Latest Lithium Related Articles, page-799

Hi again.

Since the discussion has turned to the global impact of Trump policy
I thought it might be interesting to take a quick look at the economic drivers of lithium consumption
from the perspective of the dominant business interests of the top 10 companies in the world.
How supportive are the biggest companies in the world behind the push towards renewables, lithium, EVs, solar etc?

The top 10 biggest companies in the world are all US companies.
Here is the latest list - followed by their market cap in USD.
1. Apple Inc $753,718m
2. Alphabet $573,570m
3. Microsoft $508,935m
4. Amazon.com $423,031m
5. Berkshire Hathaway $410,880m
6. Exxon Mobil $339,897m
7. Johnson & Johnson $337,947m
8. Facebook $334,552m
9. JPMorgan Chase $313,761m
10. Wells Fargo $278,516m

https://en.wikipedia.org/wiki/List_of_public_corporations_by_market_capitalization

Things have changed.

The entrenched interests of the oil industry are now only represented by a single company.
15 years ago there were 3 oil companies in the top 5.
http://www.visualcapitalist.com/chart-largest-companies-market-cap-15-years/

Of the current Top 10 - 5 are tech companies reliant on an ecosystem of  lithium-powered devices to increase their market share.
1 is the man behind BYD (and patron saint of HC)
3 are banks.
1 is a …erm… bathroom products and nappies and all that stuff.
Only 1 - Exxon - has business interests that run counter to the rise of lithium.

Apple.
Stay tuned for another barrage at next week’s WWDC conference of bigger batteries in laptops, iPads, iPhones and the impending release of Apple’s own self-driving car (probably next year for that one). They have massive green investments in Chinese wind. Aiming at being energy independent for their own factories and new head quarters.

Alphabet. otherwise known as Google.
Producers of an array of hardware that utilises lithium, but also reliant on the computer and mobile computing. Also invested in drones, wearable tech, robotics etc.

Microsoft.
Same as Apple although less likely to see a car, as the early tests all resulted in Blue Screen of Death for occupants…

Amazon.
Another tech company that is also involved in drone delivery and hardware, robotics etc.

Berkshire Hathaway.
St Buffett’s home company. Read through his list of investments for another subset. First that comes to mind is BYD, China’s largest EV company and largest producer of large form public transport - specifically buses. Democrat, too rich and too old to care about Trump - and happy to put his money behind infrastructure and progress.

Facebook.
Less known for hardware but reliant on computing, mobile etc. As a platform for social change and political pressure - still to be determined but some have said that they will eventually wield fairly significant power. In the mean time - all those obsessive online stalkers and status updates need more and more lithium....

JP Morgan
Major US bank - bullish on lithium and predicting a doubling or tripling in demand by end of this decade.
Famous at Galaxy as the home of our largest nominee account based substantial holders.

Wells Fargo
I didn’t have time to research their corporate position on lithium but until recently Buffet was a major holder. As a large bank they no doubt have money behind many US stocks. Whether or not they’ve “editorialised” on the subject is for someone else to look into. My guess is whatever makes money.

And lithium is making a lot of money now.

Trump is a business man.
These 10 companies are major employers and drivers of the US economy and nearly all of them stand to gain much more from an increasingly teched-up and lithium-powered future.
He was bullish on coal during the election but even some representatives of his administration have already been walking that back.
Even the 3 top US coal producers have gone on record to say that they wouldn’t oppose sticking with the Paris accord ( particularly if Trump can negotiate a little sweetener for them somehow).
http://www.politico.com/story/2017/03/trump-paris-climate-pact-coal-companies-236730

My view is that Trump’s “ungreen" beliefs has already been priced in b the market as an opponent of clean energy.
Whether he modifies that view to accept that the economy is changing, that US coal companies are dying a natural death from competition - that is probably up to him to make up some words that resemble a policy.
In reality - it will be a word salad that appeals to his base, while allowing the corporate sector to keep driving the real changes.

The real course of lithium’s path is no longer a Federal issue.
California is the consumer of nearly 50% of the US EVs. They have their own aggressive roadmap towards 100% renewable energy and EVs are a big part of that. Same with several other states.
Lithium isn’t really the recipient of much in the way of subsidies so its an argument of economics. Solar is already a huge employer in the states and winning against coal, despite the subsidies that it receives. Remove them and it would be game over for any new coal-fired plants.

Trump gained all the coal votes in the election - but the industry had already changed. The jobs won’t be coming back, even if he increases support. The industry has become more automated in an effort to reduce costs. He would simply be wasting money. Solar is employment heavy with installations, and the country is nowhere near as solar penetrated as we are already here in Oz. Massive business growth happening there. Federal policy changes could help, but the status quo won’t mean any fewer people getting onboard with their own power supplies attached to their roofs.

And what has any of this to do with Galaxy?
Not much, really.

Even James Bay is in Canada. Very close to Michigan’s auto industry but also capable of supplying Europe, who , through the Angel Merkel, are already determined to stay the course and keep their economy moving rapidly to renewable energy and EVs.

Japan is the only major economy still considering coal plants - but this is modelled on a static price environment.
The truth is that solar is getting cheaper each year. They already have already experimented with some floating solar grids (because land is so expensive).
The cost case for coal plants is just not there and the environmental impact has been modelled, resulting in 10s of thousands of unnecessary deaths from the resulting pollution. There is no such thing as Clean Coal.
China has cancelled 85 coal plants. imho Japan will never go through with these coal plants. There is no economic sense and it ruins any chance they have of achieving their own climate goals. Its just they are rightfully concerned about nuclear industry.

So what is holding Galaxy back?
These forums make people paranoid. We imagine that there are meetings of the Big Players behind closed doors.
In reality, the Anti Lithium Head Office was long since abandoned.
There may still be vigorous lobbying in the states from the likes of the Koch Brothers/Heads - but this has nothing to do with our particular share price.
There are just a bunch of little bots in there now - beavering away with their algorithms.

Most intelligent and rich humans have already accepted that things are changing and are now going to try to milk it for all its worth.
That includes competing for the best price positions in whatever ways they can - but its now impossible to argue that lithium isn’t happening.

Galaxy is not immune to sector down-ramping sapping a bit of enthusiasm, but there is an enormous stability given to a company that has already solved the problems of getting into production and making money.
For some reason lithium investment still makes people nervous.
Its like a door that you think is locked.  Then you just turn the handle and its been unlocked the whole time.

Anyway - as far as concerns over future demand and government support - let the speculative sector work out how they will eventually fit in and why they deserve massive market caps before they’ve even managed to send a shipment.

For Galaxy - its just one foot in front of the other.
So far so good. We can just hope that they eventually break into jog or even a sprint.
But the main thing is Don’t Make Any Mistakes.
Galaxy doesn’t really mess around with Thought Bubbles. That is a good thing.
Just keep shipping and working on the next 2 assets and the value will come.
James Bay has a possible fast track path with some association with Nemaska.
A Sal De Vida announcement will finally arrive that lets us in on the product of all these months of negotiations.
Then we can get on with climbing our way to the multiples of current market cap that the company actually deserves.

I am happy to keep buying as much, and as often as I can, way down here in the old low 40s.
So far its been a disappointing year for the “sustained rerate” that Anthony Tse keeps promoting at these conferences.
But if the markets keeps making it easy for me then I’ll keep taking them.

Good luck to all holders.
and , as @Upstart777 said, cheers to all the posters that make this place a good source of info and debate.


btw: hope your little girl is doing great Upstart.