Arizona Lithium [ASX:AZL] Shares Fall as Lithium Research Centre Plans Revealed

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Arizona Lithium [ASX:AZL] plans to establish a ‘world class lithium research centre’ in Arizona focused on lithium extraction and future battery tech.

Plans for the research centre weren’t well-received, as AZL shares fell 7% by late Monday afternoon trade.

AZL wasn’t the only lithium stock to fall, however.

At the time of writing, Lake Resources is down 14%, Core Lithium down 7%, Sayona Mining down 7%, and Novonix down 6%.

In the past month alone, AZL is down nearly 40% as the lithium sector cools.

ASX:AZL arizona lithium stock chart

Source: Tradingview.com

AZL’s ‘World Class’ Research Centre

Arizona Lithium released a company update whereby it signed a new lease for a ‘world class Lithium Research Center’ in Tempe, Arizona.

The lease will last five years, in which time it will function as a ‘technology incubator focused on the extraction of lithium from a variety of ores and brines’.

The centre will also be used to produce ‘battery-grade lithium chemicals for current and future battery technologies’.

AZL’s new research facility consists of 1,900 square-metres that the company will use for R&D, and 3,000 square-metres for prototype processing.

AZL’s CTO, Brett Rabe, which the company emphasised has the relevant management and engineering experience, will lead operations.

The company said EV-specific lithium companies, US-based investors, and government officials have taken interest in the facility, and that the centre will assist in development of the company’s Big Sandy and Lordsburg Projects.

Rabe said:

We are delighted to announce the lease for this world class Lithium Research Center in one of the top destinations for EV and battery production in the world. We are already significantly advanced in the design of the facility and are currently procuring equipment, with staff recruitment also underway. We look forward to working with ore from the Big Sandy resource, and I am confident that the AZL Research Center will act as a hub for technological advancement in the lithium industry and strategic collaborations.’

AZL’s Managing Director Paul Lloyd added:

We will use this Research Center to refine our flow sheet based on the previous test work undertaken by Hazen Research, and also explore new technologies. With the recent appointment of Brett Rabe as Chief Technical Officer, we have a fantastic leader for this project, and we are excited to see it in operation later this year.

AZL share price and lithium’s growing prospects

Lloyd believes AZL’s lithium research centre is a smart move that can pay off in the future:

Today marks a significant milestone for the development of Big Sandy and for what we believe to be the lithium industry as a whole.

We have signed a long-term lease for the development of a Research Center that will initially test the Big Sandy ore body, but we expect will ultimately test other lithium sources and become a center for innovation within the lithium industry.’

Now, despite the sharp corrections sustained by many ASX lithium stocks, the forces behind the lithium megatrend remain strong as the world continues its green push.

For instance, Anson Resources recently announced that lithium battery production is expected to multiply 10 times by 2025 and 17 times by 2030.

And you had the Biden Administration pledging US$20 billion in low-interest loans in support of the US transition to alternative energy and lithium supply chains.

And as Benchmark Minerals recently noted in its rebuttal of Goldman Sachs’ bearish stance on the lithium sector:

The lithium market will balance over the next few years, but it’s unlikely that an unprecedented ramp-up of marginal, unconventional feedstock will fill the deficit. It is also unlikely that demand will weaken significantly.

It will be a touch-and-go market balance; but there will not be the structural oversupply that Goldman Sachs is predicting.

As the market wrestles between long-term supply security to fuel the lithium ion economy, and increasingly market-led pricing mechanisms to incentivise supply growth, the era of lithium market volatility is likely just beginning.

Now, given that Benchmark expects lithium demand to remain strong for the foreseeable future, which stocks stand to benefit?

If you are interested in lithium stocks, you may want to read Money Morning’s latest research report, which identifies and profiles three overlooked ASX lithium stocks.

Access the report — freely available — here.

 

Regards,

Kiryll Prakapenka,

For Money Morning

 

About Kiryll Prakapenka

Kiryll Prakapenka is a research analyst focusing on investigating the biggest trends in investments. Kiryll brings sound analytical skills to his work, courtesy of his Philosophy degree from the University of Melbourne. A student of legendary investors and their strategies, Kiryll likes to synthesise macroeconomic narratives with a keen understanding…

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