Project Updates, Consolidation, and… Cryptocurrency Mining?

It was another busy week in the Lithium and EV industry.  Luckily, we’re here to recap all of the relevant news items for you:

Lithium Company News- While mining companies’ updates, press releases, and presentations can all be found in our Lithium News Feed as soon as they hit the tape, here are a few of the significant releases from this past week:

  • Nemaska Lithium announced that they delivered the second shipment of battery grade lithium hydroxide from their Whabouchi concentrate and released product purity specifications.
  • FMC made a significant step toward separating their lithium business by revising operating agreements in Argentina.  Furthermore, FMC reconfirmed that it will at least double its production in Argentina during the next several years, with total annual output expected to exceed 40,000 metric tons of lithium carbonate equivalents (LCE).
  • Altura Mining provided an update on their “aggressive” timeline for commissioning and production on Monday.  The company appears to be nearing the completion of Stage 1 construction of their lithium project, and on track for commissioning in Q1 of this year, with the first Li concentrate sales coming in Q2.
  • On Monday, Baird Analyst Ben Kallo upgraded Albemarle to Outperform raising it’s price target to $152.  In his note he mentions “Albemarle’s production expansions remain on track, and the company is the best way to play the multiyear lithium growth cycle.”
    • We agree, having published our analysis on the company a few months ago, but welcome any wall street analysts joining in on the discussion.

 

Lithium mining vs. Crypto mining: When we published our Bitcoin vs. Lithium post last month, we did so to compare two emerging investment themes, and their outlooks. We had no idea that actual lithium miners were looking to ride the blockchain mania (however we weren’t surprised when we found out either).

Investors should be wary of any company looking to cash in on this trend by mentioning cryptocurrency operations.  Much like how companies added “dot com” to their names, or established websites during the 1999 tech bubble, companies today are adding blockchain to their name and talking up cryptocurrency mining related operations in an effort to boost stock prices.  We are not saying any or all of these companies are misleading investors, but it seems fishy, and investors should keep their guard up.  Here are a couple of examples in the lithium mining space of such companies:

  • In a letter to shareholders, Lithium Exploration Group CEO, Alex Walsh, discussed ongoing operations as well as… Bitcoin?  He says “I think setting up a cryptocurrency mining operation could be very interesting. I am not going to put all of our eggs in that basket, but it is an emerging industry that we would be silly not to explore as a part of our overall strategy.”  
  • US Lithium Corp (OTC QB:LITH) acquired the website “kaboomcoin.com” and other blockchain based technology assets from Czech Republic software developer Bank Call s.r.o. for $100,000 in cash and 4,500,000 shares of LITH.  Furthermore, the company previously attempted to enter the legal marijuana market.  We thank Cory Groshek for bringing this company to our attention.

 

Consolidation- It feels like we’ve been beating this drum for a while, but we’ll say it again: consolidation is coming!  

  • The Australian wrote an interesting piece called “Chinese, carmakers join race for lithium miners” discussing how “A string of recent big-ticket lithium investments by Chinese groups could well be the start of deal-making frenzy across the sector.”  In it, Bacanora Minerals CEO, Mark Hohnen said their company has been inundated with interest from Chinese groups and international carmakers interested in getting hold of lithium.
  • This piece came a few weeks after we learned that Lithium X was being acquired by NextView New Energy Lion Hong Kong Limited.

 

The Auto Companies

  • Tesla’s massive Energy Storage battery in Australia was such a huge success that another Australian state, Victoria has tapped the company to build one for them as well.
  • The Wall Street Journal wrote an interesting piece outlining miners’ plans to cash in on the EV related cobalt boom by ramping up operations.
  • Toyota announced at CES that they are working with Uber, Didi, Mazda, Amazon, and Pizza Hut to develop a self driving shuttle that can be used to deliver people or packages to their destination.  They are hoping to have it working by the 2020 Olympic games.  Given the collaboration of companies across many different industries, we see the true potential of autonomous driving technology. Furthermore, the good news for our readers is that the autonomous future will based on EVs!

 

Other Interesting News

  • In a crazy story out of Germany, a couple discovered that they’re land is sitting ona lithium deposit worth £5 billion.  Sadly, according to German mining laws, they won’t make a penny off of it.
  • The Financial Times published a great article looking into the race to move beyond the lithium-ion battery.  While many companies have claimed to make breakthroughs in new technologies, the article does note that most of these breakthroughs have been enhancements, rather than replacements, for lithium-ion batteries (such as Samsung’s graphene ball).

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