(Reuters) – Short vendor J Capital Research on Monday alleged that Lake Resources NL’s plan to supply lithium in Argentina relies on a course of from Lilac Solutions Inc that possible doesn’t work, the most recent assault towards a wave of latest applied sciences aiming to supply the electrical car battery steel.
J Capital Research’s report outlines a number of alleged missteps by Lake’s administration and claims know-how developed by Lilac is just too pricey to run and makes use of an excessive amount of freshwater.
Privately-held Lilac is among the many most-prominent builders of so-called direct lithium extraction (DLE) applied sciences aiming to extract the battery steel from brine utilizing a variety of apparatus, although none have labored at industrial scale.
“Lake has hitched its cart to Lilac’s yet-to-be-proven know-how,” J Capital Research stated within the 17-page report. “Investors nonetheless haven’t any proof that the Lilac DLE know-how works at scale, and in that case, at what value.”
Shares of Lake, that are traded in Australia, fell 6.3% on Monday. Representatives for Lake and Lilac couldn’t instantly be reached for remark. J Capital declined to reveal the dimensions of its short place.
Lilac signed a cope with Lake final September to develop an Argentina lithium mission, a part of a plan to evolve from a know-how firm to a lithium producer.
In April, Ford Motor Co signed a preliminary lithium provide cope with Lake.
Lilac’s know-how makes use of ceramic beads to draw lithium in batch cycles, akin to a laundry machine, after which a water-and-acid combination is used to scrub off the steel.
J Capital alleges within the report that the excessive value of the beads would make Lake’s mission uneconomical and that the method would go away behind “poisonous waste.”
The report additionally alleges that Lake has issued inventory choices to analysts who revealed favorable studies.
(Reporting by Ernest Scheyder; Editing by Marguerita Choy)