Western Lithium looking for strategic partners for Nevada mine

The group hopes to bring the mine on line by early 2014 at a cost of about $114m

NEW YORK (Reuters)  - 

Lithium miner Western Lithium (WLC.V) is seeking strategic partners to help develop a planned mine in Nevada that it hopes to bring on line by early 2014, President Jay Chmelauskas said on Wednesday.

The company, which has a market capitalization of about $114 million, expects development of its Nevada mine to cost about $400 million, Chmelauskas said at the Reuters Global Mining and Steel Summit in New York.

The company is currently working on environmental impact filings for the Kings Valley Lithium Project, and hopes to win those approvals within the next two years. Last month, the company said its plan of operation had been approved by federal and state regulators.

"We're in discussions all the time. At the appropriate time, we'll bring in a partner," he said.

Western Lithium is betting that car makers' plans to devlop electric vehicles will prove a boon to the lithium ion battery industry, lifting demand for lithium metal by two- or three-fold in the coming years.

"Our potential partners are strategics that would be able to give us better bank financing," Chmelauskas said.

The company currently has no production of lithium metal, but expects to reach an output of 27,000 tons per year in its planned mine's first stage.

The company expects to find a partner among the companies that currently supply the auto industry as it nears the start date for the mine, he said.

"As we de-risk our project, as we get perceived as an economic threat to existing producers, you get more value," Chmelaukas said.

Worldwide demand is about 100,000 tons per year, up from 70,000 tons about five years ago, but is currently oversupplied, he said.

SQM SQMa.SN, the largest supplier of lithium metal, announced a price cut of 20 percent in September.

"At some stage, we think the market is going to look better than it looks today. Right now the market is very speculative. If we can show we're competitive with existing producers, we're going to be in a very compelling position," he said.

(Reporting by Matt Daily; editing by Jim Marshall)

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