Canada's MGX Minerals sets out to lead way from oil to petrolithium

MGX Minerals

11/08/2017 18:29

* Utah acreage neighbours Nevada where Tesla plans battery 
factory 
    * Canada's biggest holder of lithium brine acreage 
    * Share price more than doubled this year 
 
    By Barbara Lewis 
    LONDON, Aug 11 (Reuters) - A small Canadian miner has set 
out to lead the way into petrolithium production, combining oil 
for conventional vehicles with lithium for electric vehicles 
produced from oilfield waste water. 
    Shares in MGX Minerals  XMG.CD  have doubled this year as 
investors seek exposure to the predicted electric vehicle 
revolution that many of the conventional resource firms do not 
provide. 
    It has acquired acreage that establishes it as Canada's 
biggest holder of lithium brine assets with around 2 million 
acres' worth in North America. 
    Much of it is in the Paradox Basin in Utah, which could 
position MGX to provide lithium to Tesla's  TSLA.O  battery 
factory in neighbouring Nevada. MGX CEO Jared Lazerson said 
commercial confidentiality rules meant he could not comment on 
whether any agreements had been signed. 
    "I would love MGX to be the company that brought the oil and 
gas industry into the lithium space and the EV space, to allow 
the oil and gas industry to support EV and not be so worried or 
concerned," Lazerson told Reuters in a telephone interview. 
    Lithium is not rare and some analysts say high prices will 
prove a bubble as more production comes online. Processing 
capacity, however, can be an issue and auto makers are locking 
in contracts with suppliers.  urn:newsml:reuters.com:*:nL5N1KM2WL 
    Lazerson says MGX's advantage as the car industry wakes up 
to its need for lithium for battery-powered electric vehicles is 
that it can bring on production quickly and at a relatively low 
capital cost using brine wastewater in oilfields. Economics are 
favourable as lithium production effectively boosts the oil 
price. 
    More than half of the Earth's identified sources of lithium 
are in the "lithium triangle" of high-altitude lakes and salt 
flats that straddles Chile, Argentina and Bolivia. 
    The lithium from there is low cost because it relies on a 
roughly 18-month process of evaporation using the sun for 
energy, but bringing on new volumes requires advance planning. 
    Alternatively, lithium comes from hard rock, for instance in 
Australia, but that can involve large amounts of waste rock and 
be energy-intensive. 
    Lazerson says pilot projects using oilfield brine have been 
successful and the aim is to ramp up to processing 1,200 cubic 
metres of brine per day around the end of the year. So far it 
has processed up to 20 cubic metres per day. 
    MGX seeks to keep capital expenditure low and to maximise 
what Lazerson says is first-mover advantage by using small 
nanofiltration units that can be moved to wherever the brine is. 
    "I'm sure others will come along. We're trying to be the 
first out of the gate," he said.  
 
 (Additional reporting by Nicole Mordant in Vancouver; editing 
by Susan Thomas) 
 ((Barbara.hm.Lewis@thomsonreuters.com; +44 207 542 2932; 
Reuters Messaging: 
barbara.hm.lewis.thomsonreuters.com@reuters.net)) 
 
Keywords: MGXMINERALS MINING/