Canada Lithium Corp. (TSX: T.CLQ, Stock Forum) says it has been included in the world’s first Lithium ETF (exchange-traded fund), but company chief executive officer Peter Secker said he isn’t surprised.
Canada Lithium is a junior mining company that aims to cash in on expectations that the switch to lithium battery-powered electric cars will increase demand for the commodity.
On Monday, the company said it has been included in an ETF that was launched in July 23 by New York-based Global X Funds.
The Global X Lithium ETF (NYSE: LIT, Stock Forum) aims to track the Solactive Global Lithium Index, which is designed to reflect the performance of the largest and most liquid lithium battery producing and mining and refining companies in the world.
As of July 13, 2010, the three largest components of the EFT are lithium produces Chemical and Mining Co. of Chile Inc. (SQM) (NYSE:SQM, Stock Forum) of Chile, FMC Corp. (NYSE:FMC, Stock Forum) and Rockwood Holdings Inc. (NYSE:ROC, Stock Forum) from the U.S.
“Our strategy is to build a lithium mining and processing operation near Val d’Or in the regional heart of Quebec’s mining industry and become the third or fourth largest battery-grade lithium carbonate producer in the world,’’ Secker said.
“We could be capable of supplying the growing demand for lithium carbonate at a rate of roughly 43 million pounds per annum by late 2012.’’
An ETF is an investment vehicle that looks a lot like a mutual fund, but has some key differences. ETFs were created to represent a basket of securities that track a stock, bond, real estate or commodity index.
An ETF trades like a stock, which can be bought and sold intraday, unlike a mutual fund where purchases and sales are based on the closing price on the day of the transaction.
Global X Funds chief executive Bruno del Ama described the Lithium ETF as an efficient way to invest in what the fund refers to as a “green” commodity because of its direct correlation to the renewable energy market. On Monday, Canada Lithium shares rose 3% to 60 cents.