Options trader assumes too much, and that inherently is dangerous. You assume that a new mine is going to be brought online every year to meet demand and on schedule, you assume that the battery chemistry that China is producing will be changing any times, in fact lithium carbonate is becoming the choice as the carbonate price is now caught up with hydroxide price. It's time to stop comparing copper mining, iron mining, and other mineral mining to lithium mining.
The reality is that mining for lithium, especially brine and even hardrock, is technically challenging. In order to generate a successful mine, you must have the right combination of product and quality of concentrate, or the converters risk losing their profit margins and potentially sales to battery makers, as they need to meet specific purity specifications in order to be used for batteries. This takes time, and all new mines currently have been delayed roughly ~6 months (hardrock miners) to years (brine miners, ORE, ALB at La Negra, and even some of their Atacama projects)
Furthermore, you need the right engineers to handle these technical challenges, and in the lithium industry there aren't too many players (outside of the majors and GXY, and ORE thru trial and error) who have the experience of running any massive scale products. GXY has them, and most juniors don't so they have to give up massive equity in their projects just to get their mine funded and running.
Bottom line demand: Demand especially in China continues to rise as they are shifting away from ICE, and moving market share to EVs. They honestly don't care about what ICE and foreign automakers complaints, because when you have massive pollutions problem that kills significant amount of Chinese people each day (roughly 4000 people per day, you need to reduce that pollution)
Read the Chinese 5 year plan, and look what they have mandated. Pollution control is one of the few mandates, and their strategy is electrification in order to reduce the pollution, for better or worse.
2018 pricing prediction: should see a premium for short term contracts (~1000 USD/tonne IMO)
Technology will eventually come, but it also needs to be scaled up and mass produced in order to show any real disruption to lithium ion battery, and specifically, NMC based lithium ion batteries. Even the next best thing, solid state lithium ion batteries, are still being researched upon by Toyota and other players, and ideally will be shifted to by 2025, vanadium is still a work in progress as well.
As for SP, people are now just waking up to the demand of lithium as their slowly is an increasing number of EVs onto the streets, and the reality is slowly starting to set in.
1-Bil is a start for the market cap.
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