Tuesday, April 12, 2016
Media attention beginning to take lithium story mainstream
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.
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 lithium that is currently being mined quite simply is not enough to put a dent in the projected demand dictated by our hunger for consumer electronics and the pending energy revolution. This means that the new market is all about new players.
I see lithium is in the news more and more and I see the seeds of a bubble starting when I read language like "White Petroleum". Look the facts are that the available mine supply is not going to be sufficient for a lithium powered EV revolution. Lithium for the most part is a by-product of other mining. The three main lithium producers produce from brines. They also produce other products along with the lithium. I do not see them over producing boron and potassium just to get extra lithium. i they increase production just to get the lithium the price of the other elements goes down while lithium goes up so you end up with a wash. No one will do that.
I am playing this with companies that actually are producing. The small juniors will for the most part never produce and pound of lithium. What will get produced is a bunch of hype and a lot of new stock offerings with Lithium in the name. I am staying away from the hype and will ride this wave with established producers. In the meantime I am enjoying the ride.