Canada's MGX Minerals hunts battery lithium in oilfields

MGX Minerals

30/01/2017 10:50

* Share price up more 250 percent this year 
    * MGX says technology a major breakthrough, analysts 
sceptical 
 
    By Barbara Lewis 
    LONDON, Jan 30 (Reuters) - Canada's MGX Minerals  XMG.CD  is 
close to completing testing of technology that uses brine from 
oilfields aiming to shorten the production of lithium to just 
one day, CEO Jared Lazerson told Reuters. 
    Hopes for the trial and plans to expand have helped boost 
MGX's share price by more than 250 percent this month, with its 
market capitalisation topping C$100 million ($76 million), 
Reuters data shows. 
    Lithium, known as white petroleum, is used in rechargeable 
batteries needed for mobile phones and electric cars. 
    More than half of the Earth's identified sources of it are 
in the "lithium triangle" of high-altitude lakes and salt flats 
that straddles Chile, Argentina and Bolivia. 
    Production there is cheap as the sun evaporates salt pools, 
but the process can take 18 months. 
    MGX Minerals is instead focused on oilfields, which Lazerson 
said also offer rich terrain. 
    The process it is testing uses oilfield wastewater 
containing lithium in what Lazerson said is "an amazing twist of 
fate" as it links the traditional fossil fuel sector with 
renewable energy. 
    Lazerson said MGX's pilot project would be complete within 
60 days and installed at one of the company's project sites with 
a major oil company operator.  
    He would not name the oil company, but said MGX had 
agreements with "almost all major and some mid-tier oil 
companies".     
    The pilot will handle around 300 barrels per day (bpd) of 
brine and the initial commercial target is to process 60,000 
bpd. 
    Those likely to be interested in MGX's progress include 
Britain's Cornish Lithium, which announced a mineral rights 
agreement this month with another Canadian miner, Strongbow 
Exploration.  SBW.V   urn:newsml:reuters.com:*:nL5N1F91ES 
    Lazerson said he could not comment on whether his technology 
would work on Cornwall's brine springs, but said working in 
oilfields had advantages of scale and infrastructure. 
    Many analysts are sceptical as the prospect of a surge in 
demand from electric vehicles is driving a wealth of lithium 
projects, not all of which are expected to succeed. 
    "My belief is that if you want to stay in the lithium game, 
you need to be a low-cost producer," said Jon Hykawy, president 
at research company Stormcrow Capital.  
    Cost is more important than speed, he said, in that once a 
pipeline has been established, lithium is consistently produced. 
    He and other analysts say the economics in Chile, where 
lithium concentrations are high and evaporation conditions are 
optimal, are hard to beat.  
 
 (Additional reporting by Susan Taylor in Toronto; editing by 
Jason Neely) 
 ((Barbara.hm.Lewis@thomsonreuters.com; +44 297 542 2932; 
Reuters Messaging: 
barbara.hm.lewis.thomsonreuters.com@reuters.net)) 
 
Keywords: MGX MINERALS LITHIUM/