the Lake Resources NL‘s [ASX:LKE] the share price jumped 6% at the start of trading after he said he owned the ‘the cleanest lithium in the world‘in a presentation to investors.

LKE’s presentation referred to Lake’s 99.97% high purity lithium carbonate product, which has’Much lower‘impurities than 99.5% battery grade lithium carbonate of some rivals.

LKE shares were trading at 39 cents at the time of writing, up 870% in the past 12 months.


High purity = higher battery performance

One of the main points of Lake’s presentation was his argument that the higher the purity of lithium, the better the battery performance.

Better performing batteries will play a major role in electric vehicles seeking to overthrow the current dominance of internal combustion engine (ICE) cars.

By supplying high purity lithium, LKE hopes to attract manufacturers looking for quality inputs.

The company also said that only 50 to 60 percent of lithium production is battery grade.

So a business with more efficient lithium production is also a business with lower costs. This can improve margins or facilitate price competition.

Cleaner technology, reduced environmental impact

In its presentation, Lake Resources also highlighted the “Significant ESG benefits‘of its direct lithium mining process, supported by Breakthrough Energy Fund, an organization led by Bill Gates.

Lake highlighted the lower environmental impacts of its Kachi project in Argentina, calling the project “cleanest lithium in the world.

Kachi project in ArgentinaSource: Company presentation

How does this ESG trend relate to lithium mining?

As we have seen this year, investor demand for environmental, social and governance projects is outbreak.

While lithium is a vital material for a sustainable future, extract lithium is often not environmentally friendly.

BloombergNEF believes, for example, that “each tonne of lithium extracted from brine requires 70,000 liters of fresh water. To make matters worse, much of lithium mining occurs in areas already under water stress.. ‘

As recently as last week, German automaker giants Daimler AG and Volkswagen AG launched a study into the environmental impact of lithium mining in Chile, the second largest supplier of white metal.

But LKE is not alone in emphasizing its ESG credentials.

Renascor Resources Ltd. [ASX:RNU] – providing essential raw materials for lithium-ion batteries – was at the start of the year looking for green financing options for its battery anode project.

And one of ASX’s biggest lithium stocks – Vulcan Energy Resources Ltd [ASX:VUL] – is building what he calls the world’s first lithium plant with a zero carbon footprint in his lithium brine geothermal project in Germany.

LKE Perspectives ASX share price

One question investors may ask themselves is: Is the difference between 99.97% and 99.5% battery grade lithium carbonate commercially significant?

Can Lake quantify the business benefits for manufacturers by acquiring its 99.97% purity lithium over the 99.5% purity lithium from its competitors?

Although Lake’s presentation does not include data to answer these questions, LKE said its “premium battery quality product… reinforces Lake’s quality advantages and facilitates sampling discussions.

Additionally, although the business benefits for battery manufacturers of using Lake’s premium lithium have not been developed, a consequence of Lake’s high purity product is its premium price.

LKE’s submission included estimates suggesting that Lake can bring in US $ 13,000-16,000 / tonne for its high-grade LCE at direct mining costs of US $ 4,100 / tonne.

Lake Resource classified this as equivalent to a ‘very high margin‘which compares favorably to companies using brine evaporation or hard rock mining.

The estimated price of its premium lithium carbonate was also higher than the estimated prices charged for lithium carbonate extracted from evaporation from brine or hard rock.

LKE ended the presentation by saying that its prospects have ‘significant advantageCiting the price targets of analysts at Roth Capital, Lodge and Orior Capital in the range of 79 cents to $ 1.89 per share.

Lake Resource’s presentation comes amid a recent wave of interest in lithium stocks.

Governments envision a greener future while businesses consider cost-effective ways to accelerate that future.

Lithium is at the heart of it all, as the white metal is a key part of the global electric vehicle supply chain.

Therefore, if you want more information on a sector in full revival, I recommend that you read our free lithium 2021 report.


Lachlann Tierney,

For Silver morning

PS: In this new report, Money Morning’s Ryan Dinse reveals why he’s convinced lithium will rebound in 2021. Get the FREE report