Lithium

As the only U.S. lithium producer, Rockwood Holdings operates a continental brine production facility in the Silver Peak, Nevada area; with American Lithium Minerals and Rodinia Minerals currently active among other mining companies in brine exploration in this region of southwestern Nevada.

US Land and Minerals

The largest deposit of lithium in the world is the Salar de Uyuni in Bolivia, which contains up to 50 to 70 percent of known world reserves; however, the current socialist Bolivian administration has remained unfavorable to foreign mining investment and has stated the intention to maintain the mining rights for the lithium. The Bolivian salar is also less interesting from an investment perspective because of the higher magnesium to lithium ratios, which are three times as high as those at Atacama, making it more difficult to refine the salt into lithium carbonate. Finally, the evaporation rate at Uyuni is only 40 percent of that of the Atacama rates, which would make refining more time consuming.

PEGMATITES - are coarse grained igneous rocks formed by the crystallization of post magmatic fluids. Lithium containing pegmatites are relatively rare and are most frequently associated with tin and tantalum, with some lithium ?discoveries' actually resulting from the exploration for the associated minerals. Alaska, Northern Ontario, Quebec, Ireland and Finland are among many other global locations of pegmatite deposits.

The principal lithium pegmatite minerals are spodumene, petalite and lepidolite. All have been used directly in the glass and ceramic industries provided the iron content is low and all have been used as the feedstock for the production of lithium chemicals. Spodumene, as a concentrate, is still used in China for lithium chemical production and advanced mining development in South Western Australia for Galaxy Resources in a joint lithium and tantalum project.

HECTORITE CLAYS - hectorite is a magnesium lithium smectite and the clay is most notably found in a number of areas in the western United States. The largest known deposit is associated with the volcanic rocks of the McDermitt caldera that straddles the Nevada/Oregon border where it occurs in a series of elongated lenses. Western Lithium USA Corporation is the holder of the clay resource and has completed multiple phases of drilling in northwestern Nevada to confirm earlier work and is moving forward to potentially demonstrate a scalable source of lithium carbonate.

GEOTHERMAL BRINES - Small quantities of lithium are contained in brines at Wairakei, New Zealand (13ppm) at the Reykanes Field (8ppm) and other areas in Iceland and at El Tatio in Chile (47ppm). The most attractive known occurrences are in the Brawley area south of the Salton Sea in Southern California. In addition to the lithium deposits the Salton Sea Known Geothermal Resource Area (KGRA) in southern California contains some concentrations of potash, lead, boron and zinc and currently sustains 10 electricity generation projects, delivering approximately 326 MW of power. A proposed project would bring the total to 511 MW of a 680 MW proven reserve.

OILFIELD BRINES - Deposits of lithium are contained in oil field brines in Alberta, North Dakota, Wyoming, Oklahoma, east Texas and Arkansas where brines grading up to 700 ppm are known to exist. Other oilfield brine lithium deposits exist, most notably in the Paradox Basin, Utah; however, global reviews for deposit size, potential yield and production cost estimates are not available.

Extraction Costs - In the case of continental brines costs can vary, but are considerably lower than extraction costs for other deposit types. The cost of soda ash to convert lithium chloride to lithium carbonate represents a significant percentage of the total costs. The most deleterious element in the brine is magnesium and the magnesium/lithium ratio is lowest at the Salar de Atacama, low at the Salar de Hombre Muerto and slightly higher at the Salar de Rincon. The largest of the Chinese brine deposits also demonstrate higher ratio and these brines need more complex processing.

In the case of production from pegmatites, costs will comprise of mining, beneficiation to a moderate or high grade of concentrate, calcination to produce acid-leachable beta spodumene, reaction with sulphuric acid and the conversion of the lithium sulphate solution with sodium carbonate. The costs of acid, soda ash and energy are a significant percentage of total costs but they can be partly offset if a market exists for the sodium sulfate by-product.

Geothermal brines may be rich in zinc as a co-product, in addition to being a major producer of electric power but, as is with the case of oil field brines lithium recovery costs have not been determined.

Production Expense Counterbalance

An important factor in brine chemistry is the presence or lack of other recoverable byproducts, which can impact the economic viability of a project. Rockwood Holdings recovers moderate quantities of potassium chloride as a co-product at their operation and SQM recover much larger volumes together with potassium sulphate and boric acid. Most of SQM's potassium chloride is converted to much higher value potassium nitrate using nitrates from company owned deposits located between the salars and the Pacific coast. Most of the Chinese salars contain economic concentrations of potassium and boron.