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From Ultralife web site:

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Tuesday, May 20, 2008

Galaxy extends Mt Cattlin feasibility study

Story link: Galaxy extends Mt Cattlin feasibility study by Gill Montia

Galaxy Resources, the Western Australian mineral resources company, has announced an update on its Bankable Feasibility Study (BFS) for the development of the Mt Cattlin Lithium/Tantalum project.

The company has reassessed the BFS parameters to include lithium carbonate production and is in the process of appointing an international engineering group to complete the lithium carbonate test work and process design.

In addition, discussions with several potential strategic marketing partners are taking place.

Drilling at Mt Cattlin in 2007 defined an initial Mineral Resource estimate of 24.8 million tonnes at

containing an estimated 2.03 million tonnes spodumene and 6.62 million lbs Ta2O5.

Included within the initial Mineral Resource is a higher grade Mineral Resource of 12.3 million tonnes at 14.7% Spodumene, 1.00 % Li2O and 135 ppm Ta2O5 (above a 4000 ppm Li2O cut off) for 1.81million tonnes spodumene and 3.80 million lbs Ta2O5.

It is expected that further planned in-fill and extension drilling will expand the Mineral Resource.

Current prices for spodumene concentrate grading 6% Li2O range from US$400 to US$500 per tonne, for tantalum concentrate from US$45 to US$50 per lb contained Ta2O5, and for lithium carbonate (Li2CO3) US$6000 to US$6500 per tonne.

Based on current prices the resource at Mt Cattlin is estimated to have an in-situ value in excess of $1bn with scope to be expanded.

A site programme testing the water table and flow rates in existing drill holes will commence during June.

The Babson College Fund's basic materials sector team analyzed Chilean specialty fertilizer company Sociedad Quimica y Minera de Chile (or SQM) (SQM - Cramer's Take - Stockpickr), a play on both the current positive commodities market and the red-hot Chilean economy.

According to portfolio manager Antonio Turner, there's plenty of demand for SQM's products. "In addition to its dominant share of the plant nutrient chemicals market (48% of the world market), SQM is the world's leading producer of lithium carbonate (34%) and iodine (33%). Lithium demand should perk up with increased production of hybrid cars, which use lithium batteries. SQM is also a play on increasing worldwide demand for fertilizer products because of higher demand for meat, and therefore grain."

However, SQM as a stock, is a different matter.

Turner and his team concluded that "SQM is fairly valued at its [current] price." How? "We used DCF analysis of SQM against its competitors, Mosaic (MOS - Cramer's Take - Stockpickr) and Potash," says Turner.

Continental sees 'good chance' for Volt win

Thu May 8, 2008 8:26pm EDT

By Kevin Krolicki

DETROIT, May 8 (Reuters) - Auto supplier Continental AG (CONG.DE: Quote, Profile, Research), in the hunt to supply advanced battery packs for the upcoming all-electric Chevrolet Volt, sees a "good chance" of winning that high-profile contract from General Motors Corp (GM.N: Quote, Profile, Research), the company's chief executive said on Thursday.

"We are positioned to be one of the major players in the automotive area," Continental Chief Executive Manfred Wennemer told Reuters.

........................

"It is not going to be decisive for the future of our battery unit, but it would be very, very important for us to be the one," Wennemer said of the contract for the Volt, which is expected to go into production in 2010.

"We think we have a good chance," he said.

GM is currently testing two competing battery packs for use in the Volt,

• one supplied by Continental, using battery cells developed by Massachusetts-based A123 Systems, and

• the other supplied by a division of Korea's LG Chem Ltd. (051910.KS: Quote, Profile, Research)

Energy Intelligence
Go Long On Lithium
Mark P. Mills 05.05.08, 2:48 PM ET

The focus on lithium is no accident. There are a plenty of options in the periodic table of electrically active, and thus useful, elements for making some form of glop that can store an electric charge, including aluminum, magnesium, nickel, iron, zinc, cadmium, vanadium, carbon, silver, sodium and mercury. But it is lithium that has emerged as the dominant approach that can meet the various tightly intertwined features high-energy batteries must accommodate.

General Motors (nyse: GM - news - people ), among numerous others, recently announced that its second generation of hybrids will switch to lithium battery chemistry. The timing of this switch was presciently forecast by GM's engineering director for hybrid powertrain systems, who said in December 2004 that it would be about three to five years before lithium batteries would become suitable for hybrid vehicles.

But lithium chemistry's exceptionally high energy density presents a unique challenge in its propensity for the reactions to become a little too enthusiastic. A few years ago, dramatic YouTube videos of a few events of self-immolating lithium laptop batteries demonstrated what engineers quaintly call "thermal runaway."

Truth is, having so few failures out of hundreds of millions of such very energetic batteries is a testament to a remarkable feat of engineering reliability, but still intolerable in our risk-averse world. Nervous, Sony (nyse: SNE - news - people ), Dell (nasdaq: DELL - news - people ), Panasonic and Apple all recalled millions of lithium batteries in 2006. Automakers are even more nervous.

Solutions to this safety challenge have emerged from entrepreneurs, manufacturers and inventors, even including Exxon Mobil (nyse: XOM - news - people ), in part through improved chemistry and materials, and in part through the ever-better domain of power electronics. The increasingly co-packaged smart power electronics that manage the attributes of electrochemistry, logically called a battery management system, now functionally eliminate a "runaway" or make it incredibly improbable.

This solution is conceptually identical to the increasing use of power-electronics for internal-combustion engine management systems. Witness the new world of "digital power."

And there are very promising new tricks in the specific chemical mixtures in lithium batteries. Perhaps most exciting is a switch in a key active ingredient, from today's cobalt, to iron phosphate. While using phosphate somewhat degrades overall lithium energy density, it yields remarkably more stable batteries that appear to have no more risk of self-immolation than your venerable lead car-starter battery. This piece of brilliant (nano) chemistry comes from Phostech, the exclusive supplier of the invention of professor John Goodenough at the University of Texas.

Lithium now begins a serious march up the power curve for all major big-energy markets for rechargeable batteries. Emblematic is Boeing's (nyse: BA - news - people ) selection of lithium for on-board backup power in the new Dreamliner 787, the same energy stored in a lead battery at one-fourth the weight, where weight is everything in aviation, even at Old Economy oil prices.

The existing global rechargeable-battery business is about $40 billion. Lead still owns almost half of this market and continues to grow, primarily for automotive starter batteries (think Asian markets), where it works just fine and remains the cheapest solution. But the lithium share is expected to nearly double to $6 billion by 2012.

Notably, lithium forecasts are not based on automotive penetration but are dominated by consumer and industrial applications, the latter, in descending order, for telecom, military and then medical equipment.

The giants in supplying lithium batteries, still mainly focused on the currently dominant consumer applications, include Sanyo, Sony and Panasonic. Other big names include Hitachi (nyse: HIT - news - people ), United Lithium (U.S. subsidiary of Yuasa) and Saft; the latter announced in January a joint factory with Johnson Controls (nyse: JCI - news - people ) to produce automotive-class batteries. There are as well significant (and portentous) producers in China, both private and public, including Advanced Battery Technologies, Huan Yu Power Source and Yungong Battery.

The venerable lead battery companies have seen the light. All have road maps and joint ventures to pursue lithium technology: Exide (nasdaq: XIDE - news - people ); EnerSys (nyse: ENS - news - people ), with majority ownership in Modular Energy Devices http://www.modenergy.com/ , a lithium pure play(all they seem to do is to series&parallel stack many tiny cells!); and C&D (nyse: CHP - news - people ) http://www.cdtechno.com/ http://www.cdstandbypower.com/ http://www.cdstandbypower.net/ https://corenet.cdtechno.com/ , with a new lithium-oriented battery research facility. (Don't expect to easily push lead batteries out of applications where weight and real estate don't matter much; they will for some time retain a real cost advantage.)

For investors, both public and private, the hot action takes place, as always, in the smaller pure-play companies looking to break in with innovation, especially those with tech claims on big-energy storage. For example: Lithium Technology (otcbb: LTHU.OB - news - people ); UltraLife Batteries (nasdaq: ULBI - news - people ); Ener1 (nasdaq: ENON - news - people ) (HEV, for IB), a holding company involving Delphi (other-otc: DPHI - news - people ) and Japan's Itochu (other-otc: ITOCY - news - people ); Altair Nanotechnologies (nasdaq: ALTI - news - people ) and Valence Technology (nasdaq: VLNC - news - people ).

There is as well a growing list of private players around the world chasing the big-energy lithium market, from Korean subsidiary Kokam America to the U.K.'s FiFe Batteries, and Canada's Advanced Lithium Power. In America companies like A123 and Boston Power, two venture-funded MIT spin-outs, are often in the news. Lesser known, but of interest, are Lion Cells in California's Silicon Valley and International Battery in New Jersey's industrial alley, the latter bringing on-line in May a U.S. factory for large format, real heavy-iron storage (full disclosure: We are an investor).

In the near term, watch for traction for these players in established electric-hungry domains experiencing rapid growth in demand for serious quantities of backup and off-site power. Google's (nasdaq: GOOG - news - people ) data centers, Verizon's cell towers, Comcast's (nasdaq: CMCSA - news - people ) cable networks and Gen. David Petraeus' tech-centric troops. All these and many more have a willingness, and a significant appetite, for lots more electric energy stored on-hand, in less space, and are consequently most likely to adopt and pay first for the new heavy-iron lithium.

Still with news like the new Tahoe SUV hybrid, sales of the Toyota Prius on a tear and hot oil prices, the hybrid automotive market is an unavoidable driver for battery interest, if not hype. So another reality check is instructive. That battery that can run your laptop on a cross-country flight has enough electricity stored to drive a hybrid car 100 feet. That's why the all-electric Tesla has 8,000-plus laptop-type batteries stuffed inside, and why automakers are looking for big, not laptop-sized, lithium batteries. Which brings us to some practical considerations.

Fill a tank with 100 pounds of gasoline, and even a dreaded SUV will haul you 300 miles before stopping for a 15-minute refill. The same 100 pounds of lithium yields 40 miles. (The 100 pounds in lead goes 10 miles, and nickel, today's hybrid choice, just 15 miles.)

100 Pounds of Fuel in an SUV

The 40-mile forecast range for GM's to-be-produced revolutionary Volt hybrid makes sense in this context and illustrates why hybrids make much more sense than all-electric. All-electric vehicles contemplate a half-ton of batteries. Yikes.

Still, various forecasters see rapid growth in worldwide hybrid vehicle production. Something to think about: If only a few percent of the world's annual automotive production switched overnight to hybrid electric, this would require all of the planet's lithium batteries now used for electronics.

It's going to take a whole lot of new battery factories to supply even a tiny share of the automotive market. Certainly possible, and obviously tantalizing to battery makers and investors: It will also take a whopping pile of mined raw lithium minerals to meet such demand. The world doesn't have anywhere near enough current production of lithium carbonate (the starting mineral for batteries, also used in ceramics, lubricants and alloys). Sure, more mines can be opened. This takes time, and those mines are, and will be, in interesting locations.

Nearly 90% of the world's raw lithium carbonate comes today from just three countries: Chile, Argentina and China. With Bolivia holding the world's largest (still untapped) lithium resources, South America utterly dominates the future supply of lithium carbonate. Widespread use of hybrid and electric vehicles would make South America a new epicenter for transportation fuel resources, rivaling the Middle East.

The geopolitics of this geophysical reality are, to say the least, intriguing, not to mention the investment required to scale mineral production to meet such battery demand. Funny how the high-tech world keeps coming back to Old Economy dig-it-out-of-the-earth commodities in various challenging parts of our planet.

If you're looking to invest in the future of transportation, you should, as the traders say, be "long" oil; it will remain king for some time. If you're excited about the future of the ever-more digital and electric economy, you should be long lithium carbonate, and lithium batteries.

Written by Mark P. Mills, a physicist and a co-founding partner in Digital Power Capital, an energy-tech venture fund. Mills is also co-author of The Bottomless Well: The Twilight of Fuel, the Virtue of Waste, and Why We Will Never Run Out of Energy (Basic Books, 2005). Mills may hold positions in companies discussed in this column, and may provide technology assessment services for firms that have interests in the companies. He can be contacted at inquiries@digitalpower.com.

mmmm

May 1, 2008 |

The Chevy Volt is making some big promises, will its battery match the hype?

By Matt Jansen

Though Chevy hasn’t officially chosen battery supplier for its upcoming Volt, A123 Systems is a strong contender.

A123's Batteries For The Prius Are Just Around The Corner

On Tuesday, A123 Systems announced that it has started taking online orders from those Toyota Prius owners who want to switch from hybrid to plug-in hybrid. This can now be done by getting the new L5 battery module. However, it isn’t the cheapest of operations, as the battery and installation cost $9,995, to which $400 are added for taxes and a "destination fee." A date when the battery is to be made available hasn’t been announced yet.

Drivers of Prius models made between the years 2004 and 2008 will be able to place the battery in the spare tire slot in the trunck. According to A123 Systems, the extended-life battery comes after 200,000 miles’ testing in "real life" conditions, and by using it, cars may get as much as 100 miles per gallon of gasoline.

As Felix Kramer, founder of CalCars.org, says, there aren't that many plug-in hybrid cars cruising the U.S. roads at the moment and most of the owners are research institutions.

Companies such as GM and Toyota have been working on the development of plug-in hybrid vehicles but it seems that the technology is still too expensive to be implemented it at a larger scale. For those currently using it, the environmental issue is probably more important than that of gas money savings.

Toyota sold 2.621 million cars in the US in 2007, surpassing Ford Motor Co for second place behind GM. A spokesman said that sales of 2.69 million vehicles are expected in 2008. At the beginning of the year Toyota officials restated the company’s commitment to bring plug-in hybrids on the market by 2010.

GM Aiming For 2010 Launch Of Its Electric Car

Posted on: Monday, 21 April 2008, 11:25 CDT

Engineers at Chevrolet continue to scramble in order to meet an internal target to complete a vehicle that will allow users to plug into their household outlet after a day of driving.

Rick Wagoner, Chief Executive of GM, said on Sunday that the company is nearing a decision for the supplier of its battery packs, which will power the Concept Chevy Volt.

"At this point the focus for us 100 percent is getting the Volt produced in the U.S.," Wagoner said. "So far, so good, but it's going to be right down to the wire to meet the production deadline we've set."

The target year of 2010 is forcing GM to continue its development of the Volt while conducting experimental tests on the battery systems, which will allow the car to recharge while driving.

The Volt will be able to accommodate drivers who travel up to 40 miles daily on its 400-pound lithium-ion battery pack.

“For longer trips, Chevy Volt's range-extending power source kicks in to recharge the lithium-ion battery pack as required

. We expect a driving range of an estimated 640 miles,” a Chevy statement said.

Chevrolet isn’t alone in their hope to produce a new electric car. Toyota is currently working on the same technology.

“We have devoted significant resources to this project: Over 200 engineers and 50 designers are working on the Volt alone, and another 400 are working on related subsystems and electric components. That’s how important we think this is, and that’s how much stock we place in the future of extended-range electric vehicles like the Chevy Volt,” said Tony Posawatz, Vehicle Line Director for the Chevy Volt.

The battery packs being tested by GM are supplied by a subsidiary of Korea's LG Chem Ltd against the performance of a rival pack built by German auto parts supplier Continental AG using technology developed by privately held A123 Systems.

Wagoner said GM will make a decision for battery suppliers soon, adding that GM could opt to give one of the Volt bidders the battery contract for the vehicle while keeping the other in the game with a separate development contract.

"You have to make a choice, but you don't have to make a lifetime choice," Wagoner said. "My sense is that you can make lithium ion bets today, but the outlook is far from certain."

GM is set to release 16 new hybrids over the next several years, including the hybrid Buick LaCrosse, which represents the second hybrid in the fast-growing Chinese market after Toyota's Prius, but the first assembled locally.

GM executives said this week that it was important to demonstrate a commitment to hybrid and other technology aimed at boosting fuel economy and reducing emissions in China at a time when government policy makers face pressure to reduce oil consumption and improve air quality.

Wagoner said China should consider a range of policy moves including tax credits and a commitment to developing a hydrogen refueling infrastructure that could power fuel-cell vehicles and be supplied by the dozens of nuclear power stations the nation intends to build to reduce its reliance on imported oil.

01.08.2007

The natural resources boom has triggered investor interest in little-known but important minerals such as lithium.

This soft, silver-white metal is used in the manufacture of pharmaceuticals, lightweight alloys for aircraft, glass, heat-resistant cookware, high-spec lubricants, airconditioners, synthetic rubber and aluminium.

But its most exciting use is in rechargeable batteries.

.........................

Major automobile manufacturers have announced plans to switch from nickel cadmium to lithium-ion batteries for their future generations of hybrid electric vehicles, and there is increasing prospect of their use in plug-in pure-electric vehicles.

Such uses “could create tremendous increases in demand for lithium,” says the US study.

Price data for lithium is not readily available as the metal is not traded on public exchanges, but one industry source claims the price of lithium carbonate – the most important internationally-traded lithium compound by volume -- has doubled this year, to $5,500 a ton, driven by strong demand for rechargeable batteries.

World production of lithium is only some 22,000 tons, the biggest suppliers being Australia and Chile.

It’s very difficult to invest in lithium. I have not been able to find any pure plays. However, here are two stocks to consider.

Two stocks to gain access to lithium

The Chilean company SQM, listed in Santiago and in New York ADRs, has the Canadian fertilizer giant Potash Corp. of Saskatchewan as its godfather, with a 36 per cent interest.

SQM owns vast resources of lithium, nitrate, iodine and potassium minerals in Chile’s Atacama desert. It controls more than a third of the internationally-traded market in lithium.

Trouble is, the company only gets 12 per cent of its sales from lithium. It’s predominantly a supplier of fertilizers and iodine.

Nevertheless, SQM seems to be a well-managed company that you might want to have a piece of, despite that limited exposure to lithium. Its sales topped $1 billion last year. Net income reached $141 million, having grown at an average annual rate of 37 per cent over the past four years.

Although the shares are currently trading on a price-earnings multiple of 28x, with a twice-covered dividend yield of only 1.5 per cent, the chart looks good, suggesting that investors are buying into the company’s fertilizer and lithium growth prospects.

Much more speculative is Admiralty Resources, listed in Australia. ASX:ADY

It is developing two major projects in South America – Rincon Salar in Argentina, estimated to contain 1.4 million tons of recoverable lithium and 2.5 million of potash, and due to come into production in a year’s time, and Santa Barbara in Chile, an iron ore mine that’s about to start up.

AR is still running big losses, but investors obviously believe those will evaporate, as an initial $200 million of annual revenues start to flow in from the two projects.

The share price has quadrupled this year and the chart looks great.

If anyone knows of a better way to invest in lithium, let me know and I’ll pass it on to readers.

By Martin Spring in On Target, a private newsletter on global strategy