine, also located in Nevada, is under construction. Ongoing test work, shallow mineralisation, and a prime location contribute to the project shaping up to be a major participant in the American lithium supply chain.
What’s behind the lithium boom?
The demand for lithium is increasing gradually in response to multiple shifts. Global instability and the rising cost of fuel has caused a huge surge in electric vehicle (EV) production, which are powered by lithium-ion batteries. Tesla’s new large EVs are expected to further drive up lithium demand.
In recent years, there has also been a notable increase in Battery Energy Storage Systems (BESS), which are predicted to account for a dramatic 30% of lithium need by 2030. These systems are increasingly being deployed to stabilise and support electricity supply and are implemented across multiple industries, including mining operations, renewable energy sites, grid services, and data centres. With the rise of energy coming from intermittent sources — such as solar and wind — and the increasing shift from fossil fuels to electricity, the global appetite for lithium is only set to grow.
Healy says that the United States currently produces approximately 5,000 tonnes of lithium carbonate per year, and yet it consumes well above 200,000 tonnes.
“They are only producing 2% of what they need to make the batteries they consume,” Healy says.
He also shares that recent reports have predicted that by 2030 the demand for lithium in the US alone, on a lithium carbonate equivalent basis, could exceed as much as 600,000 tonnes per annum.
In response to the rising demand for multiple resources across industries, there has been a huge push recently in the United States to onshore its own critical mineral supply chain. This, in turn, means that projects like Red Mountain couldn’t come at a better time.
What’s next?
Healy shares that the Red Mountain Project is advancing momentum daily and the company has plenty planned for the future. The first point of call is to conduct further drill testing to improve confidence in the resource so that a Scoping Study can then be carried out. These assessments will enable the company to get a clearer picture of the mineral project’s economic potential.
Healy explains that under ASX listing rules, these studies cannot be currently completed on an inferred resource. Venari is hoping that this additional drilling will enable the company to upgrade the resource to indicated and measured categories, and then move forward with scoping by the end of the year.
Another key focus is investigating alternate means of lithium extraction. For sedimentary lithium deposits, processing accounts for between 60 and 90% of operating expenditure. Venari Minerals plans to undergo test work to explore substitutes for sulphuric acid in extraction; sulphur prices have risen dramatically over the years and there are several studies that suggest that there are more cost-efficient substitutes out there.
Healy shares that, alongside securing an optimal position next to a high-voltage transmission line, the company has also secured 590,000m3 of annual private water rights less than 6km from Red Mountain. Procuring these resources has de-risked the project significantly.
“In Nevada’s desert environment, you have to be cognisant of what a mine actually needs. And, of course, every mine needs water,” Healy says.
He goes on to add that securing this supply of water early in the project development has been a complete “game changer” for the company, “either that or you are leasing water from local ranchers and that can cost you an arm and a leg”.
No known substitute for lithium
Lithium remains unrivalled as a resource for premium high-performance batteries; there is no known substitute on the market which comes close to its energy density and lightweight performance.
As Healy notes, “if space or weight is a concern then lithium is the only way to go; it enables the highest energy density per unit of weight of any metal used in battery applications”.
If the need for lithium only continues to track upwards, then projects like Venari Minerals’ Red Mountain will continue to be paramount in stabilising supply. Developments of this nature are in the spotlight, for both the public and stakeholders, as they demonstrate clear significance to future energy storage solutions and wider technology supply chains.
Write to Delila Bevan Zavadsky at Mining.com.au
Images: Venari Minerals
