YOKOHAMA (Kyodo) -- Japanese Prime Minister Naoto Kan and Canadian Prime Minister Stephen Harper agreed Sunday to work more closely on energy issues such as the development of rare earths, while signing an accord to create subcabinet-level talks to boost their security cooperation, Japanese officials said.

During their talks on the sidelines of a weekend Asia-Pacific Economic Cooperation summit in Yokoyama, Kan told Harper of his wish to cooperate closely with Canada in the development of natural resources and Harper agreed, a senior Japanese official said.

Canada has abundant natural resources including rare earths, while Japan has recently been struggling with export curbs by China, the world's major supplier of the minerals vital for high-tech products, amid renewed bilateral tensions.

The two leaders also showed optimism about having a stronger economic partnership, with Kan citing his government's latest free trade policy and Harper expressing his eagerness to strengthen economic ties between Japan and Canada, Deputy Chief Cabinet Secretary Tetsuro Fukuyama told reporters.

On other issues, Harper urged Kan to ease the restrictions on beef imports that Japan imposed due to fears about mad cow disease, and Kan said Japan would base its actions on scientific data to ensure that such imports are safe, Fukuyama said.

In the joint declaration on political, peace and security cooperation, the Japanese and Canadian premiers said they wanted to "create a flexible and practical framework for the enhancement of peace and security cooperation."

The cooperation will include such issues as disarmament and nonproliferation, peacekeeping and post-conflict reconstruction, antiterrorism, and maritime security, according to the statement.

The two nations will hold regular consultations at the vice ministerial level under the "two-plus-two" framework, with Canada being represented by its deputy ministers of foreign affairs and national defense, while Japan's vice foreign and defense ministers will take part.

Japan currently has minister-level two-plus-two meetings with the United States and Australia, and vice minister-level talks with India and Vietnam.

Kan voiced hope during his talks with Harper that with the signing of the statement their nations will boost cooperation on a wide range of issues, Fukuyama said.

(Mainichi Japan) November 14, 2010

Canada Lithium Sets Sight On Lithium Production By 2012

Canada Lithium (TSX:CLQ, OTCQX:CLQMF) has issued 174 million shares and options for a fully diluted market capitalization of $142 million and holds cash of $10 million.

The company is fast tracking the completion of feasibility studies and permitting at its Quebec Lithium Project located near Val d’Or in Quebec, and expects to commence production in the second half of 2012 to sell into a fast growing market for battery-grade lithium, known as lithium carbonate / Li203.

Lithium carbonate consumption for cell phones and batteries runs 5 to 10 grams per appliance, hybrid cars consume 6 kilograms, plug in electric vehicles use 12 kilograms and bulk storage batteries can utilize up to 800 kilograms for a 1 megawatt capacity.

Current consumption has been concentrated in cell phones, computers, cameras, Ipods and power tools but has been moving into heavier tools such as lawn mowers, chainsaws, wheelchairs, scooters and motor boats and the latest generation of 2012 cars boasts 25 models with lithium-powered batteries. Extra demand will also come from warehouse sized batteries for grid stabilization and back up batteries for home and business.

The big jump in lithium consumption will be driven by the Asian electric car market, where most of the world’s lithium batteries are manufactured. China is currently 2 to 3 years ahead of America and Europe, has 120 million electric scooters on its roads and is now the world’s largest car market.

Chinese car manufacturer BYD (HKG:1211) has started field testing its E6 hybrid car which claims 330 kilometers on one charge. China currently has 47 cars per 1,000 population, and is aiming to reach the same penetration as Brazil with 140 cars per 1,000 population by 2020. This will require 250 million new cars, or 25 million cars per year, with a significant quantity of them being electric vehicles.

Another very significant market will be India with 38 cars per 1,000 population. Roskill projects demand for lithium batteries to grow from 24% to 40% of total market demand for lithium by 2015, and estimates that that production of 6 million electric vehicles per year will consume an additional 160,000 tonnes of lithium carbonate.

According to Ernst & Young, the Chinese are six times more likely to purchase an electric vehicle than an American or Japanese. Nissan says that 10 million electric cars per year will be sold by 2016, and most car manufacturers are scrambling to find guaranteed sources of lithium carbonate supply.

Many developers of lithium resources have established strategic relationships with car companies or battery manufacturers. Canada Lithium has an agreement with Mitsui (NASDAQ: MITSY, TSE: 8031), a major worldwide corporate conglomerate, to market some of Canada Lithium’s product in China, Japan and Korea.

Canada Lithium’s Lithium Project is located close to Val d’Or, Quebec, which has a population of 31,000 and is near to paved roads, rail, cheap electric power, skilled labor and infrastructure needs. Quebec also has a number of technology companies involved in the development of lithium battery technology including Phostech Lithium, Bathium/Ballore developer of lithium metal polymer battery, and Hydro Quebec, which is an electric utility that is involved with new technologies that use electricity.

The Quebec Lithium Project was a former producer of lithium carbonate, lithium hydroxide and spodumene from 1955 to 1965. The company recently completed a NI 43-101 compliant study for a Measured and Indicated Mineral Resource of 46.7 million tonnes of Li2O at a grade of 1.19% and an Inferred Resource of 57.6 million tonnes at a grade of 1.18%.

A prefeasibility study indicated that pegmatite dyke extensions can be economically extracted by bulk mining from an open pit with a mine life of 30 years, and with pegmatite extensions open and plunging at depth below the final pit floor.

The process rate was calculated at 3,000 tonnes per day for an annualized 1 million tonnes of ore at a grade of 1.12% of Li2O. All of the ore will be crushed, ground and run through a floatation circuit to produce 185,000 tonnes per year of spodumene at grade of 6.5% Li2O, with 20,000 tonnes sold into the ceramics and glass market. The balance of the ore will be run through a two phase kiln, leached and then run through a lithium carbonate precipitation circuit, to produce 19,300 tonnes of battery grade Li2O3 at a grade of 99.5%.

The capital costs to construct a mine, process plant, infrastructure and contingency costs are estimated at more than US$150 million. Operating costs to produce lithium carbonate are estimated at US$1.27 per pound / US$2,800 per tonne, to produce revenue of $2.70 per pound / $5,850 per tonne.

Pre-tax Net Present Value is calculated at a very positive US$325 million, with an Internal Rate of Return of 33% and payback of 3.1 years. Prefeasibility studies indicate a total EBITDA of US$872 million at US$2.70 per pound.

Additional potential revenues may come from production of lithium hydroxide, sodium sulfate, silica quartz and K and Na feldspars. Canada Lithium expects to complete feasibility studies, mine planning, permitting and construction by the second half of 2012.

Current worldwide production of lithium is 90,000 tonnes per year and is expected to rise to 191,000 tonnes per year in 2015. The bulk of current production comes from brines located in Chile and Argentina.

Canada Lithium will produce at a rate of 19,000 tonnes per year from “hard rock” pegmatite and estimates that it will become the world’s fourth largest producer of lithium.