Lithium Miners News For The Month Of July 2021
Summary
- Lithium prices were higher the past month, notably hydroxide and spodumene. "Lithium price tipped to rise after warning of ‘Perpetual Deficit’."
- Lithium market news - Ganfeng says lithium may rally to boom-time. SK Innovation pumps $26bn into EV batteries to quintuple output. LG Chem to invest $5B to produce battery materials.
- Lithium company news - SQM/Wesfarmers Covalent Lithium Kwinana LiOH plant receives approval from the WA government. Covalent Lithium begins Mt Holland construction.
- Tianqi Lithium: Closes $1.4 billion asset sale to Australia's IGO. Galaxy Resources' Mt Cattlin record quarterly production. Pilbara Minerals restarts Ngungaju Plant (formally Altura Lithium Operation).
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Welcome to the July 2021 edition of the lithium miner news. July saw lithium prices mostly move higher again with some news of a shortage of spodumene supply emerging. The lithium producers continue to do very well and most of them are now planning to expand production to meet surging lithium demand. The battery megafactory count is at 211 and rising.
Lithium spot and contract price news
Asian Metal reported during the past 30 days, 99.5% lithium carbonate China spot prices were not updated. Lithium hydroxide prices were up 3.81%. Spodumene (6% min) prices were up 2.36% over the past month.
Fastmarkets (formerly Metal Bulletin) reports 99.5% lithium carbonate battery grade spot midpoint prices CIF China, Japan & Korea of US$14.00/kg (US$14,000/t), and min 56.5% lithium hydroxide battery grade spot midpoint prices CIF China, Japan & Korea of US$15.50/kg (US$15,500/t).
Benchmark Mineral Intelligence as of mid-July reported China lithium carbonate prices of US$12,800/t (technical grade) and US$13,650 (battery grade), and for lithium hydroxide prices of US$15,500/t, and stated: "market contacts report expectations that spodumene feedstock prices will rise above $800/tonne (FOB Australia) in late Q3 as converters scramble for material".
Metal.com reports lithium spodumene concentrate (6%, CIF China) price of USD 735/mt, as of July 16, 2021.
Lithium carbonate & hydroxide, battery grade, CIF China, Japan & Korea
Source: Fastmarkets
Lithium demand versus supply outlook
2021 IEA forecast growth in demand for selected minerals from clean energy technologies by scenario, 2040 relative to 2020 - Increases Of Lithium 13x to 42x, Graphite 8x to 25x, Cobalt 6x to 21x, Nickel 7x to 19x, Manganese 3x to 8x, Rare Earths 3x to 7x, And Copper 2x to 3x
Source: International Energy Agency 2021 report
Benchmark Mineral Intelligence lithium demand vs. supply forecast
Source: Core Lithium courtesy of Benchmark Mineral Intelligence
Another lithium demand vs. supply chart
Source: Lithium South company presentation
UBS's EV metals demand forecast (from Nov. 2020)
UBS forecasts year battery metals go into deficit
Source: UBS courtesy Carlos Vincens LinkedIn
BMI forecasts lithium deficits growing this decade
Source: Benchmark Mineral Intelligence (no link as via email)
On June 30, Mining.com reported:
CHART: Study predicts over 400% increase in copper, lithium, nickel battery demand. BNEF predicts annual demand for lithium-ion batteries will pass 2.7 terawatt-hours per year by 2030 - a 35% increase from the analytics company's forecast made last year.
2021 BNEF forecasts for battery metals demand surge (2030 battery demand forecast to be 2.7 TWh)
Source: Mining.com courtesy BloombergNEF
Lithium market and battery news
On June 25, Bloomberg reported:
China giant Ganfeng says lithium may rally to boom-time high... "The industry is rapidly growing and we have a very upbeat forecast on lithium consumption," Vice Chairman Wang Xiaoshen said in an interview. "I can't rule out the possibility for lithium prices to bounce back to the 2018 level."
On June 29, CleanTechnica reported:
CATL will now supply lithium-ion batteries to Tesla until December 2025. CATL announced that it signed a Production Pricing Agreement with Tesla on Friday in order to further extend and deepen the friendly and cooperative relationship with Tesla. The new agreement is a continuation of the one signed by both companies in February 2020. In that contract, CATL agreed to supply lithium-ion batteries to Tesla from July 2020 through June 2022.
On June 30, TheElec reported:
CATL sees battery sales surge 272% in first 5 months of 2021... A total of 88.4GWh of electric car batteries were used from January to May, 2.6 times that of the same time period a year ago.
On July 1, Reuters reported:
Shortages flagged for EV materials lithium and cobalt... High lithium prices have failed to spur investment in new capacity due to lower long-term contract prices, while the problem for cobalt supply is that it is mainly a byproduct of copper, meaning investment decisions are based on copper prices... BMI's George Miller forecasts a LCE deficit of 25,000 tonnes this year and expects to see acute deficits from 2022. "Unless we see significant and imminent investment into large, commercially viable lithium deposits, these shortages will extend out to the end of the decade," Miller said... Analysts at Roskill forecast cobalt demand will rise to 270,000 tonnes by 2030 from 141,000 last year... "If we look out to the mid-2020s, we could really do with another Katanga."... "That nickel is on the verge of a supercycle is hype. It will be over-supplied until at least the mid-2020s."
On July 2, Nikkei Asia reported:
SK Innovation pumps $26bn into EV batteries to quintuple output. South Korean company aims to be in top 3 of the field by 2022. SK Innovation will spend 30 trillion won ($26.5 billion) on its electric vehicle battery business over the next five years, the South Korean energy and materials company said Thursday, looking to multiply production capacity by a factor of five to capture surging global demand. The world's sixth-largest battery producer reports already having orders worth 130 billion won on its books.
On July 2, Seeking Alpha reported:
General Motors pulls the lithium switch with strategic investment. General Motors announces a strategic investment and commercial collaboration with Controlled Thermal Resources aimed at securing local and low-cost lithium. The company says the lithium will be produced through a closed-loop, direct extraction process that results in a smaller physical footprint than other methods.
On July 2, Forbes reported:
Lithium price tipped to rise after warning of 'Perpetual Deficit'. If you're investment portfolio is not exposed to lithium, a key metal in the batteries which power electric vehicles (EVs), then consider the price effect on a commodity said to be heading for a "perpetual deficit." That remarkable description of surging demand for lithium as EV sales accelerate incorporates the second price driver, a lack of supply response from the world's major lithium miners. Two investment banks this week upgraded their assessment of lithium in light of the increasing demand and sluggish supply growth with both upgrading their price forecasts for the metal... "Lithium prices have risen sharply since February and we do not believe it is temporary," Credit Suisse said... "We now forecast a wider market deficit for lithium in calendar 2021 than previously," Macquarie said. "The deficit is expected to grow in calendar 2022 and widen further in 2023 before some supply response starts to close the gap." But, the supply response could be too little, too late to contain the lithium price... "In the longer term, we believe the lithium market is likely to be in a perpetual deficit," Macquarie said.
On July 2, Benchmark Mineral Intelligence reported:
Nissan & Envision AESC to spearhead UK lithium ion economy with 25 GWh battery gigafactory. Through an initial investment of £450 million, Envision AESC will build its second UK megafactory in Sunderland, while Nissan is committing £423 million into electric vehicle production in the region.
On July 8, Bloomberg reported:
A $35 billion plan for Korean EV battery giants to catch China. LG Energy Solution Co., SK Innovation Co. and Samsung SDI Co. will be key players, driving investment in research and development and battery production.
Current battery makers capacity compared
Source: BloombergNEF
On July 8, Reuters reported: "S.Korea's LG Chem, LGES pledge $13 bln in battery investment by 2030."
On July 9, Korea IT Times reported:
POSCO Chemical to build a new cathode materials plant for EV batteries. POSCO Chemical plans to invest about 600 billion Korean won from 2022 to build a cathode material plant with an annual capacity of 60,000 tons on 120,000 square meters of land in Pohang City's Yeongilman General Industrial Complex. Once the plant is built, POSCO Chemical will secure an annual production capacity of 160,000 tons of cathode materials in Korea along with Gwangyang and Gumi plants.
On July 9, Electrek reported:
Tesla patent reveals Elon Musk's 'table salt' lithium extraction process that could slash costs. Tesla summarizes its own new method in the patent application's abstract: "Processes for extracting lithium from a clay mineral and compositions thereof are described. The extraction process includes providing a clay mineral comprising lithium, mixing a cation source with the clay mineral, performing a high-energy mill of the clay mineral, and performing a liquid leach to obtain a lithium rich leach solution." So it's a little more complicated than just adding table salt, but the main cation source described by Tesla in the patent application is indeed NaCl, sodium chloride (aka table salt).
On July 13, Reuters reported:
UK, European manufacturers want battery supply chain nearer home -survey. British manufacturers and those in other parts of Europe want to move more of the supply chain for batteries used in electric cars and renewable energy away from China and closer to their plants, a survey showed on Tuesday... Some 80% of firms said they wanted to move their supply chain for batteries closer to production, rising to 84% of British firms which were seeking to make changes within the next 12 months.
On July 13, Business Wire reported:
"SES, a lithium-metal battery supplier for electric vehicles, to list on NYSE via combination with Ivanhoe Capital Acquisition Corp. (NYSE: IVAN).
Transaction will create first publicly-traded, hybrid Lithium-Metal battery supplier combining high-energy density with efficient manufacturability at scale.
■ Upon closing, combined company to trade under symbol "SES"
■ Pro forma implied equity value of combined company of approximately $3.6 billion, inclusive of a $300 million earn-out
■ Transaction expected to provide SES up to $476 million in gross proceeds to fund expansion plans, including $200 million from fully-committed common stock PIPE at $10.00 per share
■ PIPE anchor investors include several leading automakers: General Motors, Hyundai Motor Company, Geely Holding Group, Kia Corporation, and SAIC Motor
■ Other PIPE investors include Koch Strategic Platforms, LG Technology Ventures, Foxconn, Vertex Ventures, Fidelity Investments Canada ULC (certain funds), and Franklin Templeton
■ Existing SES investors include SK Inc., General Motors, Hyundai Motor Company, Kia Corporation, Temasek, Tianqi Lithium, Vertex Ventures, Applied Materials, and SAIC Motor."
On July 14, The Financial Review reported:
Plenty of spark left in lithium's bullish run. A perfect storm of significant undersupply and roaring demand for electric vehicles has analysts declaring the market for the metal has officially turned a corner.
On July 14, Teslarati reported:
Tesla battery partner LG Chem to invest $5B to produce EV battery materials. LG Chem plans to invest 6 trillion KRW ($5 billion) to produce EV battery materials for separators, cathodes, anodes, and other key elements... The EV battery supplier expects the battery materials market to grow quickly between 2021 to 2026, from 39 trillion ($34 billion) KRW to 100 trillion KRW ($87 billion)... "Over 30 projects including M&As, joint ventures (JV), strategic investments, etc. to make a paradigm shift to an ESG-based (environmental, social, and governance) business portfolio are being reviewed," said LG Chem's CEO. "This will be the most revolutionary change since the establishment of the company that will upgrade the value and sustainability of LG Chem, and tangible achievements will become [evident by] the second half of this year."
Note: For details on LG Chem's supply chain you can read my exclusive Trend Investing article: "Choosing EV Metal Miners And Battery Manufacturers By Connecting The Supply Chain - December 2019."
On July 14, Business Insider reported:
Bank of America says EV batteries will reach a 'sold out' scenario in the next 5 years - and gives 6 related stocks set to benefit from the supply-demand mismatch. Bank of America sees EVs representing 67% of total car market share by 2030.
On July 15, KoreaTimes reported:
LG Chem to invest W10 trillion in next-generation businesses. LG Chem will invest 10 trillion won ($8.7 billion) until 2025 to develop eco-friendly materials, rechargeable battery parts and pharmaceutical products... Among the 10-trillion won investment plan, the largest amount of money will be used to develop materials for batteries to capitalize on the fast-growing electric mobility battery business. Under the scheme, LG Chem will focus on improving the production capacity of various materials for batteries such as cathodes, anodes, separators and adhesive products. LG Chem aims to become the industry-leading cathode material company as it begins construction of a cathode-making plant in Gumi starting this December. With the new factory, which will have an annual production capacity of 60,000 tons, LG Chem's cathode production capacity will rise to 260,000 tons in 2026 from around 40,000 tons last year.
On July 15 CNBC reported:
Battery start-up Enovix begins trading after SPAC merger in latest clean tech deal. Enovix creates batteries with silicon anodes, which means greater energy density... Through the merger and associated private investment Enovix raised $405 million, which will be used to ramp up production. The company has one factory in Fremont, California, that's almost complete, with plans for another facility in place... The company has ambitious revenue targets. Enovix plans to go from essentially zero revenue this year, to $11 million next year, and then into the mid-$100 million range by 2023.
On July 19, Business Wire reported:
FREYR advances clean battery cell production in Norway... has reached a final investment decision ("FID") by the FREYR Board of Directors to proceed with the construction of the Customer Qualification Plant ("CQP") and first battery cell production line in Mo i Rana, Norway.
On July 21, Yahoo Finance reported:
Global EV battery industry will be 'sold out' by 2025: BofA... "Our updated EV battery supply-demand model suggests the global EV battery supply will likely hit [a] 'sold-out' situation between 2025-26, with its global operating rates reaching above 85%," the report reads. The report states that BofA expects global battery shortages to intensify further in the period between 2026 to 2030 due to a continued rise in EV penetration across all markets, reflecting an "incrementally bullish" outlook for the EV industry. BofA Global Research lifted its estimated global penetrations for all EVs, including battery electric vehicles (BEVs) and plug-in hybrid electric vehicles (PHEVs), to 23%, 40%, and 67% for 2025, 2030, and 2040, respectively.
Lithium miner news
Albemarle (NYSE:ALB)
On June 30, Seeking Alpha reported:
Albemarle launches new lab to build better batteries for electric vehicles. Albemarle says it opened its Battery Materials Innovation Center at its Kings Mountain, N.C., site in support of its lithium hydroxide, lithium carbonate and advanced energy storage materials growth platforms. BMIC will develop lithium products 2x-3x faster than previously... The lab also will create a razor-thin form of lithium that will make batteries cheaper and more powerful..."
On July 15, Seeking Alpha reported:
Albemarle nears record high as Deutsche Bank names catalyst call buy... believing the upcoming Q2 earnings release will help shift investor focus to what promises to be a strong 2022. Deutsche Bank analyst David Begleiter sees Albemarle's Q2 lithium earnings growth surging by 70%-plus, driven by the start-up of two major projects in Chile and Australia that will increase the company's lithium capacity by more than 80%.
Upcoming catalysts:
H2 2021 - 50ktpa Kemerton Lithium Hydroxide Plant converter in WA due for completion (60:40 joint venture between Albemarle and Mineral Resources Limited).
Sociedad Quimica y Minera S.A. (NYSE:SQM), Wesfarmers [ASX:WES] (OTCPK:WFAFY), Covalent Lithium (SQM/WES JV)
On July 16, SQM announced: "Covalent Lithium receives Ministerial Statement for refinery plant."
Source: SQM website
On July 20, Australian Mining reported:
Covalent Lithium begins Mt Holland construction. Covalent Lithium has received the approvals it requires to enter the construction and operational phases at the Mt Holland lithium project in Western Australia. Covalent is a joint venture between Wesfarmers and Sociedad Quimica y Mineral de Chile S.A. "The Mt Holland lithium project has now received all critical approvals, and construction and project development have commenced," Wesfarmers stated... The Mt Holland project is comprised of Mt Holland mine, a spodumene concentrator and the lithium hydroxide refinery which is located in Kwinana... The company is targeting a mine life of more than 40 years at 45,000-tonne production rate, with an 85 per cent targeted recovery of spodumene in its concentrator. According to Covalent, the spodumene concentrator will produce more than 340,000 tonnes of spodumene concentrate per year... Mt Holland will produce lithium hydroxide from the second half of 2024.
Investors can read the SQM's latest presentation here.
SQM (50%)/Wesfarmers (50%) Kwinana 45,000 tpa LiOH refinery held via Covalent Lithium Pty Ltd. (50/50 JV)
Source: Covalent Lithium (SQM/Wesfarmers JV)
Catalysts: H2, 2024 - Mt Holland production to begin (SQM/Wesfarmers JV)
Jiangxi Ganfeng Lithium [SHE:002460] [HK: 1772] (OTCPK:GNENF), Mineral Resources [ASX:MIN] (OTCPK:MALRF), International Lithium Corp. [TSXV:ILC] (OTCPK:ILHMF)
On July 8, International Lithium Corp. announced: "International Lithium announces measured + indicated resource of 6.85 million tonnes LCE at Mariana Lithium Brine Project." Highlights include:
- "...Ganfeng have reported that an Environmental Impact Report approval has been received from the Salta regional government in Argentina for the construction of a plant with a designed annualized capacity of 20,000 tonnes per annum of lithium chloride.
- The Salta regional government has disclosed in a news release following its discussions with Ganfeng that the likely project expenditure from now to bring the Mariana Project to full production is around US$600 million."
Note: A Mining.com report last month stated: "The Chinese company (Ganfeng Lithium) in March announced an ambitious plan to increase its lithium production capacity roughly fivefold to 600,000 tonnes of lithium carbonate equivalent a year."
(Chengdu) Tianqi Lithium Industries Inc. [SHE:002466]
On June 30, Market Screener reported: "Tianqi Lithium: Closes $1.4 billion asset sale to Australia's IGO."
Tianqi Lithium (51%)/IGO (49%) Kwinana 48ktpa LiOH refinery
Source: Tianqi Lithium
Livent Corp. (LTHM)[GR:8LV] - Spun out from FMC Corp. (NYSE:FMC)
On June 30, Livent Corp. announced: "Livent publishes 2020 Sustainability Report."
Orocobre [ASX:ORE] [TSX:ORL] (OTCPK:OROCF)
On July 5, Orocobre announced: "Scheme Booklet registered by ASIC." Highlights include:
"its proposed merger with Orocobre pursuant to which Orocobre will acquire all of the shares in Galaxy (Galaxy Shares) by way of a scheme of arrangement (Scheme)..."
On July 9, Orocobre announced:
Lithium pricing update and quarterly report date. Orocobre Limited. advises that production for the June 2021 quarter was 3,300 tonnes of lithium carbonate. Approximately 66% of production was battery grade lithium carbonate which is a significant increase on the June 2020 quarter that was 21% battery grade lithium carbonate. Sales of Olaroz lithium carbonate during the June 2021 quarter were 2,549 tonnes at US$8,476/tonne FOB1, with pricing up 45% on the March 2021 quarter. Lithium prices received by Olaroz are now up more than 170% in the last nine months.
On July 22, Orocobre announced:
Quarterly report of operations for the period ended 30 June 2021. Olaroz Lithium Facility (Olaroz) operations continue to deliver improving cashflows with a Gross Cash Margin of $4,371/tonne following further improvement in the sales price of lithium chemicals and a continued focus on costs. Realised average price was US$8,476/tonne up 45% quarter on quarter [QoQ] on a free on board basis [FOB2] with prices up 170% over the past nine months. Costs were US$4,105/t3. The proportion of battery grade production reached a record level at 66%. Market conditions continue to improve which is reflected in increasing price forecasts by analysts and industry commentators.
Upcoming catalysts include:
- Mid 2021 - Proposed merger with Galaxy Resources.
- Q1 2022 - Naraha lithium hydroxide plant (10ktpa) commissioning (ORE share is 75%).
- H1 2022 - Olaroz Stage 2 commissioning followed by a 2 year ramp to 25ktpa. When combined with Stage 1 total capacity will be 42.5ktpa.
You can read the latest investor presentation here.
Galaxy Resources [ASX:GXY] (OTCPK:GALXF)
On July 7, Galaxy Resources announced:
Important information regarding dispatch of Scheme Booklet to Galaxy Shareholders. On behalf of Galaxy Resources Limited [ASX: GXY] (Galaxy), I am pleased to provide an update on the proposed merger with Orocobre Limited [ASX:ORE, TSX:ORL] (Orocobre), pursuant to which Orocobre will acquire all of the shares in Galaxy (Galaxy Shares) by way of a scheme of arrangement (Scheme).
On July 22, Galaxy Resources announced: "June 2021 quarterly activities report." Highlights include:
Production & Operation
Mt Cattlin, Australia
- "Record quarterly production achieved of 63,321 dmt of lithium concentrate, with specifications in line with customer requirements.
- Unit cash operating costs for the quarter of US$328/dmt, a 17% decrease compared to the previous quarter.
- 48,499 dmt of lithium concentrate was shipped during the quarter plus an additional 2 shipments of 31,500 wmt completed in July.
- In addition to the July shipments, contracted shipments for ~60kt in Q3 are well advanced.
- The first phase of pre-stripping activities at the 2NW pit commenced in July."
Project Development - Early Construction
Sal de Vida, Argentina
- "Stage 1 production wellfield drilling continues, with five out of eight wells successfully completed and installed.
- Delivery of pond liners is underway and tender submissions for pond earthworks and liner installation are under assessment.
- Piloting onsite successfully produced battery grade lithium carbonate with far lower impurities than previous results.
- Detailed engineering for the process plant and non-process infrastructure is underway with early assessment of long lead items.
- Expansion of the Sal de Vida camp and primary school in a nearby village was completed.
- Cost and schedule continue on track and in line with previous guidance."
Financial & Corporate
- "As at 30 June 2021, Galaxy was debt free with cash and financial assets of US$208 million.
- A US$40 million undrawn debt facility remains in place, with a maturity date of 31 December 2021."
Upcoming catalysts include:
- 2021 - Proposed merger with Orocobre.
- 2021 - Construction progressing at SDV.
Investors can read my recent article "Galaxy Resources Plan To Be A 100,000tpa Lithium Producer By 2025", and my CEO interview here, and the latest company presentation here.
Pilbara Minerals [ASX:PLS] (OTC:PILBF)
On June 25, Pilbara Minerals announced: "Pilbara Minerals' Board approves staged restart at Ngungaju Plant." Highlights include:
- "Ngungaju Operation (formally Altura Lithium Operation) set for a staged restart during the December Quarter 2021, targeting annual full production capacity of 180,000 to 200,000 dry metric tonnes (dmt) by the middle of calendar year 2022.
- Once fully ramped up, the aggregate production capacity of the combined Pilgangoora Project is targeting 560,000 to 580,000 dmt pa.
- Engineering studies and re-start planning largely confirm prior capital investment estimates at the time of acquisition, with approximately $39M to be invested in plant modifications and operational readiness over approximately the next 12 months.
- Restart costs to be funded from existing cash. Further funding support likely available through a restructure of the existing debt facility, should favourable terms and conditions be available.
- Spodumene concentrate tonnes shipped for the June 2021 Quarter expected to be ~96,000 dmt, exceeding guidance of 75-90,000 dmt.
- Finalisation of POSCO Downstream Joint Venture [DSJV] documentation (including due diligence) targeted for July 2021, with Pilbara Minerals final investment decision to follow shortly thereafter.
- BMX Digital Sales Platform development now complete and ready for implementation, with the first cargo auction scheduled to take place during July 2021."
Upcoming catalysts:
- 2022 - Possible Stage 2 Pilgangoora Project commissioning timing to depend on market demand.
- 2022/23 - POSCO Downstream Joint Venture.
- ?2022/23--> Possible plans for a JV with Calix to produce a concentrated lithium salt "midstream product" that can later converted into lithium battery materials, or may potentially be used as direct feedstock for Lithium Iron Phosphate (LFP) cathode manufacture.
Investors can read my article "An Update On Pilbara Minerals", and an interview here.
AMG Advanced Metallurgical Group NV [NA:AMG] [GR:ADG] (OTCPK:AMVMF)
No significant news for the month.
You can view the latest company presentation here.
Upcoming catalysts:
2021 - Progress on lithium projects in Zeitz, Germany and in Zanesville, Ohio, both in the planning stage.
2021--> - Stage 2 production at Mibra Lithium-Tantalum mine (additional 40ktpa) planned.
2023--> Lithium hydroxide facility in Bitterfeld-Wolfen Germany with production set to begin in 2023.
Lithium Americas [TSX:LAC] (LAC)
On July 12, Lithium Americas announced:
Lithium Americas Announces Investment in Arena Minerals Inc.. Lithium Americas Corp. announced that it has entered into an agreement to acquire 42,857,143 subscription receipts of Arena Minerals Inc. [TSX-V: AN] ("Arena Minerals") in a private placement at C$0.14 per subscription receipt for total consideration of C$6.0 million (US$4.8 million).
On July 21, Seeking Alpha reported: "Judge in Thacker Pass lithium mine case plans to make ruling on temporary injunction next week."
Upcoming catalysts:
- 2021 - Cauchari-Olaroz plant construction.
- 2021 - Thacker Pass DFS.
- Early 2022 - Thacker Pass construction planned to commence.
- Mid 2022 - Cauchari-Olaroz lithium production to commence and ramp to 40ktpa. From 2025 a Stage 2 20ktpa+ expansion planned.
- 2023 - Possible lithium clay producer from Thacker Pass Nevada (full ramp by 2026).
NB: LAC owns 49% of the Cauchari-Olaroz project and partners with Ganfeng Lithium (51%).
Investors can read my article "An Update On Lithium Americas."
Lithium miner ETFs
The LIT fund was significantly higher in July. The current PE is 36.05. My updated model forecast is for lithium demand to increase 4.1 fold between end 2019 and end 2025 to ~1.2m tpa, and 10.0x this decade to reach ~3.5m tpa by 2030.
Note: A Nov. 2020 UBS forecast is for "lithium demand to lift 11-fold from ~400kt in 2021 through to 2030."
LIT Fund 10 year price history
Source: Seeking Alpha
- The Amplify Lithium & Battery Technology ETF (BATT) is currently on a PE of 33.9. It is a broad based fund also worth considering. On their website they state: "BATT is a portfolio of companies generating significant revenue from the development, production and use of lithium battery technology, including: 1) battery storage solutions, 2) battery metals & materials, and 3) electric vehicles. BATT seeks investment results that correspond generally to the EQM Lithium & Battery Technology Index (BATTIDX).
- Horizons Global Lithium Producers Index ETF is a new pure play lithium producers ETF. You can view the top ten holdings here.
Conclusion
July saw lithium prices higher the past month.
Highlights for the month were:
- China giant Ganfeng says lithium may rally to boom-time high.
- CATL will now supply lithium-ion batteries To Tesla until December 2025.
- CATL sees battery sales surge 272% in first 5 months of 2021.
- SK Innovation pumps $26bn into EV batteries to quintuple output, aims to be in top 3 of the field by 2022.
- Shortages flagged for EV materials lithium and cobalt.
- BoA says EV batteries will reach a 'sold out' scenario in the next 5 years.
- A $35 billion plan for Korean EV battery giants to catch China. S.Korea's LG Chem, LGES pledge $13 bln in battery investment by 2030. LG Chem to invest $5B to produce EV battery materials. LG Chem's cathode production capacity will rise to 260,000 tons in 2026 from around 40,000 tons last year.
- POSCO Chemical to build a new cathode materials plant for EV batteries.
- Tesla patent reveals Elon Musk's 'table salt' lithium extraction process that could slash costs.
- UK, European manufacturers want battery supply chain nearer home.
- Global EV battery industry will be 'sold out' by 2025: BofA.
- Lithium price tipped to rise after warning of 'Perpetual Deficit'.
- Nissan & Envision AESC to spearhead UK lithium ion economy with 25 GWh battery gigafactory.
- Albemarle launches new lab to build better batteries for electric vehicles.
- SQM/Wesfarmers Covalent Lithium (SQM/WES JV) Kwinana LiOH plant receives approval from the WA government. Covalent Lithium begins Mt Holland construction.
- International Lithium announces M&I Resource of 6.85 million tonnes LCE at Mariana Lithium Brine Project. Ganfeng reports EIR approval.
- Tianqi Lithium: Closes $1.4 billion asset sale to Australia's IGO.
- Galaxy Resources Mt Cattlin record quarterly production achieved of 63,321 dmt of lithium concentrate.
Pilbara Minerals' Board approves staged restart at Ngungaju Plant (formally Altura Lithium Operation).
- Lithium Americas - Judge in Thacker Pass lithium mine case plans to make ruling on temporary injunction next week.
As usual, all comments are welcome.
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Analyst’s Disclosure: I/we have a beneficial long position in the shares of GLOBAL X LITHIUM ETF (LIT), AMPLIFY LITHIUM & BATTERY TECHNOLOGY ETF (BATT), ALB, JIANGXI GANFENG LITHIUM [SHE: 2460], SQM (NYSE:SQM), ASX:ORE, ASX:GXY, ASX:PLS, AMS:AMG, TSX:LAC, TSXV:NLC, ASX:CXO, ASX:NMT, SIGMA LITHIUM [TSXV:SGMA], SAVANNAH RESOURCES [XETRA:SAV], VULCAN RESOURCES [ASX:VUL], LITHIUM POWER INTERNATIONAL [ASX:LPI], GLOBAL LITHIUM RESOURCES [ASX:GL1], LITHIUM ENERGY LIMILTED [ASX:LEL] either through stock ownership, options, or other derivatives. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.
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