Lithium

ETSOD said:
Lithium production and investment in the companies that mine said mineral has not had a bad rap lately - it has had no rap at all. From having been the mineral sectors posterchild some three years ago little interest has been shown lately except by a few die-hard fans.Whereas “Tesla” and “Giga factories” and the budding EV revolution are causing headlines around the world the actual mineral that everything relies upon has until very recently been sorely neglected by the media and, continually, the big institutional investors. One of the reasons for this is the relative long process from the discovery of a viable lithium body to the finished product, a process that takes 7-8 years or more. This is too long for a Market with the attention span of a web surfing teenager.

So when everybody jumped in 3-4 years ago the general consensus was that “off we go!” and easy money was to be made. And easy money WAS made, specifically from promising junior miners, but from the hype mostly, and the following price spike. People were not prepared to sit it out and wait for production however so they gradually lost interest. Then the Shorters moved in…

Overproduction.

Another reason for the fall-back was that about 18 months ago a ill-informed and baseless rumor of over production stared to flourish and peoples belief in lithium eroded further. This rumor has now been seen for what it is among the people in the industry but possibly not among mainstream investors who still try to get their heads around a product that doesn’t even have a proper spot price yet. Among us who live and breathe lithium it is easy to become home blind but the sector is small compare to - say - iron ore. But a flea on a dogs back really. It will not be for long though. Well backed figures of a 10 -20 times demand increase by 2030 are starting to emerge.

The word from The Guru.

I attended a seminar with Melbourne based financial adviser Mr Marcus Padley and one of the nuggets I took with me was that the way to create a substantial increase in your portfolios value is to have AND act on information nobody else have. To buck the trend. To go where there is not a highway but only a path so far. That alone is something like finding a goldmine to the left when everybody else is looking to the right. To be one step ahead of the Market heard. Not quoting Warren buffet at parties and try to be like him, not to look at past performances as a guide, not be engrossed in hype but to have that ONE little nugget of information that will change your financial situation for ever.

Hard rocks crunchtime.

The lithium saga has lashed violently to the left and right on its way into mainstream Market awareness. Whereas the interest has come and gone during this dillydallying the demand for lithium has steadfast just been going up and up. When the investment world finally open their eyes and realize what is happening and that they are about to be left behind big sums will change hands. The imminent changes to the world of propulsion and transport, along with survival demands from Mother Earth Herself, will make the lithium industry blossom. There are not enough producers at the moment and - because of the mentioned long setup time - not for the foreseeable future. The initial reasoning behind starting hard rock lithium mines in WA was that the production cost is lower than for the brine based production method favored by countries in South America but THAT argument has rapidly changed to: that we have to throw everything we got at it, brine and hard rock, the works! We need it ALL to meet upcoming demands. This will keep companies like SQM, Albemarle and Tianqi in the black but their sudden interest in buying into WA hard rock lithium companies with their better cost structure paints an obvious picture.

Enjoy the ride