NetworkNewsWire
Editorial Coverage: Driven by an unprecedented ramp-up of the
electric vehicle industry in China, fears of a lithium shortage
nearly tripled the metal’s price over the last couple years.
Although in a temporary lull, demand and price pressures are
expected to consolidate then accelerate at breakneck speed as
several nations advance similar plans to increase EV use.
Insatiable demand and inadequate market supply have intensified the
global quest to bring new lithium sources to market and have
created a seldom-seen opportunity. Lithium-related stocks and ETFs
have proved to be the best way to play the electric future powered
by lithium-ion batteries. With wholly owned prime properties and a
plethora of potential lithium assets, prospective junior miner
Lithium Chile (TSX.V: LITH) (OTC: LTMCF) (LTMCF
Profile) may possibly have the
largest upside of any lithium miner this year. Other companies
investing in the full lithium cycle, from raw resource to battery
production, include the Global X Lithium & Battery Tech
ETF (ARCA: LIT), while producers such as FMC
Corporation (NYSE: FMC), Orocobre Ltd. (TSX: ORL) and
Lithium Americas Corp. (NYSE: LAC) are expanding
production.
Salt on the Salad
Lithium is, as Tesla co-founder Elon Musk called it, “the salt
on the salad” — an interesting analogy since the bulk of the
world’s lithium comes from salt brines. More importantly, Tesla and
every other company dependent on lithium need to be certain there’s
a steady supply. Even if the market triples, there are still about
185 years’ worth of lithium reserves, according to Deutsche Bank
estimates. Unmined lithium is so abundant that the next dozen years
of production will drain less than 1 percent of global reserves.
Lithium is plentiful but critical and in critically short supply.
By 2030, lithium miners will have to supply enough lithium to feed
the equivalent of 35 battery plants the size of the Tesla
Gigafactory in Nevada. Like the salt on a salad, the cost of
lithium is negligible — absolutely nothing compared to the current
price of an electric vehicle — but it is critical for the
future.
Fueling the Future
Located in the heart of South America’s “lithium triangle,”
Lithium
Chile (TSX.V: LITH) (OTC: LTMCF) is about to unearth
what may be a mother lode of the scarce metal. Quietly and
strategically, Lithium Chile has managed to amass over 152,900
hectares (590 square miles) across 15 properties in the middle of
the world’s foremost lithium reserves. Lithium Chile’s holdings
represent the largest wholly owned lithium land package of any
private operating company in all of Chile.
About half the world’s lithium reserves are in Chile,
predominantly in the arid Atacama Plateau. Lithium Chile’s assets
include 66 square kilometers directly on the Salar de Atacama,
Chile’s largest mineral salt flat and home to about 30 percent of
the world’s lithium production. The Salar de Atacama offers
multiple competitive advantages in lithium production including
good infrastructure, high concentrations of salar brines, low
processing costs, superior evaporation rates and favorable
year-round weather.
Results of field tests announced in April (http://nnw.fm/N9SHl) identified multiple high-priority
target areas at both Lithium Chile’s Salar De Atacama and Salar
Ollague properties. Large, multiple lithium brine targets of 20 to
25 square kilometers were discovered at both properties. The
Atacama property contains near-surface lithium brine values up to
1330 mg/L of lithium and the Ollague Property contains near-surface
Li brine values up to 1140 mg/L of lithium. By comparison, typical
lithium concentration needed for production in the United States is
between 190 to 200 milligrams of lithium per liter.
Lithium Chile plans to commence drilling post-haste. Lithium
Chile’s President and CEO Steve Cochrane stated, “We are delighted
with the discovery of such impressive drill target areas at Atacama
and Ollague. The results also follow the recent discovery of a
60km2 target area at another of our top Chilean projects – Helados.
. . . We have an aggressive multi-project drill program planned for
this year, which includes all three of these exciting projects and
we look forward to sharing drill results as they come through.”
For a Song
Amazingly, Lithium Chile acquired its large property reserves
for a song. Land prices in lithium-rich Chile are currently pegged
at $1,500 per hectare, but over the last three years Lithium Chile
accumulated large tracts of prime lithium-bearing properties for
only $3 dollars per hectare. Terry Walker, vice president of
exploration and the chief geologist, spearheaded the company’s
procurement of these properties. Using a 1970s French technical
report overlaid on a national database of water well hydrology and
water chemistry, he meticulously matched their information with an
extensive lands claim database. With full financial backing and
support from the company, Terry identified and Lithium Chile
acquired the best salars in proximity to the highest lithium
concentrations and closest to needed infrastructure such as roads
and power. The result may be the most promising lithium-rich land
package in Chile.
Quick math shows that Lithium Chile paid less than a half
million dollars for its entire 152,900 hectares encompassing 14
salars and one laguna, and the company currently trades at a market
valuation of just over $70 million. If Lithium Chile were able to
sell all its properties today at the current ask price of $1,500
per hectare, the imputed value would be over $222 million.
Obviously, that’s not about to happen, but it does give cause to
consider what the company may be worth if the promising field tests
turn into positive drilling results. Proved lithium reserve parcels
sell for north of $10,000 per hectare.
Demand Drivers
Commonly recognized as power sources for portable electronics,
rechargeable lithium-ion batteries are lighter and smaller than
lead acid batteries, have a high tolerance for movement and
temperature changes, recharge much faster and, importantly,
maintain their power delivery during use. These attributes are what
make Li-ion batteries essential to electric vehicles (EVs). Driving
demand much faster that anyone foresaw, the global transition to
electric vehicles has created a serious squeeze on lithium. Miners
can’t deliver it fast enough to satisfy the tsunami of EVs about to
hit the road. The world's fleet of electric vehicles grew 54
percent year over year to about 3.1 million in 2017. By 2030, the
International Energy Agency forecasts (http://nnw.fm/Ju510) that a minimum of 125 million and
as high as 220 million electric vehicles will be on the road around
the world.
Ubiquitous EVs are no pipe dream. Bloomberg New Energy Finance
forecasts electric car production will increase more than
thirtyfold by 2030, and China is leading the way. China wants a
sevenfold increase in electric vehicle sales by 2025 and is
plotting a course for phasing out fossil-fuel vehicles
altogether.
Tripling its demand forecast for lithium, Roskill, a respected
leader in international metals and minerals research, raised its
projection of lithium carbonate equivalent (http://nnw.fm/P6y7p) to more than 1 million tons in
the next eight years. With electric vehicles suddenly competing
against laptops and smartphones for lithium-ion batteries, the
demand for lithium isn’t expected to slacken anytime soon. The
planet has plenty of lithium reserves, but battery makers need
massive new lithium sources to support production, and they need it
much more quickly than anyone thought.
Where Will the Lithium Come From?
With the world racing to an electric future, there’s no doubt
that more lithium must be produced. Established producers such as
FMC Corp. (NYSE: FMC) have announced plans to
aggressively expand production, but it won’t be nearly enough to
meet demand. Estimated to be the fourth- or fifth-largest lithium
producer in the world, FMC Corporation primarily serves the
agricultural industry, providing solutions to enhance crop yield
and quality. FMC is planning to sell off around 15 percent of its
lithium business in an IPO late this year, giving the business a
market value of more than $3 billion.
Listed on the Australia and Toronto Stock Exchanges,
Orocobre Ltd. (ASX: ORE; TSX: ORL) is a global
lithium carbonate supplier and an established producer of boron.
Orocobre has announced expanded production at its Olaroz Lithium
Facility in northern Argentina. The company also owns Borax
Argentina, an established Argentine boron minerals and refined
chemicals producer, and a 29 percent interest in Advantage Lithium.
Lithium Americas Corp. (LAC) is also advancing
several lithium projects. In a joint venture with Sociedad
Quimica y Minera de Chile (NYSE: SQM), it is advancing its
Cauchari-Olaroz project with target production of 50,000 tpa of LCE
expected to come on line in 2020.
If there is any doubt at all about the lithium shortage, look at
any lithium mining company — every single one is working to rapidly
expand production. The shortage won’t end any time soon, and
increased production isn’t likely to keep pace with the burgeoning
demand. It appears that a company with vast promising resources in
the heart of the lithium triangle may be in for a promising upside
ride.
For more information about Lithium Chile, visit Lithium
Chile (TSX.V: LITH) (OTC: LTMCF).
About NetworkNewsWire
NetworkNewsWire (NNW) is a financial news and content
distribution company that provides (1) access to a network of wire
services via NetworkWire to
reach all target markets, industries and demographics in the most
effective manner possible, (2) article and editorial syndication to
5,000+ news outlets (3), enhanced press release services to ensure
maximum impact, (4) social media distribution via the Investor
Brand Network (IBN) to nearly 2 million followers, (5) a full array
of corporate communications solutions, and (6) a total news
coverage solution with NNW Prime. As a
multifaceted organization with an extensive team of contributing
journalists and writers, NNW is uniquely positioned to best serve
private and public companies that desire to reach a wide audience
of investors, consumers, journalists and the general public. By
cutting through the overload of information in today’s market, NNW
brings its clients unparalleled visibility, recognition and brand
awareness. NNW is where news, content and information converge.
For more information, please visit https://www.NetworkNewsWire.com
NetworkNewsWire (NNW)
New York, New York
www.NetworkNewsWire.com
212.418.1217 Office
Editor@NetworkNewsWire.com
Please see full terms of use and disclaimers on the
NetworkNewsWire website applicable to all content provided by NNW,
wherever published or re-published: http://NNW.fm/Disclaimer
DISCLAIMER: NetworkNewsWire (NNW) is the source of the Article
and content set forth above. References to any issuer other than
the profiled issuer are intended solely to identify industry
participants and do not constitute an endorsement of any issuer and
do not constitute a comparison to the profiled issuer. The
commentary, views and opinions expressed in this release by NNW are
solely those of NNW. Readers of this Article and content agree that
they cannot and will not seek to hold liable NNW for any investment
decisions by their readers or subscribers. NNW is a news
dissemination and financial marketing solutions provider and are
NOT registered broker-dealers/analysts/investment advisers, hold no
investment licenses and may NOT sell, offer to sell or offer to buy
any security.
The Article and content related to the profiled company
represent the personal and subjective views of the Author, and are
subject to change at any time without notice. The information
provided in the Article and the content has been obtained from
sources which the Author believes to be reliable. However, the
Author has not independently verified or otherwise investigated all
such information. None of the Author, NNW, or any of their
respective affiliates, guarantee the accuracy or completeness of
any such information. This Article and content are not, and should
not be regarded as investment advice or as a recommendation
regarding any particular security or course of action; readers are
strongly urged to speak with their own investment advisor and
review all of the profiled issuer’s filings made with the
Securities and Exchange Commission before making any investment
decisions and should understand the risks associated with an
investment in the profiled issuer’s securities, including, but not
limited to, the complete loss of your investment.
NNW HOLDS NO SHARES OF ANY COMPANY NAMED IN THIS RELEASE.
This release contains “forward-looking statements” within the
meaning of Section 27A of the Securities Act of 1933, as amended,
and Section 21E the Securities Exchange Act of 1934, as amended and
such forward-looking statements are made pursuant to the safe
harbor provisions of the Private Securities Litigation Reform Act
of 1995. “Forward-looking statements” describe future expectations,
plans, results, or strategies and are generally preceded by words
such as “may”, “future”, “plan” or “planned”, “will” or “should”,
“expected,” “anticipates”, “draft”, “eventually” or “projected”.
You are cautioned that such statements are subject to a multitude
of risks and uncertainties that could cause future circumstances,
events, or results to differ materially from those projected in the
forward-looking statements, including the risks that actual results
may differ materially from those projected in the forward-looking
statements as a result of various factors, and other risks
identified in a company’s annual report on Form 10-K or 10-KSB and
other filings made by such company with the Securities and Exchange
Commission. You should consider these factors in evaluating the
forward-looking statements included herein, and not place undue
reliance on such statements. The forward-looking statements in this
release are made as of the date hereof and NNW undertakes no
obligation to update such statements.
Source:
NetworkNewsWire
Contact:
NetworkNewsWire (NNW)
New York, New York
www.NetworkNewsWire.com
212.418.1217 Office
Editor@NetworkNewsWire.com
Global X Lithium and Bat... (AMEX:LIT)
Historical Stock Chart
From Oct 2024 to Nov 2024
Global X Lithium and Bat... (AMEX:LIT)
Historical Stock Chart
From Nov 2023 to Nov 2024
