Lithium Miners poised to do well The world simply can’t get enough lithium to feed its electric vehicle demand, and China in particular is leading the pack. The government is strongly behind the electric vehicle push, and Chinese companies are scrambling to secure stable lithium supplies – a move that has already benefited junior lithium miners. One company that is also very well-positioned to benefit from this is Standard Lithium (OTC:STLHF) (TSX.V:SLL).
Lithium has been one of the hottest commodities for the past two years, driven by the increasing demand from the electric vehicle revolution. China, which is already the world’s largest manufacturer and consumer of electric vehicles, is moving to secure sufficient lithium supplies for its envisioned all-electric future. The government just extended its tax rebate on electric vehicles until 2020, lending further support to electric vehicle demand.
As electric vehicles continue to gain market share, China is right at the top driving a substantial portion of that demand. According to a new report by Bank of America Merrill-Lynch, electric vehicles are forecast to reach a global market share of 34% in 2030 and 90% in 2050. The analysts note that they expect China to maintain its estimated 50% market share of global electric vehicles up to 2030.
Lithium Supply Remains a Limiting Factor – The Race for Lithium Is Getting Desperate
CNBC calls the race for lithium supplies a ‘desperate global race’, and China is winning. Benchmark Mineral Intelligence notes that there are 26 battery ‘megafactories’ that will be in production by 2021- and 49% of this total planned capacity will be coming from China.
China is pulling out all the stops in its search for lithium. It is already going ‘dumpster diving’; Reutersreports that Chinese recycling companies are viewing the increasing number of lithium batteries as a huge opportunity. One Chinese think tank estimates that by 2023, this could be a $4.68 billion market.
Even American politicians are starting to take notice. President Trump just signed an executive order to boost U.S. production of critical minerals. According to a report released by the Department of the Interior, the U.S. relied heavily on importing twenty-three minerals of which lithium was one of the named minerals. The move could “open up new avenues of growth,” said Andrew Cosgrove, senior energy and mining analyst at Bloomberg Intelligence. Companies may be less inclined to “seek out properties in foreign countries.”