Two Canadian lithium producers are top prospects as mining and automotive giants hunt for deals to supply the silvery-white metal for electric vehicle (EV) batteries, according to a CIBC Capital Markets analyst.
Earlier this month, Mohamed Sidib initiated coverage on TSX Venture-listed Rock Tech Lithium (RCK.V) and Frontier Lithium (FL.V) issuing “outperformer” ratings. Sidib also published a lengthy primer on the alkali metal, calling for rising prices due to tight supply as more consumers buy EVs.
Sidib sees North American lithium producers playing a bigger role in a global supply picture dominated by China and Australia. Backed by billions in promised government investments in critical minerals, he predicts combined Canadian and American output will grow from a two per cent share in 2022, to seven per cent in 2027.
“While Canada does not currently produce much lithium in the grand scheme of things, the country is host to seven projects, with a hub being created in Ontario and Quebec,” Sidib wrote in his report. “The country is in a prime position to take market share at each level of the local supply chain.”
He also notes Canada’s abundance of clean electricity (83 per cent non-emitting grid, versus 37 per cent in the U.S.) as appealing to firms looking to shrink their environmental footprint.
Frontier and Rock Tech are among a handful of junior mining players focused on new sources of lithium in Northwestern Ontario. Sidib says Frontier owns “one of the highest-grade undeveloped deposits in North America,” putting the company “at the frontier of North America’s EV supply chain.”
CIBC sees North American lithium producers playing a bigger role in a global supply picture overwhelmingly dominated by China and Australia.
Two Canadian lithium producers are top prospects as mining and automotive giants hunt for deals to supply the silvery-white metal for electric vehicle (EV) batteries, according to a CIBC Capital Markets analyst.
Earlier this month, Mohamed Sidib initiated coverage on TSX Venture-listed Rock Tech Lithium (RCK.V) and Frontier Lithium (FL.V) issuing “outperformer” ratings. Sidib also published a lengthy primer on the alkali metal, calling for rising prices due to tight supply as more consumers buy EVs.
Sidib sees North American lithium producers playing a bigger role in a global supply picture dominated by China and Australia. Backed by billions in promised government investments in critical minerals, he predicts combined Canadian and American output will grow from a two per cent share in 2022, to seven per cent in 2027.
“While Canada does not currently produce much lithium in the grand scheme of things, the country is host to seven projects, with a hub being created in Ontario and Quebec,” Sidib wrote in his report. “The country is in a prime position to take market share at each level of the local supply chain.”
He also notes Canada’s abundance of clean electricity (83 per cent non-emitting grid, versus 37 per cent in the U.S.) as appealing to firms looking to shrink their environmental footprint.
Frontier and Rock Tech are among a handful of junior mining players focused on new sources of lithium in Northwestern Ontario. Sidib says Frontier owns “one of the highest-grade undeveloped deposits in North America,” putting the company “at the frontier of North America’s EV supply chain.”
Rock Tech Lithium Inc. (RCK.V)
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“We believe that Frontier’s high-grade, low-impurity deposit, and low-cost, render the company an attractive M&A candidate in a market where major players are showing interest in the industry,” Sidib wrote, noting Rio Tinto Group’s (RIO) interest in Canadian lithium assets. However, the mining giant's CEO Jakob Stausholm recently told Bloomberg that companies are “very expensive,” and the miner would rather “develop the projects ourselves.”
source : Jeff Lagerquist