Lithium Australia Share Price up on Patent (ASX:LIT)

At time of writing, the share price of Lithium Australia NL [ASX:LIT] is up 4.17%, trading at 5 cents.

After some negative headlines, the LIT share price may have found some support at 4.8 cents:

ASX LIT Share Price Chart - Lithium Australia

Source: tradingview.com

We look at the company’s latest announcement.

LIT gets US patent for lithium extraction technology approved

Here are the key points from the announcement today:

  • SiLeach® patent approved by US Patent and Trademark Office.
  • SiLeach® provides for low-energy recovery of lithium from micas and clays.
  • The process is potentially a short-cut in the production of lithium-ion batteries.

LIT’s Managing Director Adrian Griffin was enthused by the step forward:

Granting of the US SiLeach® patent at a time of increased interest in the extraction of lithium from clays in north America is very timely … even more so as LFP is the most rapidly expanding sector of the LIB industry. Both the lithium and phosphorus required to manufacture LFP are produced by SiLeach ® as a single lithium chemical.

LFP stands for lithium ferro phosphate. LIT’s announcement today notes that ‘LFP provides a much safer alternative to more conventional LIB chemistries and does so at a much-reduced production cost.

Are LFP batteries the future?

As James Morris from Forbes mentioned in an article last month:

I’ve talked about the use of Lithium Iron Phosphate (LFP) batteries instead of Lithium Ion, which Tesla is already taking advantage of in partnership with CATL. These have the advantage of not relying on expensive, controversial cobalt. But they also don’t have quite as much density as Lithium Ion, so are better suited to static applications such as house batteries, where size and weight aren’t so important.

Instead, Tesla announced that it will be using more Nickel in its cathodes, eventually leading to the complete removal of cobalt. This will reduce the cost of cathodes by 15% per kWh. Tesla also plans to simplify the production process considerably, leading to a 76% reduction in process cost. This would have added benefits of using recycled water leading to no waste and enabling the use of more sustainably mined and sourced ores, with greater opportunities for recycling.

There are some second order effects of this move.

For one, I’ve noticed a significant boost in interest for companies with lithium projects in North America, such as Piedmont Lithium Ltd [ASX:PLL].

Two, there could be flow on effects in the long run for nickel.

LIT may benefit from the shift to LFP batteries in North America further down the track.

It will be intriguing to see how the battery story develops in the coming years — particularly in light of the upcoming outcome of the US election.

Regards,

Lachlann Tierney

For Money Morning

PS: This free report reveals three stocks that could surge on the back of renewed demand for lithium in 2020. Click here to get your copy now.


Lachlann Tierney is an Analyst for Money Morning and has been investing for nearly a decade. With a Masters of Science from the London School of Economics, he brings a sound understanding of global markets to his writing. Lachlann is interested in emerging technologies, energy solutions and helping people invest their money wisely. Recently he has been working with Ryan Dinse. Lachlann is involved in two publications:


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