DD Tells me DJI has the goods to be a future producer in Argentina & Teels Marsh Nevada.
keep on the radar. DJI has lithium results pending from Argentina's recent drill program.
Next will be Teels Marsh. Drilling producer size wells.
Lithium
Lithium (chemical symbol: Li) is the lightest of all metals. It does not occur as a pure element in nature, but is contained within stable minerals in a range of hard rock types or in solution in brine bodies within salt lakes, in sea water or geothermal brines. The contained concentration of lithium is generally low and there are only a limited number of known resources where lithium can be economically extracted.
Lithium can be processed to form a variety of different chemicals depending on its end use. According to Roskill Information Services, lithium carbonate represents approximately 48% of the total global consumption of lithium chemicals (25% technical-grade lithium carbonate and 23% battery-grade lithium carbonate).
The next most common chemical is lithium hydroxide which represents 16% of total global consumption. Other forms of lithium consumed include lithium bromide, lithium chloride and lithium minerals.
Lithium and its chemical compounds exhibit a broad range of beneficial properties, including:
- the highest electrochemical potential of all metals,
- an extremely high co-efficient of thermal expansion,
- fluxing and catalytic characteristics, and
- acting as a viscosity modifier in melts.
As a result of these properties, lithium is used in numerous applications including ceramics and glass, batteries, greases, aluminum, air treatment and others.
Future demand is projected by Roskill to grow at an annual base rate of 9.7% until 2017 with optimistic forecast at 15.7% annual consumption growth. Consumption of lithium in volume terms with be largely driven by the rechargeable battery market which is predicted to grow 21.5% annually.
Lithium-ion batteries have become the most important storage technology in the areas of portable and mobile applications (e.g. laptops, cell phones, smartphones, tablets, power tools, medical devices electric bicycles, electric cars) since around 2000. Lithium's high electrochemical potential - it has the highest electric output per unit weight of any battery material - makes it the standard material for lithium-ion (high energy-density rechargeable) batteries.
While portable consumer goods alone continue to provide impressive growth in demand for lithium batteries, the start of mass production of hybrid, plug-in hybrid and electric vehicles presents the most significant upside "step growth" potential for lithium demand, and especially for lithium hydroxide, for its superior performance compared to lithium carbonate. This is especially important for EV manufacturers like Tesla (TSLA) and Toyota (TM) who only use this type of lithium product, as they want maximum performance combined with the lowest possible battery weight. Lithium hydroxide appears to have large upside potential, independent market researchers like Roskill forecast a much faster growing lithium hydroxide market.
This is confirmed by lithium batteries demand forecasts by market researcher Signumbox, whereas LiOH (lithium hydroxide) demand is projected to rise faster than Li2CO3 (lithium carbonate) demand:
There is no exchange traded market for lithium chemicals, as prices are set by negotiation between producers and customers often based on customer-specific formulations. Prices for lithium concentrates used for conversion into chemicals are correlated to, and tend to follow the same trend as, lithium carbonate prices. Lithium hydroxide (LiOH) is considerably more expensive than lithium carbonate (Li2CO3).
Although prices vary by product and contract, SignumBox estimates the average Lithium hydroxide prices as follows:
Much of the new lithium production coming online is still focused on carbonate (brine production). Shortages are already arising. This could result in much higher future prices according to Signumbox:
The next chart (taken from an Orocobre presentation) is a bit outdated (from 2014) but nevertheless a good illustration of costs for the two main types of lithium mining, brine and mineral:
Costs of production per tonne vs amounts, green is brine, orange is mineral.
World production is dominated by 3 companies, Albemarle (which took over Rockwood), FMC and SQM. Neither of them is a pure play or is dependent on lithium revenues btw.
Note that the cheapest mineral miner, RB Energy (former Canada Lithium), has gone bankrupt in 2014. As Orocobre is barely out of teething problems when ramping up its new mine, and the EV hype isn't fading away as more and more hybrid cars are being produced, making life hard for Tesla, and as a result lithium prices are steadily rising (as one of very few commodities for the last few years), it will be clear that lithium is in demand, so lithium juniors gain a lot of attention at the moment (December 2015)