Lithium is exploding but Canada's distance from China has miners at a disadvantage - lithium battery price

This spring, Nemaska Inc. 's chief executive, Guy Bourassa, returned to Canada from a trip to Asia, jet lag and fatigue --
It's still a few months before his company plans to sell lithium to South Korean battery maker LG Chemical Co. , Ltd. in Quebec.
"It seems to be longer than we expected," Bourassa said in an interview with The Financial Post this week on April, saying that Bourassa had finally completed the deal.
Starting from 2020, LG Chem will purchase 7,000 tons per year in five years, and his mine and conversion plant is expected to be put into operation.
One major stumbling block, he explained in an interview this week, is to find out where to get the "market" price of lithium.
Eventually, the parties agreed on a formula that not only considered the price of lithium in Asia, but also considered the third futures market that the London Metal Exchange plans to launch later this year.
Party newspapers and even import and export data.
"Since we started in this area, the main question is always what the market price is --
"What is the reference," Bourassa said . ".
"From one country to another, it's different from one deal, so it's about what's reliable and what's unreliable cultural discussion and vision.
"Of course, it would be much easier if his mine was located in Australia rather than Quebec.
The country is in the midst of a lithium boom, and Nemaska's development will be Canada's first new lithium mine project in years, when construction was completed by about 2020.
Because Australia is closer to Asia, and in Asia, major battery manufacturers and the emerging electric vehicle industry have turned to rising demand for lithium, says Mr Brasa, the mines there can simply ship hard rock lithium concentrate to a large number of buyers in Asia.
In contrast, his company had to set up an electrolytic plant to convert the lithium concentrate it mined into lithium hydroxide, a product with higher profits and fewer buyers there.
Only to create more sophisticated products
Lithium hydroxide-compared to lithium-pyroxene concentrate-
In Canada, he said, is it economically feasible to build a mine on the wrong side of the Earth.
"In Quebec, you can't compete with Australia in terms of selling concentrates," Bourassa said . ".
"You can't compare the two. one is to enter the market directly in China. in Canada, we can't enter --
We need to do the conversion, so (
Financing required)is bigger.
"Nemaska's shares traded at 86 cents on Friday, up this week but still below 52 cents. The weekly high of $2.
Like many other lithium producers.
The company raised money from investors in China, Japan and South Korea, not only building the mine, but also building an electrolytic conversion plant.
Due to the cost of capital,
Bourassa said it reached an agreement with buyers such as LG to ensure that the company was able to sell its lithium, which provided an important guarantee for some investors in Nemaska.
The distance between Canada and Asia, and the lack of transparency in the lithium market, not only slowed down Nemaska's commercial transactions.
Across North America, market analysts occasionally try to determine what's going on in the lithium market.
This week, Goldman Sachs released a study that said concerns about the excess supply of lithium, as well as the recent decline in lithium stocks, "excessive" and "excessive expansion "--
There was an implicit rebuttal to a widely cited report published by Morgan Stanley in February, which predicted that a lithium oversupply would take effect in 2019.
Goldman Sachs held the opposite view of analysts at Morgan Stanley, nine of which were listed in a February report that predicted a collapse in lithium prices.
"We expect the lithium market to remain tight enough to reward existing producers well," analysts at Goldman Sachs wrote . ".
But they point to two factors that make it difficult for the lithium market to analyze.
First of all, it is small, with production of about 200,000 tons in 2016 compared to steel, and production of about 1 ton per ton. 6 billion tons.
Second, China's economy is growing rapidly and is expected to double by 2025.
Goldman Sachs analysts wrote that these developments also made lithium "more valuable" and identified 10 projects that could be launched in the next few years --
Seven of them are in Australia, but none are in Canada.
The three remaining projects are in Chile and Argentina, where many Canada-
Listed companies seek development projects.
The companies plan to build huge salt pools, sometimes called lakes or Sarah, that rely on solar evaporation from desert heat to separate the lithium needed for batteries.
"It will take time," said John visbay, Vancouver's chief executive --
Li International Headquarters
A salt water project is being developed in Argentina.
"It can take two years to evaporate a lot, and you will be affected by the vagaries of bad weather --
If it is a cold winter, you will not have so much evaporation.
However, visbay says his project is located in a prime location.
However, if his company only owns the Mariana lithium project in Argentina, it can choose to purchase an additional 10 from its joint venture partner China.
Jiangxi Ganfeng Lithium Industry Co. , Ltd.
Limited company with the rest.
Mr Wisbey said that it was not easy for lithium to raise money from Western banks, which they thought was too risky.
Instead, he pointed out that they have been relying on partnerships, such as the cooperation between his company and Ganfeng, which is scheduled to be listed in Hong Kong, and is expected to raise $1 billion.
"It's great to be able to have a strong partner," Westbay said . ".
"On the other hand, I prefer to go to Citibank to borrow $0. 2 billion for a project . . . . . . So people don't need to cooperate.
"But the West lost because of it," he said . "