INTERVIEW – Western Lithium Corporation (TSX-V:WLC) controls the largest known lithium deposit in North America. Western Lithium is preparing to supply the potential significant growth in demand for lithium carbonate, which is used in the next generation of lithium-ion battery powered electric and hybrid vehicles. The near surface lithium clay deposit is located in Nevada, USA and was initially discovered by the US Geological Survey and Chevron USA in the 1970’s. Engineering work completed by Chevron, and later by the US Bureau of Mines in the 1980’s, is now being advanced by Western Lithium towards a production plan to meet the expected increase in Lithium demand.
The major demand drivers for lithium is from the new generation of lithium-ion batteries for electric and hybrid vehicles as well as new stronger and lighter alloys. Lithium-ion batteries that were introduced for mobile electronics in the early 1990’s, now account for nearly 20 per cent of the market. Ceramics and glass account for another 20 per cent, lubricating greases 16 per cent, pharmaceuticals and polymers 9 per cent, air conditioning 8 per cent, primary aluminum production 6 per cent and other uses 21 per cent. Today, Western Lithium is developing a process concept and associated mining operation to position itself as a US-based supplier of battery-grade lithium carbonate for the automobile industry.
â€œOur current project timeline envisions completion of a scoping study later this year in parallel with resource delineation and metallurgical test work. This will lead to pre-feasibility and preliminary engineering design in 2010. A positive bankable feasibility study, permitting and subsequent construction could lead to production in 2013. This time frame coincides with projections of growing demand for lithium-ion batteries in the auto industry. In conjunction with this technical work, Western Lithium has also begun canvassing a number of potential lithium-ion battery makers to develop marketing and off-take agreements. Our US address is also proving to be advantageous over foreign producers in respect to securing long term supply contracts,â€ said Edward Flood, chairman of Western Lithium.
Western Lithium’s strategy to develop their lithium resources comes at a time when the market for hybrid, plug-in hybrid and electric cars looks strong as major automotive companies are reinventing their business models to meet fuel efficiency requirements for the future. The company points out that it is clear that America is setting policy to reduce its dependency on imported oil and moving towards the electrification of their economy with smart grids and renewable electrical energy supplies. Countries such as Japan and China are following a similar trend. In the past year, the Japanese government announced that they were installing quick charge stations in large cities to boost the use of electric vehicles. Today there are cars, motor scooters, boats and any number of electronic devices powered by lithium-ion batteries. The lithium-ion battery is clearly the choice for energy storage, both today and for the future,â€ said Flood.
Automotive Industries spoke to Jay Chmelauskas, President, Western Lithium Canada Corporation (WLC).
AI: How is your lithium processing concept coming along?
Western Lithium has a dedicated process test facility at Kappes, Cassiday and Associates (KCA) laboratory in Reno, Nevada. Metallurgical test work is underway at both this lab and at Hazen Research in Golden Colorado. The next steps for us are to finalize the process flow sheet and quantify estimated process operating costs, expected later this year, that will define our competitive position in the lithium market.
We are building on the work that was first carried out by Chevron and the US Bureau of Mines approximately 25 years ago.
AI: Will Western Lithium be able to meet the growing demand for lithium for use in lithium-ion batteries used in the auto industry? What time frame does your company have?
Our Nevada project is considered to be highly scalable with potential production that could place Western Lithium as the primary domestic North American lithium producer and one of the top five producers in the world. The historically estimated resource of 11 million tonnes of lithium carbonate equivalent is contained within five mineralized near surface zones that have the potential for development as market conditions dictate. Production capacity, from just one of the five zones, is planned initially for 20,000 tonnes per year, which is approximately one fifth of current world production. We intend to continue with our technical work so that our production plan meets the expected surge in demand over the next several years.
AI: Will your company’s location in Nevada help you secure long-term supply contracts in the US compared to foreign producers?
Every major auto manufacturer and supplier will likely want multiple sources of reliable, high quality lithium supply. We believe our project is of tremendous importance to the US and other purchasers of lithium carbonate who may be looking for geographical diversity of supply. Domestically, we can meet America’s lithium needs while also being perfectly situated to export to Asia. We are less than an 8 hour drive to the shipping ports on the US west coast and this gives us the flexibility to look for multiple large customers.
AI: Do you think the prices of lithium-ion battery packs (the most expensive component in electric cars) will come down in the near future? What do you think is the future of lithium-ion batteries in the automotive industry?
Everyone agrees the cost of batteries needs to come down in order to enhance the competitiveness of electric vehicles. However the cost of lithium accounts for less than 5% of the estimated battery cost today, so it is not a significant portion of the overall input cost. We firmly believe that as the technology matures we will see the same kind of price cycle that we’ve seen for other emerging technologies. For example, if you think about flat screen TV’s, when they first hit the market they were out of reach for most people at $10,000 and up. Today, through mass production and the phasing out of older technologies, the flat screen technology is relatively inexpensive. We believe that the battery technology will follow a similar lifecycle, bringing electric and hybrid cars within reach of the average consumer.
It appears clear that the future of powering electric and hybrid cars will be based on the lithium-ion battery technology which has the best charge to density ratio. Toyota has just announced that their next generation Prius Hybrid will come with a removable nickel metal hydride battery to allow for the replacement with a lithium-ion battery in the future. Nearly every major global auto manufacturer has a lithium-based battery project to power electric and hybrid cars.
With projections for hybrids to be offered for 100% of models from car manufactures such as Toyota over the next 10 years, the future for the lithium market, and Western Lithium, looks very bright.