March 29, 2024 10:17 AM

Lithium speculation to reality

Lithium combines with a variety of other minerals to create batteries. It has become a central core component of clean technologies for the future.

/ Published 5 years ago

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Bewitched and bewildered the financial analysts have not reached a consensus on why lithium has such high demand but low prices. One of the problems viewing the information on the markets has been they put all the types of lithium into one lump category instead of specifying what it associates with and how that plays out in the markets. The real story of all that remains much more fascinating and complicated than the view from China eyes.

The facts

Lithium has a core role in clean technologies emerging. As countries such as China further develop electric vehicles, the need for lithium-ion batteries goes up. China lists as the largest lithium consumer as in 50 percent of the global market. In a material control analysis done in 2017 by Worcester Polytechnic Institute along with two Chinese universities, China had an 86.7 kiloton consumption of lithium carbonate. China fuels itself with lithium carbonate by importing it. Nearly 70 percent of that comes from Australia as of 2016.

In the last three years, China has danced with Canada and Latin America. China took a few trips to the Nevada lithium mines as well and played with Elon Musk. It aggressively has bought shares in any exploration mines needing financing up to 50 percent even in Canada to ensure it receives the imports needed.

It remains not just about batteries with China. Lithium of the right type fuels thermonuclear weapons of the stage two kind in a fusion process. So, politics plays a role in developing mines as in just how the lithium will be processed and accounted for. Who owns the mine and where the lithium becomes shipped matters depending on the end process.

Wait on the horizon in the Far Far North, the Royal Canadian Mounties and miners reported rock formations and Canadian geologists rushed to those sites. It found oodles of lithium along with an array of other minerals. The Quebec portion of the Canadian government, in this case, wished to support its people and did so by investing in Nemaska Lithium at Whabouchi mine. Nemaska’s novel patented electrochemical process generates high-quality lithium while at the same time being wildly economical under the ever-watchful eye of the Royal Canadian Mounties. In the towns and byways of the Far North the legends of how to conquer snow and ice live on successfully.

Under the ever watchful eyes of the Canadian Royal Mounties the mining and trading of lithium continues on. (Photo by Keith JJ via Pixabay. CC0 1.0 Universal)

Lithium itself

Most lithium has been found in South America, China and Australia. The largest producer of lithium remains the USA in Nevada and North Carolina. Two types of lithium exist labeled lithium 6 and lithium 7. Radioactive lithium becomes a worry on who has it plus why and processes can create it. Once harvested, lithium has to go under a chemical process. In this chemical process, it combines and transforms into useful substances. It begins by making lithium into a chloride. Lithium chloride receives an electric current which separates chloride from lithium. From there, other materials are added to it to make it useful. Lithium applications include:

  • Lithium carbonate – used in glass (Pyrex), ceramics, aluminum, medicine and batteries
  • Lithium stearate/hydroxide – added to oil to make lubricating greases of the industrial level, cosmetics and plastics
  • Lithium alloys – used with magnesium and aluminum has aerospace applications and makes armor plates

Battery markets

The Li-ion battery market has extended the usefulness of lithium extensively. As countries retool for sustainable development, its play in the clean technologies has much appeal. Its durability and reliability in batteries well-known. At least six li-ion batteries exist. So when investing in a mining stock check which lithium type and where it goes for final processing. The mineral combining has possibilities of becoming profitable as well. Lithium carbonate remains an extremely competitive market, with China fiercely defending what she believes to be solely hers. Legal pirating may involve looking for those niches China has ignored while in pursuit of the carbonate variety. The following table lists possible niches:                                                                                                              

Lithium Cobalt Oxidemobile phones, laptops and digital cameras
Lithium Titanate solar powered street lighting, electric powertrain for Mitsubishi, Honda Fit HV and i-MEV
Lithium Manganese Oxide power tools, electric powertrains, medical devices
Lithium Nickel Manganese Cobalt Oxide industrial, e-bikes, medical devices, electric vehicle
Lithium Iron Phosphate in development for a vehicle charging system
Lithium Nickel Cobalt Aluminum OxideTesla powertrain, medical devices, industrial

Canadian government, with its developed forward-looking policies, recently invested in Nano One to the sweet tune of $1.9 million. It produces high-performance, cost-effective energy storage materials for nanostructured composite materials. Fostering automotive supplier innovation may accelerate green technology. Its pilot program will show the scalability and cost. The Canadian government assessment sees growth in the market tied to the automotive industries electric cars. Roskill midyear market report confirmed their evaluation and the 2017 Lithium Carbonate Equivalent 34,000t figure forecast to double in a decade.

Conclusion

Investing in lithium markets takes patience and research. High risk, expensive and needing new technology to become profitable, investors need access to expert science knowledge to cut through some hype. Helpful would be an understanding of the economics of how China truly effects the market in this specific area, as well as just where is electric vehicle technology at. Here is a hint, recently USA Ford Motor and Walmart announced self-driving vehicles will deliver groceries to homes. Looking at application level of the metal may prove the most profitable of all. So like a Royal Canadian Mountie trekking through the North-West Territories, take a slow walk through the world of Li-ion batteries and its application. Find those competent hardworking forward-looking entrepreneurs and give them a boost.

(Featured image by Dnn87 via Wikimedia Commons. CC BY 3.0)

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