There is an interesting article on kallanish.com from 31/05 that has several lithium experts intensely disagreeing with the Goldman Sachs analyst note (as for the unbelievable article in The Australian citing a chinese article which says China now has 6 lithium producers all producing at 2.5% Li02, you should be able to work out how magical and timely that info is. You are being scammed prople, and by one of the companies responsible, by uts unethical practices, or the GFC)
This Kallanish article quotes John Startin, the senior managing director and global head of metals, materials and mining at Evercore, who says GS analysts must be looking at different numbers to those working day-to-day with developers, producers and consumers. "The demand function for these metals is almost vertical. Supply is lagging desperately. The dollars that have flowed from investors into project (vs into the secondary market for shares) is minimal" he says. "Supply for 2022-24 was determined by events 5-10 years ago, not by the actions of investors over the last 18 months," he adds, noting the long lead-time for ming projects."
Roderick Smith, chair of British Lithium. notes IEA's forecast that Lithium will see the largest supply-demand gap with demand set to increase six-fold to 500,000 t by 2030, requiring around 50 new average sized mines. "I don't see 50 new Lithium mines being built in eight years. British Lithium's mine in Cornwall is one of only 3-4 likely to get built in Europe. At a very rough average cost of $500 million each, those investors would need to rush in another $25 billion to achieve the required growth rate," he adds.
They are dead wrong says George Salamis, CEO of Integra Resources Corp. "There's no way that the developed world will ever meet lofty goals on electrification and clean tech. Few new mines, few new mine permits, little new supply of EV metals," he concludes.
And Cannacord mining analyst Reg Spencer states "the oversupply in the market that Goldman Sachs is referring to is in Lithium production from China lepidolite sources which are lower grade, difficult to process and more expensive to process in comparison to spodumene. I've been covering this sector for seven years and I can tell you supply always disappoints, especially from unconventional sources such as lepidolite. 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".
If anyone still needs reassurance that this is pure manipulation then take a look at the Bloomberg article from March 4 when the Chinese govt had two days of talks with Chinese stakeholders on halting the breakneck run-up in Lithium. For things to have turned so radically inside two months has to make anyone question the real motives behind the GS note. The Bloomberg article is titled: 'the-battery-metal-really-worrying-china-is-lithium-not-nickel'.
The price will probably continue to fall today because there are too many muppet investors who will fall for this scam. Dont panic. DYOR and hang on to your shares.
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