Can The US
Avoid Foreign Energy Dependence? #Lithium Demand a Boon for Chinese and
Australian Producers-(TSXV: $SLL.V) (OTCQX: $STLHF)(OTC: $BYDDF) (ASX:
$GXY.AX), Tianqi Lithium Corp (SZ:002466)
Point Roberts WA,
Delta BC - February 28, 2019 - 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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