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The battle for Bacanora

Bacanora Lithium (BCN) has 10 concessions that enable it to mine in an area of almost 100,000 hectares in Sonora, Mexico, about 100 miles from the US border, and it’s a rare thing on Aim: a pure-play lithium company. Another company Ganfeng Lithium (HK:1772), which owns 50 per cent of the Sonora Lithium Project, is working with Bacanora by developing a commercial process to extract lithium from the Mexican clays and production is due to start in 2023. The target is for 35,000 tonnes of high-quality battery-grade lithium products to be made every year.  

Lithium has many industrial uses, the main one being in electric vehicles (EVs) and plug-in hybrid vehicles and in future energy storage for wind and solar power. 3.2m EVs were sold worldwide last year and sales are forecast to quadruple when solid-state batteries make EVs cheaper than their internal combustion equivalents, probably by 2024. That’s just as well since new petrol and diesel cars won’t be sold in the UK after 2030. These batteries are made in gigafactories that cost between £2bn and £4bn and Britishvolt is building the UK’s first in Blyth in Northumberland, with a promised output sufficient to power 300,000 EVs a year. It’s due to open in 2023 and others are being talked about in Coventry and Sunderland.

According to Simon Moores of Benchmark Mineral Intelligence: “We are in the midst of a global battery arms race, [in] which the US is presently a bystander.” And in which, he might have added, Britain was late to arrive. Worldwide, 181 gigafactories are due to be open by 2030, of which 88 were already up and running in 2020, and 136 of these are in China, which has been opening them at the rate of almost one a week. Continental Europe can muster 16 and the US 10. The lithium-ion batteries they produce need nickel, copper, granite and manganese, as well as massive amounts of lithium and cobalt. Moores predicts that “those that control these supply chains will control the industrial power for the remainder of this technological cycle, which could last well into the 22nd century”.

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