TORONTO (miningweekly.com) – The TSX this week welcomed its 23rd lithium listing with the initial public offering of Lithium Americas Corp (LAC).

The Argentina-focused company has Japan’s Mitsubishi and Canadian automotive component-maker Magna International as shareholders, both of which have already reached offtake accords for future output.

Mitsubishi’s automotive-related unit senior VP Hiroshi Imagawa went so far as to say LAC’s project was of “great interest” to the Japanese conglomerate. “It is vital that this project succeed in order that Mitsubishi secure a low-cost supply of lithium in the near future.”

LAC raised C$45-million from selling shares this week, the bulk of the proceeds of which will go towards advancing exploration at its Cauchari-Olaroz lithium and potassium project in the Puna plateau.

This area, which extends across Argentina, Chile and Bolivia, hosts an estimated 84% of the global lithium brine reserves, and accounts for over 50% of global production. Lithium is mainly used in glass and ceramics, with batteries providing the second-biggest source of demand.

The company plans to complete a prefeasibility study at Cauchari-Olaroz in 2011, after which it would embark on a full feasibility study.

Lithium caught the imagination of investors and mining hopefuls over the past couple of years as electric cars emerged as a greener form of transport. The rapid rise of consumer electronics such as laptops and cellular phones also helped spur demand.

The recession of 2009 cooled demand significantly, however, and with it the share prices of the various juniors that plan to produce what is the world’s lightest metal.

What is interesting to note about LAC is that both of its strategic partners, Magna and Mitsubishi approached the Toronto-based company to propose cooperation.

Magna now owns 13,3% of LAC, and Mitsubishi owns 4,1%. Both companies have inked offtake agreements with the newly listed junior.

Magna, headquartered in Aurora, Ontario, is North Americas largest automotive supplier. It has a unit focused on hybrid and electric vehicles, which would use lithium-ion batteries.

Mitsubishi Motors is a shareholder in Lithium Energy Japan, which makes lithium-ion batteries for the Mitsubishi iMiEV electric car.

According to Magna subsidiary Symatic’s offtake agreement with LAC, it can buy up to 25% of the company’s lithium production at a 5% discount to the market price.

Mitsubishi has the right to acquire up to 12,5% of LAC’s production, also at a 5% discount.

The Japanese firm also has an exclusivity agreement to provide up to 100% of the capital required to develop the Cauchari-Olaroz project, which would allow it proportional offtake.

Imagawa said: “We will be assisting Lithium Americas in several areas including financing, marketing, and technical support.

“We are also discussing a collaborative feasibility study on the project. Our ultimate goal is to form a joint venture with Lithium Americas in order to produce quality lithium at a competitive price."

Mitsubishi obviously has a keen interest in securing a cheap lithium feedstock for its battery plants supplying the company’s electric vehicles business. This, along with Magna’s interest, provides LAC with immediate customers when it comes into production.

It also means the company has a “big brother” to help it with the costs of project development. This could prove helpful in a market that isn’t too keen on risk currently.

Argentina, Australia and Chile accounted for 78% of total lithium production in 2009.

LAC opened on Thursday at C$1,85, falling 1,6% to C$1,82 by 15h20.

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