The Post Holidays Lithium Catch Up

Now that the holidays are over, it’s time to catch up on the biggest stories that have occurred over the last two weeks:   

The EV boom which in turn fuels the Lithium boom is best summed up in a piece by the Economic Times that stated “Car-owning households soared from 8% to 80% in a decade, as the Ford Model T became 62% cheaper in 13 years , and GM and DuPont developed an innovative financing mechanism called car loans.”  This really sums up what will occur when the world transitions from the Internal Combustion Engine (ICE) to Electric Vehicles over the next several years.

There’s a current talent crunch when it comes to mining Lithium.  In particular, the many upstart projects trying to launch in Argentina are threatened by a dearth of talent.  For example, SQM is sending 50 of its engineers from Chile to Argentina in order to help shore up its JV project with Lithium America’s.  This challenge could potentially stop new upstarts from launching or hinder projects once production has begun.  

A bullish sign for the EV demand picture came about when China announced it would extend a tax rebate on purchases of new-energy vehicles (NEV) until the end of 2020. Much of the EV story is really centered around China and the demand coming out of it.  As a result, this is certainly a bullish sign for the EV demand picture.  

Another bullish sign for the EV demand picture came out of the WSJ, which is increasingly covering the EV story.  “Old line industrial companies” are trying to “supply the car makers of the future.”  

With regards to particular Lithium companies, in case you missed it, here are some quick recaps of what has happened as of late:  

  • Lithium X was acquired by NextView capital.  In our 2018 outlook, we said that consolidation in the industry will rapidly increase.  
  • Orocobre stated that the tight market continues into the first half of 2018 and that pricing will increase by 25% vs. the second half of 2017.  
  • Lithium America’s confirmed that their shares will be listed on the NYSE sometime in January, making them one of the first pure play Lithium companies traded on a major U.S. stock exchange.
  • Pilbara Minerals inked a deal with Atlas Iron supplying the company with direct shipping ore (DSO).  
  • SQM, which has had a long outstanding issue at hand with the Chilean govt, is in the process of reconciliation which could come to an end very soon.  Further good news for SQM, the Chilean people elected a new government in November which is pro business and should be another boost for the company as well as all Lithium producers in Chile.  

Scientists looking into Lithium rich batteries called “super batteries” which would power EV’s 50% farther.  Can you imagine the Lithium demand which would come of that?  

President Trump signed an executive order which stated two main objectives:

  • Identifying new sources of critical minerals in the U.S. for the U.S.
  • Cutting down on the leasing and permitting process.  
    • Companies that could be positively affected by such an order include ALB, FMC, Piedmont, Pure Energy, Lithium America’s and others.  

Much has been written about the Electric charging evolution such as:

  • Volkswagen to install 2,800 U.S. electric vehicle charging stations
  • Sweden is subsidizing installation of home chargers for Electric Vehicles
  • Shell, made its second large Electric based acquisition of 2017, buying an electricity provider. As reported by the NYtimes companies such as Shell are “striving to remain relevant in case the demand for oil, which is currently growing strongly, wanes in the coming decades.

ICYMI, we published the following pieces over the last few weeks:  

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