Mining Mirror November 2018 | Page 19

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 [17]