Canaccord mining analyst disagrees with Goldman Sachs — Goldman...

Canaccord mining analyst disagrees with Goldman Sachs —

Goldman Sachs research report claims investor enthusiasm has led to lithium oversupply

Canaccord mining analyst Reg Spencer disagrees, “lithium projects are always behind schedule…always”

Lithium prices across the board have gone parabolic since the bull market kicked off in January 2021, but a bearish Goldman Sach research report — plus news that a China co is buying 6 lithium mines in Africa to feed automaker BYD — has brought it all to a halt… for now.This is evident by the tumble roll in ASX lithium stocks we witnessed this morning – big boy Pilbara Minerals (ASXLS) dipped ~15%, Allkem (ASX:AKE) dropped ~13.6%, Galan (ASX:GLN) ~14.6% and Liontown (ASX:LTR) fell around 19%.

The Goldman Sachs report, released earlier this week, claimed although the long-term prospects for the battery metals remains strong due to the rapid uptake of electric vehicles (EVs), investor enthusiasm has led to an oversupply.

THIS IS NOT THE CASE, according to Cannacord mining analyst Reg Spencer.

“That oversupply in the market that Goldman Sachs is referring to is in lithium production from China lepidolite sources which is lower grade, difficult to process and more expensive to process in comparison to spodumene,” he said

.“I’ve been covering this sector for seven years and I can tell you supply always disappoints, especially from unconventional sources such as lepidolite that Goldman Sachs is referring to in their research report

.“Lithium projects are always behind schedule, always, and to say that the world’s supply issues are going to be resolved in three years from unconventional resources, which means higher costs to produce and extract…I think is wrong.”