The ongoing prospect of strong commodity income is being met with major investment in Australia’s resource sector. Counted among those resource investments is the exploration for Lithium to feed the growing demand of China’s emerging market. As such, the geographical location of AmeriLithium’s Western Australia Lithium plays is ideal for filling the role of Lithium exporter to China’s market.
China clearly leads the emergence of the Asian markets, managing an 8.7% rise in gross domestic product (GDP) in 2009, with 10.7% growth in Q4 of that year. As China’s market continues to grow, so will its demand for Lithium to power its ever-expanding consumer electronics industry that manufactures such products as cameras, laptops, games consoles and mobile phones, of which roughly 600 million were produced by China in 2009. Adding to the demand for Lithium are the stimulus measures of China’s government, which helped retail sales of consumer goods grow by 16% and auto sales jump by 46.2% in 2009.
Having taken over the US in 2009 as the world’s largest auto maker with sales of 13.6 million vehicles, China has now announced plans to begin selling an electric car in the US by the end of 2010. The electric car in question would be built by BYD Co., one of China’s fastest-growing independent auto makers. BYD is also the world’s second-largest producer of Lithium-ion batteries, with over a decade of battery-making experience. The company’s founder and chairman says BYD’s Lithium-ion batteries use an iron-phosphate technology that is chemically stable and thus "inherently safe." BYD already sells a plug-in electric vehicles in China.
"The Lithium Chase," a March 9, 2010 New York Times article, pointed out that, while about 25% of all Lithium produced is currently used for energy storage in smaller electronic goods, that proportion stands to sharply increase depending on the success of electric vehicles (EVs). EVs favor Lithium-ion batteries for their capacity to hold their charge longer while carrying more energy with less weight than batteries using other materials. The New York Times article also cited a report by investment adviser Byron Capital Markets that predicted a 40% increase in demand for Lithium from 2009 to 2014. In turn, the world’s four largest Lithium producers – operating in Chile, Argentina and/or Australia – have indicated they are planning the expansion of long-running projects as warranted by future Lithium demand.
Matthew Worrall, AmeriLithium’s CEO, commented on the advantages that the Company’s Western Australia project represents saying, "We’re excited to suddenly find ourselves neighbors with a country that not only already relies on Australian commodity exports, but one whose manufacturing economy accounted for about a third of global Lithium demand in 2008. China’s multi-billion dollar market represents an unparalleled opportunity for Lithium export, and as demand for Lithium from Asian markets increases, Australia – and AmeriLithium – finds itself in an ideal geographical location to benefit from meeting that demand through Lithium exports."
AmeriLithium’s three Australian plays cover 43,000+ acres around and abutting Lake Dumbleyung, where a 2007-2008 survey for Reward Minerals Ltd reported the presence of salt lake brine with a Lithium concentration of 530 mg/liter(7) (by way of comparison, the only US-based Lithium producing plant – operated by Chemetall Foote Corporation in Nevada – originally began operation at 400 mg/liter). Lying within Western Australia’s South West Mineral Field, the AmeriLithium plays represent an area identified as benefitting from a pro-mining Australian government stance and legislation while being rich in brine deposits and having established infrastructure to support the transport of extracted Lithium.
Lithium is a lightweight metal used in a wide range of consumer products the world over: the medical industry uses Lithium as an anti-depressant; industrial uses include glass, ceramic and porcelain enamel manufacture; the aviation industry uses Lithium in alloys. Of particular interest is the use of Lithium for battery production, which has expanded significantly in recent years due to rechargeable Lithium batteries being used increasingly in electrical tools and in the rapidly expanding portable electronics market. Furthermore, the next generation of hybrid and electric vehicles are being designed to use high-capacity Lithium-ion batteries as environmentally-friendly fuel alternatives while the Obama administration has introduced $5 billion in funding and incentives for the development of a secure, domestic battery industry with special focus on Lithium-ion batteries.
AmeriLithium is a publicly traded (NASD OTC BB: AMEL), mining company committed to progressively developing into one of the leading American players in the global Lithium industry. The Company is headquartered in Lake Tahoe, NV. AmeriLithium has amassed a Lithium portfolio consisting of ~710,000 acres, including a Nevada-based project adjacent to the only Lithium producing plant in the US, a large project in Alberta, Canada, and a project in Western Australia.
