Demand for lithium - the hottest commodity on the planet and the only commodity to show positive price movement in 2015 - is poised to continue on its upward trajectory, becoming the world's new gasoline and earning the moniker of "White Petroleum". And the battle for market share in and around this commodity has everyone from major tech players to trend-setting investor gurus vying for a foothold.
Driven by the rise of battery gigafactories and game-changing Powerwall and energy storage businesses, the world now finds itself at the beginning of a lithium super cycle that is all about securing new supply, much of which is poised to come from lithium superstar Argentina.
We have Tesla in the far corner, building its battery gigafactory in Nevada, for which it needs tons of lithium at a reasonable price, and just last week Tesla announced its plans for the Model 3, which has already hit over 300,000 pre-orders. To give you an idea of just how meaningful this is, Tesla produced less than 50,000 cars last year. Elon himself mentioned during the unveiling that Tesla will be gobbling up much of the world's lithium supply with plans to produce 500,000 EVs per year. "In order to produce a half million cars per year…we would basically need to absorb the entire world's lithium-ion production." Remember – this is one man, one company. Tesla's soon-to-be-completed gigafactory will produce more lithium-ion batteries than the rest of the world combined.
And opposite Tesla, we have some other major players shifting gears that will affect the lithium space.
Chinese billionaire Jia Yueting is stepping onto Tesla's playing field with its own electric car start-up, Faraday Future, and Apple is planning one too, by 2019. Through its Alphabet holding company, Google is also getting into the game with plans for a self-driving car.
They are fighting it out not only to be the first to capture the most electric vehicle market share and the best engineers, but they are getting down to the core of this arena, which is lithium—the key element that will make it all work.
This is D-Day for lithium miners, and it's all about new entrants to a space that is about to change exponentially. Big investors are definitively standing up and taking notice—and even jumping into the game.
One of Canada's most noteworthy investors in the mining sector, Frank Giustra, is the latest to see lithium for what it is—the single-most valuable commodity of our tech-driven future, and one that is already in short supply.
The investor extraordinaire with a focus on big mining deals has thrown his support behind Lithium X which is exploring in the key "Lithium Triangle" area of Argentina and is the largest land holder in Nevada's Clayton Valley, the only producing lithium area in the entire United States. Lithium X has over 15,000 acres in Clayton Valley, near Albermarle's Silver Peak mine, the only American lithium producer right now, and about three hours from Tesla's gigafactory.
"Right now, there is a lot of 'smart money' getting in on the lithium land rush, and a mining legend like Giustra would never have been late to this party in Nevada—but the big attraction is our lithium plays in Argentina, which is ground zero for the commodity in South America," Lithium X Chairman Paul Matysek told Oilprice.com.
"At the end of the day, Frank, likes to get involved in a project if he sees a massive shift in an industry's fundamentals," Matysek added. "Lithium— is certainly showing all the right signs!"
Floored by the 'White Petroleum' Fundamentals
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