Mine excursion
have focused on mining lithium from in situ ore, which would
increase high-grade concentrate production and include petalite
and tantalum concentrates. Phase 3 would have included lithium
carbonate production.
The Phase 1 flotation plant (under construction) will be capable
of processing 350 000–400 000 tonnes of feed per year to produce
approximately 70 000 tonnes per year of 4% Li2O. The intention is
to have production increase to more than 220 000 tonnes per year
of 4% Li2O by 2020.
Demand and supply
Coetzee enters one of many historical stopes left behind
by the old Anglo American mine in the 1930s.
Earlier miners left several old mining equipment behind,
which have now been unearthed at the site.
www.miningmirror.co.za
Whether this is achievable all depends on demand and supply, and
on the number of new lithium projects that come online in the next
year or so. At the moment, it does not really make sense to invest
capital in developing lithium mines, although many analysts feel
that the demand will continue to grow.
North-east of the Damara Belt, between Henties Bay on the
coast and inland towards the historic tin mining town of Uis, lies
another prolific pegmatite belt that is better known for its tin
deposits but that could also host significant deposits of lithium.
Tony Harwood, CEO of Montero Mining, has been looking to
get his Soris (close to the Brandberg) and Uis lithium projects off
the ground in this area, but the dip in lithium prices would have
halted his endeavours. The oversupply of lithium is bad news for
Desert Lion Energy, Montero Mining, and Namibia in general, as
the mineral could have resulted in a revival of the stagnating mining
industry in the country.
“Up to the beginning of 2018, lithium's price had roughly
doubled since the beginning of 2016,” says Nicolaas Steenkamp, an
independent geological and geotechnical consultant. “August 2018,
however, saw a global slump in lithium product prices,” he adds.
Many analysts believe that the dip in lithium prices is driven by
Australian lithium miners, listing new mines on the ASX, and as a
result supply is outpacing demand. This has led to a surge in short
selling on the ASX, fueling the fears of a global lithium oversupply.
Investment bank Morgan Stanley predicted in February that
global lithium prices would drop 45% by 2021 on the back of
increased production from Chile. This was backed up by a note
issued in August 2018 by Macquarie Research that there was a
looming lithium oversupply. These reports also had a negative
effect, with some companies losing a significant chunk of their
value. “The industry replied to these reports by stating that the
reports underestimated demand and that lithium chemicals end-use
product is in short supply, with little effect on the market,” says
Steenkamp.
The fact is, nobody really knows how to predict the volatilities of,
and demand for, a new mineral and product. Desert Lion Energy’s
project in Namibia is unique, and it is the first operating lithium
asset in Namibia and one of the first on the African continent. The
infrastructure in terms of road and rail is readily accessible and in a
superb condition, while the Port of Walvis Bay is only about 260km
away. Water and electricity supply would not be a concern.
“This is a significant deposit,” says Simon Kahovera,
exploration manager and chief geologist at Desert Lion
Energy. Kahovera is optimistic about the Karibib geology and
what might await brave exploration companies like Desert
Lion Energy when they venture into the thick layers of rock
underlaying the denuded earth towards the coast on the west
and the towering sand dunes of the Namib. Desert Lion
Energy’s project, even if mining has ceased, remains an exciting
new development in Namibia and is well worth a visit, even if
just for an outstanding geology lesson. b
NOVEMBER 2018 MINING MIRROR
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