I am a materials chemist and a small time retail investor. I started investing in GXY (which became ORE and then AKE) more than a decade ago because of the fundamentals. Climate change is real and urgent action is required. Battery storage was going to be important in transportation and stationery applications and Li-ion was king and it still is (for now at least) if emissions are going to be brought down to zero which is where they need to be. So convinced was I in the technology that I directed my own research activity toward advancing the technology. Nothing has changed my mind about my initial investment decision.
There are, of course, threats out there on the horizon from many potential new battery technologies but Li-ion remains king for now. The fundamental 'rocking chair' or 'shuttle-cock' Li-ion battery technology where the Li ion shuttles from one material to another up and down in energy has evolved as electrode material composition and microstructure have varied but so far it is still Li doing the moving from one electrode to another. If you switch Li for Na then you take a hit in charge rate and capacity.
The problem is that there is not an infinite supply of Li or the electrode materials to effect the necessary energy transition. We are going to be resource constrained. Even if lithium were abundant, we all know in this forum that it takes time to develop a lithium mine. Probably of the order of 10 years. And time is not on our side. So whilst the geniuses at Morgan-Stanley managed to cause a stampede with talk of over-supply (2017-2020) this was only ever going to be temporary. The shorters may have made money trading the stock but fundamentals are fundamentals and eventually they will catch up with you.
Today we are looking at extreme shortages of lithium and skyrocketing prices. This was something I confidently predicted when I first started investing.
Although storm clouds are gathering on the horizon with an unstable financial system that could collapse any time, the initial investment rationale has not changed. Hopefully a financial crisis (if it comes) will not de-rail matters with so much money sloshing around in the system.
We are living in a resource constrained world. The only lithium we know, and which is easily accessible to us, is under our feet and maybe in the sea. With automakers finally waking up to the superiority of battery electric vehicles over ICE cars the race is on to build car and battery factories and secure materials supply. Exponential growth in BEV production will require exponential growth in lithium carbonate demand and therefore exponential price increases.
Hopefully, this will be good news for all those that held the line.
