The other day, a public transit company in Montpellier, France, made the decision to go “all-electric” after concluding that hydrogen would cost up to six times more than operating on battery power. To do so, they’re canceling a 51-bus contract already in motion.
Many companies are making the switch from hydrogen and gas to electric for mobility. And, that’s not to say hydrogen isn’t a viable option because there are indeed many perks to using hydrogen over electric, as well as the combination of both under certain applications.
But as EV adoption continues to grow, so does the need for lithium. And unfortunately, some experts are projecting a slowdown in EV production without the available lithium necessary to create each battery going into 2030 and in some situations, global EV production will be delayed until at least 2023.
As lithium production continues to accelerate, there's a major risk in store for companies whose demand outweighs supply availability. Not only this, but some of the more prominent manufacturers like Ford, who expects to produce no less than 150,000 electric trucks a year, and its battery partner, SK Innovations — or General Motors and its battery manufacturer, Ultium Cells LLC — may themselves start hoarding lithium to ensure there’s an adequate supply of lithium, as demand increases — ultimately leaving the “little guy” in the dust.
In a recent report by market analyst Fitch Solutions, global lithium output is expected to rise by about 600,000 tonnes between now and 2025 — a sharp contrast against the 240,000 tonnes produced between 2016 and 2020. The company also expects to see an increase of 290,000 tonnes between 2026 and 2030 — conservatively speaking and not factoring in the global shift towards EV by government officials across the world.
While the research firm expects production numbers in Australia to triple by 2030 and in Brazil by five times over, it only expects places like China, Argentina and Chile to double during this time. They also expect to see a significant jump in production through emerging sources in developed countries like the U.S., Canada, Germany, and some other countries in Europe and developing countries, such as Mexico, Serbia, and Zimbabwe.
Per Mining.com, technological advancements in extraction will progress while posing an upside risk to supply.
According to the site, “the structure of the industry, shape of the cost curves and ESG considerations will continue to evolve, the analyst notes. The upcoming development of lithium recycling could also ease some of the lithium supply issues in the longer term.”
These advances will allow lithium to be extracted much quicker than previously expected. However, bottlenecks that could occur include the type of lithium deposits that can actually be extracted and the application of such deposits that can be used. Other factors include the hampering of new projects by regulators in key lithium markets, the geographic concentration actually available in each location, refining capabilities and market share among already established mining companies in the region.
With that said, here is a list of key players in the lithium mining market. These companies specialize in the mining exploration and extraction of lithium deposits. While some of these companies have already been producing lithium, others on this list have been focused on expanding their portfolios with the premium real estate necessary to fuel an all-out EV boom.
1. Albemarle Corp. (NYSE: ALB)
With a history that goes back to 1887, Albemarle is a leading global producer of lithium, bromine and refining catalyst solutions -- all of which are essential in developing electric vehicle batteries. Based out of Charlotte, North Carolina, sustainability has become a central focal point of Albemarle and is almost necessary for managing its diverse global footprint of world-class resources. As of 2020, Albemarle was the largest provider of lithium for electric vehicle batteries.
On January 13, 2022, Albemarle announced plans to invest in 6K and sponsor the development of the UniMelt® system for advanced, sustainable materials production. 6K is an emerging leader of microwave-controlled plasma technology, and Albemarle has decided to explore the use of 6K's patented UniMelt® system to develop novel lithium battery materials using what could be pretty disruptive manufacturing processes.
The companies broke down the power of said technologies in a recent press release, stating that “ if a conventional 16-GWh battery cathode production plant was converted to 6K's UniMelt platform, it would reduce CO2 emissions by 70% (equal to 10M trees per year); lower water consumption by 90% (6.3M barrels per year) and reduce wastewater production by 100% (7 million barrels per year) while requiring a 50% smaller factory footprint.”
In addition to its work with 6K, Albemarle has also committed to new opportunities in the energy storage sector, teaming up with Volta Inc. (NYSE: VLTA) and disclosing the details at a later date.
2. Lithium Americas Corp. (NYSE: LAC)(TSX: LAC) — Thatcher Pass Nevada
Lithium Americas is focused on advancing the Cauchari-Olaroz project in Jujuy, Argentina and the Thacker Pass project in Nevada to production. Thacker Pass is the largest known lithium deposit in the United States and the next large-scale lithium mine in the world, while the Cauchari-Olaroz project is being called the “next low-cost brine mineral project in Argentina.”
Formerly known as the Western Lithium USA Corp. Lithium Americas is based out of Vancouver, Canada. It’s recently made news due to a dramatic spike in the stock market. Even as EV stocks were falling, Lithium Americas zoomed passed, earning a price upgrade of at least $40 a share by at least three different analysts, according to Rich Smith at the Motley Fool.
"LAC holds the keys to a multitude of game-changing catalysts to help unlock value as operations begin and the potential for permits at Thacker Pass come to fruition," explained one analyst, highlighting the fact that Lithium Americas received a federal permit to begin mining operations in 2021.
3. Orocobre Ltd. (ASX: ORE )
Orocobre is a medium-sized producer of advanced lithium production based in Argentina. Orocobre is known as one of the leading companies in Argentina's “Lithium Triangle.”
"Long life, expandable and sustainable." The company has built the first large–scale, brine-based lithium project in Argentina. It’s been in business for over 20 years.
Sales de Jujuy is the operating company formed by Olaroz -- the joint venture project between Orcocobre and Toyota's Toyota Tsusho Corporation (TYO: 8015) and the Argentinian Provincial Government of Jujuy’s State Energy and Mineral Society.
The company's Borax operation has been in business for more than 50 years, as the company extracts, explores and refines borates in the Salta-Jujuy Region. This operation includes two open-pit mines, concentrators, scalable refining capacity and significant land holdings.
The third arm of Orocobre Ltd., Advantage Lithium, is being called "one of the next lithium producers,” and it has won several awards for the success of its explorations.
On December 6, 2021, the company changed its name to Allkem Ltd. (ASX: ORE) after merging with Galaxy (ASX: GXY) and ultimately creating the 5th-largest lithium producer in the world.
In Argentina, Orocobre has completed around 60% of the Olaroz lithium carbonate plant expansion from 25,000 mt/year to 42,500 mt/year, while Galaxy has been developing the first stage of the Sal de Vida lithium brine project to produce around 32,000 mt/year of lithium carbonate.
Orocobre reports that its 10,000 mt/year Naraha battery-grade lithium hydroxide plant project in Japan was nearing completion, which would allow it to convert Olaroz lithium carbonate into battery-grade hydroxide. Under the new name, Allkem will also operate Galaxy's Mt Cattlin operation in Western Australia, which produces around 200,000 mt/year of spodumene concentrate.
The group plans on advancing its operations, permitting approvals at Galaxy's James Bay hard rock lithium project in Canada.
4. Cypress Development Corp. (TSX.V: CYP) (OTCQX: CYDVF)
While this company is based primarily out of Clayton Valley, Nevada, it is 100% Canadian-owned and focused on lithium extraction.
Work completed by Cypress led to the discovery of a world-class resource of lithium-bearing claystone adjacent to the Albemarle Silver Peak mine, North America's only lithium brine operation. In addition, Cypress is advancing its Clayton Valley Lithium Project in Nevada towards producing high-purity lithium hydroxide suitable for tier-one battery usage.
On December 21, 2021, the company uplisted to the OTCQX Best Market. It also completed a 7-day continuous run at its lithium extraction pilot plant, extending its lease agreement at its designed feed rate of one ton per day of lithium claystone from the Clayton Valley Lithium Project.
During this testing period, the company extracted over 400 samples of leach solutions and solids were collected and shipped to ALS Global for analysis.
5. Surge Battery Metals (TSXV: NILI)(OTCQB: NILIF)(FRA: DJ5C)
Headquartered in Vancouver, British Columbia, Surge Battery Metals is an early-stage metals and minerals exploration company that currently explores and operates at six different sites across Canada and the United States with multiple exploration targets in mining-friendly jurisdictions.
Its British Columbia jurisdiction is often considered the best mining jurisdiction in the world.
The company has a very capable and very talented exploration team in place with multiple years of experience in these jurisdictions. With the knowledge to build and expand a sustainable business, this company includes powerhouse leaders and influencers across various markets, each specializing in strategy, marketing, capital markets and administration.
Many of these leaders, such as former EVP of BC Hydro’s Transmission & Distribution (T&D) business group and now CEO Greg Reimer, have hailed from larger, more well-established organizations, coming together to build a game-changing startup from the ground up.
While lithium is its primary commodity and exploration sites just miles down the road from Tesla’s Nevada Gigafactory 1, Surge Battery Metals also explores nickel and copper, which are also in demand for battery production. On its own, nickel is now considered a rare commodity, with 42% of all nickel mined in Canada’s BC province.
Surge Battery Metals owns a 100% interest in 95 mineral claims located in Elko County, Nevada. The Northern Nevada Lithium Project is located in the Granite Range, southeast of Jackpot, Nevada and north-northeast of Wells, Nevada. The target is a Thacker Pass or Clayton Valley type lithium clay deposit in volcanic tuff and tuffaceous sediments of the Jarbidge Rhyolite package.
The company acquired 38 additional material claims in June of 2021.
Surge has been successful partly due to the unconditional and undying respect it has for the indigenous people and the harmonious working relationship they have built – to the point of becoming the largest private-sector employer of the First Nations indigenous people in Canada.
How You Could Benefit
Buy low, sell high. This is the most common phrase we hear when it comes to the markets.
The global lithium market size is projected to reach $8.24 billion by the end of 2027. The market was worth $4.09 billion in 2019 and will exhibit a CAGR of 9.2% during the forecast period – even with supply chain issues stemming from the global Covid-19 pandemic. With prices quickly rising for lithium use and production, it’s almost a guaranteed win (it seems) for any investor.
If you’re an investor, understand that this is “prime time” for stocks in EV, minerals and mining. Unfortunately, given the confusion of the Build Back Better act and the many roadblocks put into place by decision-makers such as Joe Machin, many stocks in this sector have dropped to new lows. While the author of this article is no financial advisor, this is something to consider as you do your due diligence and contemplate investing within these industries.
For those not interested in investing with just one company but who would still like to benefit from the opportunity that exists within this sector, there are several exchange-traded funds (ETFs) out there that would allow you to invest in multiple companies without taking significant risks.
One ETF dedicated to the lithium industry is LIT. Reasons to consider investing in LIT is that there seems to be high growth potential for a company that focuses on advancing clean technologies. In addition, LIT invests in companies throughout the lithium cycle, including mining, refinement and battery production, cutting across traditional sectors and geographic definitions.