Lithium miners hunt for capital as demand for metal climbs

Mon Mar 7, 2016 3:35pm EST
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By Rod Nickel

TORONTO, March 7 (Reuters) - Climbing demand for the metal lithium at a time of broader commodity weakness has Canada's Nemaska Lithium Inc and Western Lithium USA Corp confident they can soon obtain scarce capital even as other junior miners struggle.

A scramble to secure lithium has accelerated as prices have risen, driven by demand for smartphone, laptop and electric car batteries.

"Everyone can see the writing on the wall as we move toward 2020, and a need for new deposits to get into production," said Jon Hykawy, president of consultancy Stormcrow Capital. "Problem is, the capital really isn't there."

But Western, which aims to bring the world's next new lithium resource into production in 2018 in Argentina, is optimistic.

"What we're really seeing is the equivalent of another industrial revolution, the switch to electric power for automobiles," Chief Executive Officer Tom Hodgson said at the Prospectors & Developers Association of Canada (PDAC) convention in Toronto. "Given the fundamental shift in energy demand, nothing's easy, but (raising capital is) very doable."

Vancouver-based Western's $314 million project would pump brine to the surface for evaporation.

Western says one of its advantages is a commercial agreement it is negotiating with South Korean steelmaker Posco , a potential joint venture that would deliver Western's lithium to the doorstep of South Korean battery manufacturers LG Electronics Inc and Samsung SDI .

Nemaska Lithium Inc, developing a mine in the Canadian province of Quebec, expects to raise the C$521 million ($392.14 million) it needs within a year, Chief Executive Officer Guy Bourassa said, adding it has one of only three undeveloped projects in the world with full permits.   Continued...