Lake Resources to support global 'green' push with sustainable lithium strategy as Europe unveils clean energy investments

Lake Resources NL (ASX:LKE) (CMKTS:LLKKF) will support the global push for cleaner energy using its leading sustainable and scalable direct lithium extraction process as more countries, including those in Europe, unveil 'cleaner and greener' strategies incorporating electric vehicles. In addition to massive incentives being offered to the EV industry, EV battery gigafactories are being rolled out across Europe, China and other countries despite the impact of COVID-19, hiking the demand for battery-grade lithium. Lake Resources is set to benefit with its Kachi Lithium Brine Project in Argentina for which a recent PFS, along with recently published research, demonstrates the disruptive, cost-competitive, sustainable and scalable nature of the Lilac direct lithium extraction process.  This process has the ability to produce a premium, battery-grade product sought by battery and cathode manufacturers globally. "Compelling opportunity" Lake managing director Steve Promnitz said: “Europe is pushing ahead with EVs and is now challenging China and North America for industry leadership. “For Argentina, part of the ‘Lithium Triangle’ which is home to the world’s lowest-cost lithium output, the opportunity is compelling given its established production base. "Lake looks forward to participating in this international growth, supporting the world’s push for a cleaner energy future based on our use of a leading sustainable and scalable direct extraction process.” Europe’s EV investments The European Commission has unveiled a €750 billion (A$1.22 trillion) economic recovery plan, with planned investments in technologies key for the clean energy transition, which includes renewable and energy storage technologies and batteries. The Next Generation EU plan, which was approved on July 21, also calls for 1 million charging points for EVs in the European Union. According to the EC, Europe has seen rapid growth in planned lithium-ion battery production capacity, with its global share set to reach 14.7% by 2024, overtaking the US and Asia (excluding China). European Union (EU) internal market commissioner Thierry Breton noted the EU faced major challenges to secure supplies of critical raw materials including lithium and cobalt. “To meet climate goals, industries will need 60 times more lithium by 2050. Europe is 100% reliant on imports of lithium, which is used in battery production, with 78% of supplies coming from Chile alone,” he said, according to The Financial Times. Other plans announced by European countries included: ➢   France injected €8 billion in its automotive industry, with focus on the production and sales of EV; ➢   Germany said all petrol stations have to provide EV charging facilities, as part of a €130 billion recovery plan that covers spending on battery cell production and EV incentives; ➢   Italy proposed increasing EV subsidies to €10,000 per vehicle; ➢   The Netherlands drew up new EV incentives running through 2025, both for new and used vehicles; and ➢   The UK has flagged plans to give drivers up to £6,000 ($A10,800) to swap diesel and petrol cars for EVs. The consultancy Roskill expects manufacturing capacity to reach some 2 million plug-in vehicles by 2021 and almost 3 million by 2022. Battery gigafactories Analysts Benchmark Mineral Intelligence (BMI) estimate that 142 EV battery gigafactories are in the pipeline over the next decade - more than double the 67 currently in operation. China is leading the charge, building the equivalent of one gigafactory a week, with the US and Europe also joining the production surge, resulting in the lithium-ion battery market quadrupling in size since 2015, driven by growth in EVs.   BMI expects the industry will need 2 million tonnes of lithium carbonate equivalent (LCE) by 2028, a significant rise from the around 300,000 tonnes produced in 2019.   Despite demand forecasts continuing to rise, shelved lithium expansion plans due to COVID-19 have spurred predictions of a lithium supply shortfall by 2023.   Both BMI and Roskill have predicted a structural deficit emerging by the middle of this decade, given the difficulty in ramping up production quickly.    Roskill sees lithium-ion battery demand to rise more than 10-fold by 2029, reaching in excess of 1,800 GWh capacity with more than 145 gigafactories globally.   BMI noted that the supply chain challenge for the EV industry, with projected production hikes by automakers, required "significant investment" in high-purity lithium. Lake Resources’ Promnitz said: “Low-impurity, battery-grade product is in demand from battery and cathode makers globally. "With demand forecasts for battery-grade lithium continuing to increase and supply-constrained, companies such as Lake which can provide the right product at the right time will enjoy sustained demand.”