Nordic Mining has acquired a 68 percent stake in Finnish mining company Keliber Oy, for4 million (U.S. $6.18 million) in cash and shares. Claiming to be Europes first lithium producer, Keliber plans to open a lithium plant in 2010.
The transaction, expected to close this month, gives Nordic a strong foothold in Finland, where Keliber has mining concessions for lithium minerals in Kaustinen and plans to establish a 40-45 million (U.S. $61.81-69.54 million) plant for the production of derivative lithium carbonate, used in the production of lubricants, pharmaceuticals and various alloys.
The realization of the lithium project will give opportunities of strategic and industrial importance for Nordic Mining, said company CEO Ivar Fossum. Headquartered in Oslo, Norway, Nordic focuses on the exploration and production of industrial metals and minerals such as tungsten, molybdenum, gold, thorium, nickel, palladium and platinum.
Nordic will finance Kelibers lithium production plant, which is located in Finlands Osterbotten region. Keliber has been carrying out project development on the lithium plant for several years, and is now entering into civil work and construction contracts.
The timing of a new production plant in Finland is good, said Olle Siren, Kelibers general manager. We appreciate Nordic Minings long term perspective in industrially sound projects. Mining activity and the establishment of lithium production will be of significant importance for this region.
Lithium is a silver-white, soft alkali metal that, under normal conditions, is the lightest metal and least dense solid element. It is highly reactive; in moist air rapid corrosion takes place to form a black tarnish. For that reason, lithium metal is typically stored under the cover of oil.
According to ICIS, lithium hydroxide, a lithium derivative, is mainly used in the grease industry, with demand growing at a steady 2 percent per year over the last 20 years.Lithium-based greases are popular in automotive, industrial, military, aircraft and marine applications.
Lithium is also used in glass and cement applications, and has ability to store electrical energy. Lithium carbonate is an important component in batteries for mobile phones, notebook computers, camcorders, cameras, and electric and hybrid cars.
The focus on environmental issues and carbon dioxide emission has significantly affected the demand for electric and hybrid cars based on lithium ion batteries. Toyota, for example, has plans to go 100 percent hybrid by 2020.
[Our lithium projects] represent new activity and possible further development, Keliber’s Siren said. We believe in increased demand and expanded application for lithium.