Lithium Market Soaring, Driven by Battery-Powered Electronics, Automotive Industries
March 28 2017 - 8:30AM
InvestorWire
New York, New York (NetworkNewsWire) – Lithium remains a key
commodity for the future due primarily to a rising worldwide demand
for rechargeable lithium-ion batteries. Used to power many consumer
electronics and electric vehicles, the market for lithium-ion
batteries is rapidly growing, on pace to reach $46.21 billion in
the next five years. To meet this rising demand, leading lithium
mining companies such as MGX Minerals, Inc. (CSE: XMG OTC:
MGXMF) (MGX Minerals
Profile), Albemarle Corp. (ALB), Sociedad Química y Minera de
Chile S.A. (SQM), FMC Corp. (FMC) and Galaxy
Resources Limited (GALXF) are tirelessly working to find
new, cost-effective ways to successfully extract this valuable
mineral.
A key player on the lithium mining market, with a proprietary
and lucrative extraction method, is MGX Minerals, Inc.
(MGX Minerals
Profile). MGX Minerals uses an innovative extraction
method called petrolithium, under which lithium and other valuable
minerals are sourced from petroleum brine water in a faster and
more environmentally friendly way than typical extraction methods
such as hard-rock mining or solar evaporation. The company was the
first to recognize the potential of petrolithium and to implement a
business strategy based on this method. With its engineering
partner, PurLucid Water Treatment Systems, MGX has patented and
patent-pending technology. The company is positioned as a front
runner in the industry – an enviable spot further supplemented by
key industry relationships. MGX Minerals has established
partnerships with major oil and gas companies and has acquired more
than 1.5 million acres of land in regions neighboring oil fields
across Canada and the United States.
MGX Minerals’ petrolithium extraction process is based on
proprietary technology developed by its engineering partner
PurLucid Treatment Solutions, which separates oil from the
petroleum brine that contains lithium while also treating the
resulting wastewater for reuse as clean water. The company recently
reported a major advancement in the development of its filtration
and extraction technology after PurLucid successfully upgraded
petrolithium brine from one of the company’s largest assets – the
Sturgeon Lake Petro Lithium Project in Alberta, Canada. By using a
new process that concentrates lithium while removing contaminants,
PurLucid was able to upgrade brine from a concentration of 67mg/L
Li to 1600mg/L Li during the filtration and pre-treatment stage of
the extraction process. MGX and PurLucid are preparing for
deployment of this technology, which has the potential to
significantly lower the cost of the entire petrolithium
process.
With high energy density that makes them ideal for use in
portable equipment, rechargeable lithium-ion batteries are used
mostly in electronics such as laptops, mobile phones, gaming
equipment, etc. The largest industrial consumer of lithium in this
sector is Panasonic Corporation (OTC: PCRFY), which manufactures a
wide range of electronics powered by rechargeable batteries. The
growing popularity of electric vehicles has made the automotive
industry another large consumer of lithium, with Tesla
(TSLA) the main driving force in this particular segment.
Tesla is producing a wide range of electric vehicles and also has
plans to start manufacturing its own lithium-ion batteries, in
collaboration with Panasonic. According to an Allied Market
Research report (http://nnw.fm/b5eTY), the global lithium-ion battery
market is expected to continue expanding at a compound annual
growth rate of 10.8 percent and reach $46.21 billion by 2022. This
is obviously positive news for the lithium mining market, as both
lithium prices and well-positioned associated mining companies are
likely to continue growing.
Arguably the largest lithium producer in the world at the moment
is Albermarle (ALB), a specialty chemical company
whose portfolio also includes bromine specialties, refining
catalysts, fine chemistry services and more. Based in Charlotte,
North Carolina, Albermarle became a lithium superpower after
acquiring Rockwood Holdings in January 2015, which gave it control
over about 35 percent of the world’s lithium market. It is
estimated that the company’s lithium sales were about $508.8
million in 2015, considerably higher than what other industry
players reported. Albermarle extracts its lithium from three
primary sources: Silver Peak, Nevada; Salar de Atacama, Chile, and
a 49 percent stake in Talison Lithium’s hard-rock Greenbushes mine
in Australia. The company recently announced plans to expand
operations at Greenbushes and more than double the production of
lithium carbonate there from 80,000 metric tons to over 160,000
metric tons per year.
With a strong global presence in various industries and
applications, Sociedad Química y Minera de Chile S.A.
(SQM) is currently the second largest lithium producer in
the world, holding about 22 percent of the market. Although the
Chile-based company faced some challenges in 2015, including being
part of a broader corruption scandal in the country, its lithium
revenue business continued to grow, generating revenues of more
than $223 million. The same trend continued in the first half of
2016, when SQM reported a 92.1 percent increase in its lithium and
derivatives business revenue. The company extracts its lithium from
underground brine at Chile’s Atacama Salt Desert. Last year, SQM
partnered with Lithium Americas Corp. (OTC: LACDF) to develop a
lithium project in Jujuy, Argentina – the company’s first lithium
production investment outside Chile.
Often listed as the third largest player in the industry
alongside Albemarle and SQM, FMC Corporation (FMC)
had lithium segment revenues of $238 million in 2015, and reported
an 11.5 percent increase in the first six months of 2016. The
company extracts its lithium from its own source, the Salar del
Hombre Muerto in Argentina, and also runs its own processing and
production facilities where it refined lithium carbonate obtained
from lithium chloride into other products such as lithium
hydroxide, lithium metals, hypochloride and bromide. FMC
Corporation has a proprietary brine extraction technique that
reportedly generates the highest-purity lithium available in the
entire industry. Met with growing demand, the company is looking to
diversify its supply sources and has recently signed a long-term
supply agreement with Nemaska Lithium, Inc., under which the
Canadian company will provide FMC with 8,000 metric tons of lithium
carbonate a year.
Another important, although smaller lithium producer is
Australia’s Galaxy Resources Limited (GALXF), with
extraction projects in Argentina, Canada and Western Australia.
Anticipating a growing demand for the mineral, the company is
positioning itself to become a key supplier of high-quality lithium
by continuing to develop and expand its current assets. Galaxy
Resources Limited owns and recently commenced operations at Western
Australia’s Mt Cattlin Spodumene Mine and Quebec, Canada’s James
Bay Lithium Pegmatite Project. In addition, the company is
expanding operations at Argentina’s Sal de Vida project located in
the so-called Lithium Triangle, which accounts for approximately 60
percent of the world’s lithium production.
The above companies, among others, are focused on addressing
growing demand for lithium; however, there is another component to
consider when exploring plays in this sector. Consider this:
according to data from the U.S. Geological Survey, each year 20-30
billion barrels of brine are generated by oil and gas production
operations, which is 70 times the volume of all liquid hazardous
wastes generated in the United States. As such, the global oil
industry is hungry for technology to cost-effectively treat oil
wastewater in an environmentally friendly manner.
With its successful extraction of lithium from oil field brine,
MGX Minerals has a first-mover advantage to answer the call for
efficient wastewater treatment as well as meet the demand for
lithium and its growing applications – an achievement that would
benefit the environment, oil and gas producers around the world,
and company shareholders. For solution providers like MGX Minerals,
the potential here is incredible.
For more information on MGX please visit MGX Minerals
or https://www.MGXminerals.com
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