Demand for #Lithium and EV’s and how it effects
#GlobalMarkets - (TSXV: $SLL.V) (OTCQX: $STLHF) (OTC: $BYDDF) (ASX: $GXY.AX),
Tianqi Lithium Corp (SZ:002466)
Point Roberts, WA and Delta, BC – March 1, 2019
(Investorideas.com Newswire) Investorideas.com, a leading investor news
resource covering AI and lithium stocks concludes our two-part series looking
at the increased demand for lithium for EV’s and the effect it has on the
global market.
The Houston Chronicle
recently reported on the possible foreign energy dependence
lithium could create for the US as, “Australia and Chile are the largest
producers and lithium mines have already increased production, creating a
surplus that sent prices of the metal crashing down last year. But the
long-term outlook is strong for demand and prices, analysts maintain.”
“The demand for
lithium isn’t really in question, it’s just a matter of when that demand really
kicks in,” an analyst at Benchmark Mineral Intelligence told Reuters last year.
“You just have to look at the number of battery factories that are being built
around lithium-ion technology.”
The US is not sitting
idly by though as Senator Murkowski discussed in a recent Energy and Minerals Hearing. In her opening remarks she stated, “Over
the past several years our committee has sought to call attention to the reliance
on foreign nations for our minerals. The administration has taken several
important steps but we must compliment their actions with our own legislative
actions…”
When speaking to
Simon Moores and asking questions for how the US can move to the forefront for
battery materials and minerals “We can’t afford to be a bystander when we are
looking at the future…so much of this goes back to investment.”
Standard Lithium Ltd. (TSXV: SLL.V) (OTCQX:STLHF) has no plans to remain a bystander. The specialty
chemical company is focused on unlocking the value of existing large-scale
US-based lithium-brine resources and believes new lithium production can be
brought on stream rapidly by minimizing project risks at the selection stage
(resource, political, geographic, regulatory and permitting), and by leveraging
advances in lithium extraction technologies and processes.
Securing their technology, Standard Lithium just announced they filed a patent
application with the U.S. Patent and Trademark Office covering the Company’s
novel process for the recovery of Lithium from brine. The patent applications
covers technology the Company and its Scientific Advisory Team have developed.
The
company is now funded for future growth with news announced it entered into a funding equity agreement for gross
proceeds of $10,500,000 CAD.
Foreign competition
is fierce though as BYD Company LTD. (OTC:BYDDF) recently announced plans for a new battery gigafactory to
support its ambitious electric vehicle plans in China which will be able to
produce 20 GWh of battery cells for its electric vehicles.
The company is
investing 10 billion yuan (~$1.49 billion USD) in the facility located in
southwest China’s Chongqing Municipality.
At an output 20 GWh,
it would make BYD’s new factory one of the largest battery factories in the
world.
BYD also reported preliminary net profit for 2018 that was 31.4 percent
lower than a year earlier, pinning the blame on intensifying competition in the
world's biggest auto market, for example Tesla’s own Gigafactory 1 in Nevada, which is currently believed to be
the largest battery cell factory in the world, has an estimated output of about
35 GWh per year.
Tianqi Lithium Corp. (SZ:002466), one of the world’s top 3 lithium
producers, after more than half a year, recently closed its deal to purchase a 23.77% stake in rival
Sociedad Quimica y Minera de Chile SA after clearing several regulatory
hurdles.
This $4.1 billion
deal is seen by some as a risky move as Tianqi, which has around 12 billion
yuan ($1.77 billion) in assets, relied on leverage to make the investment.
“The tie-up with SQM is a hard-won deal, and
we are looking at the fast development of the lithium industry over the next
five to 10 years,” said Wu Wei, the company’s President, in an interview with Caixin (link in Chinese).
The hype for lithium is helping many company
stocks rally such as Galaxy Resources
Limited (ASX:GXY) who reported their quarterly
results for the three month
period ending December 31st, 2018. The company reported closing cash and liquid
assets of 41.4 million USD and zero debt.
The company also included a market analysis
commenting that “Market indicators observed throughout Q4 2018 were
illustrative of the robustness of the maturing lithium market. Domestic lithium
chemical prices within China plateaued, following several periods of retreat,
which many have interpreted as signaling the bottom of the pricing cycle within
this region. Key indicators point to a more buoyant market environment
throughout 2019 with Chinese domestic prices for lithium stabilizing during the
last quarter and the combination of strong demand growth and supply challenges
to support a favorable market moving forward.”
US companies like
Standard Lithium may have their work cut out for them in 2019 as Australian and
Chinese producers also race to meet the demand the EV sector is placing on
lithium. There is a new global energy race for lithium, and it’s a race which
everyone is hoping to win.
Investor Ideas
directory of lithium stocks: mining stocks directory and cleantech stock directories, relating to batteries.
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