Copied from other HotCopper forum. can't wait LRS LI projects moving on in the perfect timing, bring it on!!!!!
Great article today in the business section ofSMH all focused on lithium. Worth a read! Massive shortfall coming"
here is an edited version and my favouritetakeaways, as
Electric car battery demandputs lithium in pole position
“You aren’t going to see the iron ore price go upmultiples from here,” Hancock says.
There is, however, a commodity with thepotential for a stratospheric rise, according to Hancock and many otherindustry observers.
And it is well represented in Australia and on theASX.
“Lithium has risen very strongly in thelast few months and I’m expecting it to go higher, especially as these Gigafactories come online in the next 12 to 36 months,” Hancock says.
He is referring to the waves of investment inbattery factories - dubbed Giga factories by Elon Musk - which are now indevelopment across the world ahead of an unfolding boom in electric vehicles(EVs).
Lithium is the key ingredient in the batteries forEVs, which finally look poised to take the ascendancy over their petrol-poweredrivals. EVs are mandated to entirely replace petrol-powered cars in the UK andGerman markets within the decade, and in other major economies in the followingyears.
Interest in the lithium mining sector has soaredwith each new announcement of a major car maker’s plans to go fully electric ormajor economies announcing multibillion-dollar investments to push theelectrification and decarbonisation of their transport infrastructure.
Galaxy CEO Simon Hay says lithium faces aboom the likes of which the minerals sector has never seen before.
The lithium sector has experienced this euphoriabefore.
Australia’s lithium sector has provided investorswith a rollercoaster ride over the past decade with a China-driven boompetering out in 2019 thanks to a drop in that country’s demand incentives justas fresh supply came online in Australia - the largest source of lithium.
Prices collapsed from a 2017 peak of $US25,000 pertonne of lithium carbonate equivalent (LCE) to a low of $US5000, and so didsome lithium miners.
But this time is different says those inthe sector.
The clear message is that the hiccup of2018-2019 will not be repeated as Europe, and now the US, vie with China forsupremacy in production of the batteries that could determine who will dominatethe e-vehicle sector.
And the automakers will need to deal with largereputable suppliers with global scale, not one-project wonders, says Galaxy’schief executive Simon Hay of the merger with Orocobre to create a global player.
The challenge will be dealing with the voraciousdemand as Tesla demonstrated at its battery day in September last year.
“Tesla’s demand for lithium by 2030 exceeded theentire industry’s projections,” says Hay.
“Lithium stocks that day started to run.”
In November, the UK brought forward plansto phase out petrol cars to 2030, matching Germany’s target.
The industry got another major kick-along in late January when GM announced itspath to purely e-vehicles by 2035.
US President Biden’s $US2 trillioninfrastructure plan will include $US174 billion worth ofspending to encourage Americans to switch to e-vehicles.
The European Union’s “Green Deal” - a trillioneuro plan for the decarbonisation of its member state - also includes carrotand stick incentives for car buyers and manufacturers, respectively, toencourage a significant uptake in e-vehicles.
“What we see now is essentially the wholeworld really transitioning towards the electrification of transport, which isdriving a massive increase in production capacity for lithium ion batteries,which is in turn driving a very sharp increase upwards in lithium demand,” says Vulcan chief executive Francis Wedin.
For Galaxy’s Hay, who has been in the mineralssector for close to three decades, it adds up to an unprecedented boom ahead.
“If you think of the lithium industrytoday, it needs to double every two or three years for the next decade. Thegrowth is just unprecedented for a mineral.”
According to investment bank Cannacord Genuity,the EU alone is planning to build 700 GWh (1,000 billion Watt hours) of batterymanufacturing capacity by 2030.
As a general rule of thumb, every KWh of batterycapacity produced requires a kilo of lithium.
Analysts agree there is a significantshortfall in supply ahead.
Macquarie Equities research this month saide-vehicle demand has transformed the outlook for the lithium market andupgraded its price forecasts between now and 2025 by 30 per cent to 100 percent.
“We expect limitations on the likely supplyresponse to see the market shift to a deficit in 2022, with significantshortages emerging from 2025.”
www.smh.com.au/business/companies/electric-car-battery-demand-puts-lithium-in-pole-position-20210420-p57knc.html
(20min delay)