Asked why he had not included the A$69 million (US$51 million) Lithium Australia among a list of comparable companies with lithium exposure in his comparative analysis, European Metals chief executive Keith Coughlan was blunt. 

It was not a mining company, he said. It did not have any resources.  He conceded in a manner barely concealing disbelief it may have a technology to sell.

The most avid ‘From the Capital’ readers may recall the March 13, 2015, column describing how Lithium Australia (or Cobre Montana as it was known then) intended to turn the lithium market on its head.

Then, Lithium Australia was touting a deal with European Metals to process some 134 million tonnes of ore containing 0.6% Li2O at the latter’s Cinovec property in the Czech Republic. 

 Uniquely, or so Lithium Australia claimed, its technology could create the largest commercial lithium deposit in the world. The company’s deal with European Metals would transform the global lithium market.

Lithium Australia had entered a technical alliance with an unlisted company called Strategic Metallurgy, we were told, to pioneer the commercial extraction of lithium from micas. It had acquired the rights to use the technology in Western Australia and a limited number of sites outside Australia, one of which was Cinovec.

In early February 2016, Lithium Australia was still touting the relationship with Strategic Metallurgy as the glue holding together a broadening array of partners with whom it was working to produce battery-grade lithium from hitherto unanticipated sources of metal.

"None of the parties appear to have missed a beat in a market with a strong wind at its back "

As the world was looking at the state of the lithium market more excitedly, the owners of the technology must have decided that their deal was not as generous as it could have been.

In late February, as if to protect itself from an impending break-up, Lithium Australia came up with a new hydrometallurgical process supposedly better, more generally applicable and more disruptive than anything Strategic Metallurgy could offer. Lithium Australia has likened it to the impact of flotation on mineral processing.

Symptomatic of a 1990s style technology market in which new ideas were more frequent than contracts or sales, Lithium Australia has offered no explanation as to why Strategic Metallurgy jumped or was dumped as its technology partner. Nor has it explained how a new process had materialised so quickly.  

We can assume the Australian Nuclear Science and Technology Organisation (ANSTO) has a role because Lithium Australia has disclosed a government grant under which it must partner with ANSTO to commercialise the technology. Presumably, this time, firm contracts are in place.

By late March, the deal between Lithium Australia and European Metals had also fallen apart.  European Metals claimed to have found a better technology partner in Europe despite the ruptured relationship with Lithium Australia promising to transform the global lithium market barely a few weeks earlier.  

To their credit, none of the parties appear to have missed a beat in a market with a strong wind at its back.

Well and truly on the lithium bandwagon, European Metals now headlines its Cinovec presentation as “a globally significant previously mined lithium deposit”. Though, it has not mined on the site itself, only 400,000 tonnes of ore came out in trials decades ago, and no lithium has ever been extracted from the communist era site.  

Meanwhile, Strategic Metallurgy has been acquired, as part of a corporate restructuring, by Platypus Minerals, which has deftly transformed itself into one of the latest of the industry’s proliferating lithium plays. 

That was mid-March. This month, European Metals announced it had gone back to its original but still unproven technology option, this time with Platypus Minerals.

Lithium Australia has also reported a processing deal with Pilbara Minerals, one of the top five performing investments in the Australian resources sector over the past year. Pilbara Minerals has been describing itself as having the “world’s leading lithium development project”.

My August 22, 2014, ‘From the Capital’ column outlined why Pilbara Minerals may have had one of the worst track records of any company in an industry with more than a few contenders for the title.  

At that time, after fleeting endeavours in Queensland, WA, Papua New Guinea, South America, Africa and Indonesia looking for gold, copper, iron ore and iron sands ended fruitlessly, the directors of Pilbara Minerals were extolling the virtues of a Pilbara tantalum project called Tabba Tabba.  

My judgement expressed in Mining Journal that “the feasibility study and existing funding arrangements actually imply a losing equity investment proposition” was little appreciated for the insight it offered into the future of the Tabba Tabba project.    

After being a few weeks away from production for the best part of two years, Tabba Tabba has been “indefinitely suspended”.  

Pilbara Minerals has sheeted home the blame for the failed development effort to Perth-based consulting firm Nagrom, used because it lacked the requisite operational experience itself. Mention of market conditions also playing a role in its demise are at odds with the earlier claims of Pilbara Minerals it had a fixed price contract for all it could produce.

When asked what they most value in a mining investment, fund managers invariably say “the track record of management”.  But that is easily shunted aside if, as in these instances, there is the whiff of lithium in the air.  

Over the past 12 months, the Lithium Australia share price has risen 540%. Pilbara Minerals is up an extraordinary 1,510%. European Metals has added 500%. Platypus Minerals has risen 440% since the beginning of 2016 alone. 

With returns like that, who cares if anybody can actually make something work?

*John Robertson is a director of EIM Capital Managers, an Australia-based funds-management group. He has worked as a policy economist, business strategist and investment-market professional for nearly 30 years, after starting his career as a federal treasury economist in Canberra, Australia