Albermarle to be restructured following Rockwood acquisition

By Adam Page
Published: Wednesday, 21 January 2015 on http://www.indmin.com/

After completing its merger with lithium producer Rockwood Speciality Holdings Inc. last week, speciality chemicals producer Albemarle is now focusing on having a flexible and forward-looking lithium strategy.

US-based Albemarle Corp. is being re-structured into three global business units; Chemetall Surface Treatment, Refining Solutions and Performance Chemicals.

"The new company will be structured to leverage its complementary fit, especially between lithium and bromine, allowing us to capitalise on our long-term lithium strategy while providing immediate scale and ability to leverage its similarities with bromine," said Luke Kissam, Albemarle's CEO.

Chemetall Surface Treatment will supply products for metal pretreatment. The company's lithium and bromine businesses meanwhile will sit in its Performance Chemicals business arm, as this will supply speciality chemicals to the industry as well as fire safety solutions.

The Refining Solutions business arm will consist of the heavy oil upgrading and clean fuels technologies businesses, which could also see some bromine usage, as the company is developing clear brine fluids, used in offshore drilling and water treatment.

Each unit will have a dedicated teams of sales, R&D, processers, manufacturing and sourcing and business strategists.

Rockwood’s investors 

Albemarle has proposed changes to investors regarding the material terms of the security agreement relating to a set of senior notes issued by Rockwood Specialties Group Inc. The new arrangements would enable Albemarle to file periodic reports with the Securities and Exchange Commission (SEC) and make such filings available to investors.

Albemarle completed its acquisition of Rockwood Holdings on 12 January 2015, in which Rockwood became a wholly-owned subsidiary of Albemarle. It also led to Albemarle fully and unconditionally guaranteeing the senior notes.

As of 16 January 2015, there are $1.2bn worth of of senior notes outstanding. Both companies are offering to pay each shareholder a cash payment of $2.50 per $1,000 worth of notes.

Orocobre says that lithium oversupply will not be an issue as it moves towards commercial production

By Adam Page
Published: Friday, 06 February 2015 on indmin.com

Orocobre is at the last stage of its qualifying process and it is hoping that within a few months it can begin commercial production and become a major global lithium supplier. It says that last year’s fears about lithium oversupply have not come to fruition because it is one of the few juniors to deliver results.

ASX and TSX-listed Orocobre Ltd. has said that it will be able to be a profitable player in the lithium market, dismissing fears expressed by established companies that newcomers like itself will saturate the market.

James Calaway, Orocobre’s North American chairman, told IM that, "we have a fairly robust growth in demand across the world."

"There is a little bit of expansion going on in China but as for the rest of the world, there is really no material increase," Calaway added.

Calaway says that when lithium prices were being negotiated for 2014 there was an impression amongst end-users that the lithium market would be oversupplied. He said that this led to customers "feeling muscular" when in negotiations but Calaway feels this has changed now.

"End users are more concerned with securing supply rather than price," Calaway explained.

Companies like Sociedad Química y Minera de Chile (SQM) has said it is worried about new suppliers disrupting lithium prices and saturating the market.

"What we see is a stable situation in the sense of volumes and in the side of SQM we see a strong market growing," Patricio Contesse, CEO of SQM, said during a conference call for its Q3 2014 results.

"[There have been announcements] of newcomers this year that have not been successful given they are in the equivalent of the Chapter 11 in Canada," Contesse added, referring to RB Energy, which halted all operations at its Quebec lithium project at the beginning of October 2014 and temporarily dismissed staff after it failed to secure the funding required to maintain operations.

$39m in new investment

Yesterday, Orocobre announced that it has raised approximately A$50m ($39m*) through an A$40m placement to domestic and international investors and a $10m underwritten share purchase plan.

Orocobre outlined that A$28m of the proceeds will fund the operations of its Olaroz lithium plant in Argentina, which was ramped up to commercial production within the last week.

"We are very pleased with the result of the raising in what are difficult conditions for resource companies," said Richard Seville, Orocobre’s managing director.

"We are now well funded to take Olaroz and the company through to the next stage of development, becoming a profitable operating company," Seville added.

Approximately 15.7m shares will be issued pursuant to Orocobre’s 15% capacity on the ASX, at a price of A$2.55/share. This is still subject to shareholder approval, which will be assessed at a general meeting in March.

The company is also announcing a share purchase plan which will be capped at A$15m, of which $10m will be underwritten. Shareholders will be invited to invest up to $15,000 each.

"Although we welcome some new shareholders onto the register, we are honoured by the ongoing support we have received from our existing shareholders in this raising. We will continue to work hard to build on the shareholder value that we have delivered to date," Seville said.

Olaroz plant

Orocobre says that its Olaroz plant has approximately 20,000 tonnes of lithium carbonate equivalent (LCE) in the pond system. It also claims the lithium inventory is growing at around 2,100 tpm LCE, according to current well pump rates.

"The majority of our material will be going to Japan, Korea and the US," James Calaway, Orocobre’s North American chairman, told IM.

"We will not only be supplying end users but also large producers, who are needing more supply," Calaway added.

Lithium demand is forecast to rise thanks to growing acceptance of electric vehicles (EVs), consumer electronics and energy storage.

In November 2014, Olaroz started producing primary lithium carbonate. Since then, the focus has been on commissioning the purification and drying/micronising circuits.

Since April 2011, Olaroz’s pilot plant has been distributing lithium carbonate to customers which Orocobre say will make the approval process a maximum of three to six months.

Toyota Tsusho Corporation, the company’s project partner, has finalised several customer contracts for 2015 output and it expects that the remainder will be completed during the first half of 2015.

Orocobre is now considering whether to increase the life of Olaroz with its phase II expansion. It is also looking into developing its other lithium assets in Argentina.

*Conversion made February 2015

Simbol Materials cuts jobs and halts activity at demo lithium plant

By Adam Page
Published: Thursday, 05 February 2015 on indmin.com

Simbol says that it is now seeking investors to help it commercialise its lithium production. However, EnergySource, the provider of its brines, says that it will take a different management team to realise the potential of Simbol’s lithium extraction process.

US-based Simbol Materials LLC has ceased activity at its Hudson Ranch geothermal lithium carbonate plant in Calipatria, California, US, and made 40 of its workers redundant.

Simbol said that operations have been inactive since December 2014.

"We completed the engineering studies and we are now in the mode of collecting investment infrastructures," Simbol’s CFO, Pete Sunada told IM.

"We thought we did not need to spend any more money on the operation at this point in time," Sunada said, adding, "nobody would start an investment discussion once the engineering is completed. It goes in parallel so it is ongoing," Sunada explained.

However, according to EnergySource, a renewable energy company that has provided Simbol with the geothermal brine used to test its lithium-extraction process, Simbol ran out of funds for the operations.

"We understand that last week, Simbol terminated senior management and most of the staff," Dave Watson, EnergySources CEO, told IM.

"Remaining Simbol employees are currently in the process of shuttering the demonstration facility they operate adjacent to our John Featherstone geothermal plant," Watson added.

Amongst those made redundant was David Edwards, Simbol's director of manufacturing. He follows Simbol’s CEO John Burba, who resigned last week.

Watson said that while EnergySource was disappointed with the latest news from Simbol, he said it was not surprised.

He told IM that previous management had failed to effectively implement the strategies necessary to achieve lithium extraction at the Hudson Ranch project, despite using "proven" technologies.

"We remain hopeful that new ownership and management sees the potential of the Simbol technology and we stand ready to support a new effort that demonstrates good prospects for success," Watson said.

Simbol’s plans

Last month, Simbol said that it would start construction on its first commercial lithium extraction plant at Salton Sea in California’s Imperial Valley, according to local newspaper The Desert Sun.

It said it wanted to produce 16,000 tpa lithium carbonate equivalent (LCE) from its 50MW power plant.

Simbol has already demonstrated its geothermal method at the plant, which will extract lithium, manganese and zinc to be transformed into materials suitable for batteries by using by-products from the plant, such as CO₂, waste water and condensate. According to Simbol, this is less dependent on weather conditions than the solar evaporation technique used by the majority of lithium brine producers.

"We believe Simbol’s technology is viable and proven at the demonstration facility," Watson told IM.

Watson suggested that new ownership would be the best option for company to realise its commercial objectives.

"We would expect a new ownership team to pursue a purchase of Simbol and its assets, as well as a transaction with EnergySource," Watson added.

In 2011, Simbol began operating its high-purity lithium carbonate demo plant and has already provided manufacturers with lithium carbonate and hydroxide to be tested in the cathodes of lithium-ion (Li-ion) batteries.

Towards the end of 2013, the company succeeded in producing lithium carbonate with a purity in excess of 99.9% using geothermal brine at its demonstration plant located near the Salton Sea.

The brine Simbol will be using is rich in sodium chloride, meaning it can avoiding buying in soda ash as a feedstock ingredient. It says that because the plant is close to sea-level and to port means that it doesn’t have to ship brines to a secondary processing facility.

The company is seeking to supply the electric vehicles (EV), energy storage applications and electronic goods markets that are after Li-ion batteries. It is anticipating a massive growth in demand from the Asian market.

In 2010, Japanese trading house Itochu Corp. acquired a minority stake in Simbol securing the sole rights to market Simbol’s future products in Asia.

Lithium-ion batteries looking to store the green revolution, not just to drive it

By Adam Page
Published: Wednesday, 24 December 2014 on indmin.com

California is following Hawaii’s lead in using lithium-ion phosphate batteries to storage its energy. The Golden State is aiming to install 1.3GW of storage by 2040 and CODA Energy is taking the first steps with this.

US-based CODA Energy’s behind-the-meter lithium-ion phosphate energy storage system in the Los Angeles basin is now interconnected and operational. The 1,054kWh/510kW system is comprised of electric vehicle (EV) battery cell packs.

"CODA Energy set high goals for this year. We now have proven solutions that cover the full spectrum of our commercial and industrial customers’ needs for peak power and energy," said Peter Nortman, CODA Energy’s COO and CTO.

The project was developed under a contract with South Coast Air Quality Management District (AQMD) and co-funded by California’s Self-Generation Incentive Program (SGIP). The project hopes to demonstrate the scalability of CODA Energy’s peak shaving product architecture by managing demand charges for its facility headquarters in Monrovia, California.

Light up the sky: CODA Energy will be powering the Los Angeles basin with an energy storage system powered by Li-ion phosphate batteries.

"Our behind-the-meter active and interconnected storage systems range from a 40kWh UL listed energy storage appliance to this 1,054 kWh scaled and tailored aggregation solution," he added.

The system is comprised of two networked and aggregated multi-tower systems that can operate in concert or deliver independent services. CODA hopes its scalable hardware and proprietary networking software gives its system configuration ample flexibility and the potential to operate across a local or regional level.

New storage market

At this year’s Battery Show in Michigan, speakers underlined the importance of diversifying the use of lithium-ion (Li-ion) batteries, like those being used by CODA. Enersys’ president, Dave Shaffer, insisted that battery producers must be geographically and technically adaptable to preserve the future sustainability of the market.

John Gagge, vice president for reserve power sales and service at EnerSys Americas, highlighted the growing energy demands of major cities and emphasised that there was a major opportunity for energy storage providers.

Archan Padmanabhan, stationary energy storage specialist for EV maker Tesla Motors Inc., spoke of the company’s drive to develop stationary energy solutions that will allow Tesla to meet its target of enabling widespread, sustainable transportation.

"It’s not just important to have EVs on the road, but to have them charged by cleaner sources of energy," said Parbmanabhan.

French battery maker Saft is currently developing a Li-ion energy storage system for the Hawaiian island of Kauai to regulate its electricity supply from renewable sources. The rest of Hawaii is seeking to transform its energy distribution system by 2017.

At the Battery Show, Kamen Nechev, chief technology officer at Saft, said that while performance advantages and storage ability remain key determinants of battery demand it will ultimately be costs that define whether the technology is viable.

The high cost of R&D and the varying demands of the technically multifaceted industrial sector are major obstacles that need to be overcome for projects to be workable. As a result, new sources of raw material are likely to be needed to prevent price inflation as demand from the battery sector grows.

FMC Corp.records higher minerals revenue and earnings in Q4 2014

By Adam Page
Published: Thursday, 05 February 2015

FMC has been a leading global producer of lithium and soda ash for several years. With the sale of its soda ash arm it has now concentrated its mineral focus onto lithium which it believes will enjoy an uptake in prices as interest in energy storage picks up.

US-based FMC Corp. has reported record soda ash production for the final quarter of 2014, while its lithium operations continue to improve, despite the challenges it faces at its facilities in Argentina.

According to its full year 2014 results, released late yesterday, FMC’s minerals segment recorded earnings of $166.7m in 2014, a 30% rise on 2013. During Q4 2014, earnings reached $47.9m, a 32% rise compared to Q4 2013.

Lithium revenues for the three months ending December 2014 were 3% lower when compared to Q4 2013. However, revenues for the full year were up 15% and earnings in the business were up approximately 125%, due to strong operational performance and higher volumes.

Last year, restructuring cost the lithium segment $9.1m, while the continued work at an environmental site incurred a corporate charge of $6.2m.

Speaking during a conference call today, Pierre Brondeau, CEO of FMC, said that its lithium portfolio had been "mixed" in 2014. He stated that there was an increasing interest in lithium, leading to a "tightening in carbonate supply and demand."

FMC did not disclose its lithium and soda ash production levels in its quarterly results.

Overall, the company posted revenue of $1.1bn in Q4 2014, a 3% decline on the previous year.

Shifting focus

With the agreed sale of its Alkali Chemicals business — the largest natural soda ash producer in the world — to Tronox, FMC will change its name to FMC Lithium.

Brondeau said that this was part of a wider company strategy to create "a more focused portfolio."

"In Lithium, we are optimistic that demand for downstream products, particularly for energy storage applications, will continue to grow rapidly," said Brondeau.

FMC anticipates higher prices for lithium hydroxide and carbonate based on the fact that the energy storage sector is growing at double digit rates. It expects earnings to be in the range of $15m to $25m in 2015.

The company produces a variety of lithium chemicals at its Hombre Muerto operation in northern Argentina. It noted that operational costs have been hit by Argentina’s import restrictions, which make it difficult to deliver certain critical engineering components.

"Despite strong underlying performance in our lithium business, we are unable to produce consistent results across multiple years due to the challenges of operating in Argentina's high-inflation environment," Brondeau said.

"We want to reduce costs as much as possible," Brondeau added, noting that, "adverse currency conditions in Argentina could be a significant headwind to earnings".

Brondeau also said that FMC would continue to take an interest in the electric vehicles (EVs) market despite a decline in energy prices.

"Gas prices are not the drive when you decide to buy a Telsa; it is part of it but it is not the driver," Brondeau said, pointing out that those who were likely to be interested, "will look beyond one year gas prices".

FMC expects the agreed sale of Alkali Chemicals and the agreed purchase of Denmark-based agricultural supplier Cheminova to be completed in Q1 2015. FMC believes that the sale can cut its debt pile following its $1.8bn purchase of Cheminova in September 2014.

Companies seek new lithium opportunities in Chile

This was initially published here on 30/01/15: http://www.indmin.com/Article/3422950/Companies-seek-new-lithium-opportunities-in-Chile.html

It was also republished on a blog by Juan Carlos Zuleta for EVworld: http://evworld.com/blogs.cfm?blogid=1308

The Chilean government and lithium producers want to secure public-private partnerships as they seek to exploit the world’s largest lithium reserves. The move has brought optimism back to Chile’s mining sector. 

US-based Albemarle Corp. and Li3 Energy have welcomed the new opportunities being offered by the Chilean government to develop the country’s vast lithium reserves.

On Tuesday, Chile’s National Lithium Commission advised the government to develop public-private partnerships, which will allow the state to control the mineral while enabling companies to rent lithium-producing properties.

"What the Commission did is to ratify the non-concessional character of lithium for old and new operations in Chile," Juan Carlos Zuleta, a lithium economist, told IM.

"[This] implies the need for private companies producing and interested in producing lithium to continue to sign contracts with the Chilean State to produce lithium," Zuleta added.

Li3 and Albermarle have both expressed interest in working with the Chilean government. "We applaud the work of the Commission and look forward to working with the government to promote the development of new lithium projects in Chile," said Patrick Cussen, chairman of Li3. 

"This will allow us to continue moving forward with our flagship Maricunga project," Cussen added. Chile is looking for more value-added activities as new projects are developed in the lithium sector. However, this will not affect current exporting activities or existing contracts.

Albemarle also has a stake in Chile’s lithium after merging with US lithium producer Rockwood Holdings Inc. Its CEO, Luke Kissam, was in Chile earlier this month to meet with Chilean officials and mining stakeholders. 

"Going forward I think they will develop a state entity to manage the development to future lithium projects and they are looking for participants who are interested in doing that, with a track record in the industry which is very positive from a Albemarle and Rockwood standpoint," Kissam said during a conference call yesterday.

According to the US Geological Survey (USGS), Chile has more than 57% of the world’s lithium reserves and it is the second largest producer in the world. 

Kissam says his company expects to be operating in Chile "forever." Albemarle now has access to Rockwood’s lithium carbonate sourced from the La Negra facility, based on natural brines from the Salar de Atacama, which Albemarle expects to be operating at until around 2030. 

Kissam said Albermarle want to shift work to higher-value applications away from technical grades. To achieve this it aims to increase its lithium carbonate capacity by mid-2015.

The company wants to look beyond developing the salars and getting involved in state research and development enterprises to help produce new uses for lithium. 

"We stand ready and able and we think we are in the best position to collaborate with them now, as well as in the long run allow us to be their preferred partner," Kissam said.

 Li3 Li3’s Maricunga lithium project covers approximately 1,888 ha (km²) in the northeast section of the Salar de Maricunga in Chile, the second largest salt flat in the country.

The company is in partnership with South Korea-based POSCO, for the development of a lithium direct extraction technology, which has so far achieved over 80% recovery of lithium carbonate in less than eight hours of processing Maricunga brine.

Last February, market intelligence SignumBOX, ranked the project as the 4th best undeveloped lithium project in the world out of the 37 brine projects. Last year, Li3 made the final payment for the Cocina 19-27 properties in the Maricunga Salar, adjacent to our existing Litio 1-6 properties that have an identified NI 43-101 compliant resource. 

Better luck this time?

The previous government under Sebastian Pinera tried to open up Chile’s lithium reserves in the Atacama Desert in 2012. In September 2012, a bid by Sociedad Quimica y Minera (SQM) was accepted, beating off competition from Li3 Energy and local juniors. However, it was declared void in October 2012 after it emerged that SQM had several lawsuits pending against the Chilean state.

On Monday, Pablo Wagner, the former deputy for the mining minister and his legal counsel, Jimena Bronfman, were indicted by a Chilean court accused of falsifying documents for SQM’s bid that failed to mention the lawsuits.

However, optimism and desire for growth is back in Chile’s lithium sector, a matter that President Michelle Bachelet included in her presidential manifesto. "We expect there will be interest from companies considering that now the rules of the game will be sufficiently clear and transparent," Zuleta told IM.