Lithium, which was little known to people a couple of years back, is suddenly seeing upsurge after the introduction of electric cars. Investors are anticipating the huge influx of electric cars and looking out for different ways to cash in on the lithium-ion battery in marketplace.
A number of Bay Street institutions have been swept away by the ‘lithium mania’ on Thursday. These enterprises were buying lithium-ion batteries, at any price for their clients, which has considerably increased the sales of the companies manufacturing batteries. It was reported that by the day’s end, Western Lithium Corp. was up by 28%, Canada Lithium Corp. by 41%, and First Lithium Resources Inc. by about 67%, the sales volume was massive!
According to Jon Hykawy, an analyst at Byron Capital Markets, “I just think people are realizing there are going to be an awful lot of lithium batteries used in electric vehicles over the next while”. He said that if a couple of million electric cars were sold in the next 5 years, then that alone would be equal to about 10 – 15% of current lithium demand.
The market for lithium has grown steadily over the past decade for batteries, which are used in consumer electronics such as laptop computers and mobile phones. However, with new models of green EVs being launched such as Chevy Volt and the Leaf by Nissan, along with other electric vehicles, investors have become excited about the huge leap in the sales of lithium batteries pack.
Several popular automakers are speculating that pure-EVS could make up 10% of vehicle purchases by 2020, which could put major strain on lithium supplies.
The President of Western Lithium, Jay Chmelauskas said, “The real inflection point is that an automobile needs about 3,000 times as much lithium as a cell phone. This is where we’ve got a very large potential supply requirement.”
In China and the United States, for the production of electric cars, auto companies are receiving billions of dollars of subsidies and strong political support. This fact also adds to the excitement for lithium.
In fact, number of plants has considerably increased in China that produces lithium-ion batters for electric cars.
Information on Lithium
Lithium is a very light silver-white metal. The lithium industry is small that has annual production of about 120,000 tones of lithium carbonate. Four major companies namely FMC Corp., SQM SA of Chile, Rockwood Holdings Inc., and Talison Minerals Pty Ltd. dominate the industry.
In fact, the major source of lithium is Chile. Argentina and Australia are also key producers. Bolivia is well described as ‘the Saudi Arabia’ of lithium. However, experts clarified that the deposits in Bolivia are contaminated with magnesium and are too costly to mine.