lithium investing: 2018 key trends in the lithium mining markets

by:CTECHi     2020-03-13
There have been some positive changes in the lithium industry over the past year, such as the commitment of automakers to build a lineup of electric and plug-in
Hybrid cars.
These commitments from automakers activate the battery supply chain from lithium extraction and exploration to battery and module manufacturing.
In addition, the secondary application of lithium batteries, such as electric buses and fixed energy storage, continues to make great progress due to the decline in battery and motor prices.
Recent Emissions Control scandals and growing international pressure on the automotive industry have helped accelerate the introduction of electric vehicles.
In the 2017 quarter, both Britain and France said new gasoline and diesel cars would be banned by 2040, while China continues to build the new economy by forcing automakers to make more new energy vehicles or buy credit from other producers by 2020.
Overall, this year is a positive year for senior and junior producers as well as for lithium investors at exploration companies.
The supply of lithium has remained tight over the past few years, while demand has begun to increase, which has helped raise prices from $5,000/ton LCE to $13,000/ton LCE in November 2017.
In 2017, the car company made headlines when it announced it was about to go public --to-be-
Electric and plug available
Hybrid cars.
By the end of the decade, dozens of new energy vehicles are expected to be available.
Volkswagen Group (
After a major diesel scandal, they have changed direction as they announced plans to produce 3 million electric vehicles a year by 2025.
Nissan and several other major manufacturers have also announced plans to produce electric vehicles, some of which will also expand their battery manufacturing capabilities. Ford (NYSE:F)and GM (NYSE:GM)
It has announced plans to quickly launch 29 electric vehicles in the Chinese market in the next two years, which will enable these companies to meet the production and operation speed of 10% electric vehicles.
The automotive company and its strategic purchasing department believe that lithium batteries are a key part of their ability to improve
Increase battery production.
Batteries can be integrated into the automotive manufacturing process by 2019
2020. The manufacturing capacity of batteries and battery packs needs to be increased in 2018 --2020.
Battery materials companies such as LG Chem (OTCMKTS:LGCLF), Samsung (OTCMKTS:SSNLF)
And Panasonic, if they can position the best for the upcoming car battery boom, they are all ready to grow.
LG Chem announced plans to invest $1 in 2017.
6 billion of the new factories are located in Poland, which will generate 100,000 electric vehicle batteries.
In addition, the company is looking to invest in China to improve battery manufacturing capabilities. Panasonic (OTCMKTS:PCRFY)
Committed to increasing Tesla\'s output (NASDAQ:TSLA)
Gigafactory in Nevada grew annually from 35 GWh in 2018 to 105 GWh in 2020.
In China, CATL disclosed plans for a $2 billion IPO to launch an expansion plan to increase production from 7 GWh to 50 GWh by the end of a decade to support the move to electric vehicles
Due to the growing interest in electric vehicles, the battery materials business is significantly increasing global production to meet the needs of the automotive industry.
The battery materials business usually plans future production growth and takes time to purchase strategic components and materials such as lithium, which is very difficult to purchase in large quantities in the case of technical specifications.
The increase in the number of new electric and hybrid vehicles is activating the entire lithium supply chain.
Last year, LG Chem was reportedly unable to maintain battery production to meet the needs of modern electric vehicles.
2017 is the year that automakers have announced, and I expect 2018 to be the year that will continue to release products and change government policy.
I think, based on the announced increase in the number of electric vehicles, the battery market will continue to expand manufacturing facilities around the world.
If this happens, it may be led by large battery pack and battery manufacturers as well as by car manufacturers.
These companies or their direct material suppliers may have a deeper look at the strategic procurement of the various minerals needed to manufacture batteries.
The continued announcement by battery and car manufacturers will make lithium the focus, ensuring that project and construction financing is in place, and capital continues to enter the inventory of lithium producers in 2018.
After a few years of rumbling in the energy space around the ramp --
In the deployment of fixed energy storage systems, 2017 is a breakthrough in the industry.
Many high-profile, big-
While announcing a large number of new projects, large-scale installations have been completed.
These projects are either driven by private organizations wishing to participate in the utility services market, or directly acquired assets by utility companies and deployed under their umbrella.
With the development of the German and Italian markets, the global housing market continues to rise.
At present, the industry widely adopts small household and commercial storage systems in key markets such as Germany, Italy, California, Hawaii and the Caribbean.
Even in the whole non
Core markets, consumer perceptions of battery technology have created new markets that didn\'t exist a few years ago.
The North American and Caribbean markets have also reached a turning point as bank products are now widely used, solar contractors, utilities, energy services companies, other channels also provide a variety of user models for this technology.
Today, the main global channel for fixed storage projects remains the solar installation industry, which is currently proficient in lithium battery technology and will ensure that the industry continues to grow.
The main reason for the increase in fixed storage deployment is directly related to the reduction in battery costs, which is related to the slope-
The growth of the new energy vehicle market.
Over the past decade, battery prices have dropped from $1,000/kWh to $300/kWh today and are expected to continue to be below $100/kWh by the end of the decade
Some component and system integration companies have taken the approach of supplying cars
Premium batteries enter the residential market directly.
Although the product is not tailored directly to the use of the application, it does allow for lower-cost products, which is often an obstacle to adopting new technologies.
In my professional opinion, the US residential market will continue to grow from about 5,000 systems deployed in CY 2017 to 15,000-
20,000 systems in CY 2018.
Market opportunities can be summarized by geographical location.
Through the Caribbean region, in particular Puerto Rico, the demand for energy storage systems was very strong due to recent natural disasters, which made the island free of electricity for a long time.
On other islands, utility companies have dismantled the network.
Encourage the installation of metering projects for solar and storage equipment.
In Hawaii, grid supply options have been closed since the fall of 2017.
In short, all new solar photovoltaic projects must demonstrate that they can contain any excess power generated on site, which can be achieved by installing a battery system.
In California, the self-generated incentive program has been hit, but by providing strong financial incentives and a federal tax credit for solar storage assets, it certainly contributes to the deployment of these new technology systems.
Across the United States, consumers are embracing the application of the technology, including backup power as a base load, and avoiding exporting power back to the grid at depreciated energy prices.
Due to the reduction in battery technology costs and the increase in the penetration rate of renewable energy systems, secondary applications, such as fixed energy storage services, are gaining significant traction.
Utilities, energy services companies and large enterprises
Scale project developers have also discovered the value of energy storage for different stakeholders across the energy market, which has driven new demand, especially in terms of utilities. scale level. Large, utility-
Continue to plan and implement large-scale projects with greater storage capacity.
Lithium batteries in fixed storage applications have taken off but are still in the early stages, which is a clear trend.
More players are expected to enter the fixed storage market in 2018.
Although the market for fixed storage technology has reached a critical point, the overall impact on the lithium supply chain is still limited.
If the North American market reaches the estimated capacity of 10 KW systems at 15,000 hours per system, this will translate into the same storage capacity as about 2,000 electric vehicles.
Tesla\'s 100 MWh battery plant at CY 2017 is equivalent to the storage capacity of 1,200 electric vehicles.
Globally, if each segment of each key geographic fixed energy storage market continues to maintain growth momentum, then emerging demand will have a significant impact on the lithium supply chain.
This is especially true for large manufacturers of battery cells and battery packs, as they need to make decisions about the allocation of manufacturing capabilities and new investments.
In my opinion, the battery industry will turn to support the automotive industry.
Rating the battery due to opportunity.
This may encourage the development trend of the automotive industry.
Non-floor materials
Automotive applications.
According to the announcement issued by CY 2017, industry observers may see more and more headlines about new applications of distributed energy storage assets, such as the adoption of virtual power plants and blockchain technologies.
Another interesting market in 2018 will be utilities.
The scale industry, with the announcement and installation of the project, will occupy most of the headlines.
In the second half of 2017, the Chinese government extended time to domestic automakers to meet certain new energy vehicle tasks.
The government has confirmed that in 2019, more than 30,000 car manufacturers will need 8% of the fleet to become new energy vehicles.
This figure will grow to 10% per year in 2020.
The main reason for the delay is that the global lithium supply chain from lithium carbonate to battery materials cannot accelerate --
Fast enough, so the delay was implemented.
China is not the only country trying to build an electric transportation industry, as many other countries and companies are actively launching new products.
In general, these factors have caused significant restrictions on the lithium market, bringing prices in the past two years from $6,000/ton LCE to $13,000/ton LCE in November 2017.
In October 2017, it was reported that lithium carbonate prices in China\'s domestic market soared to more than $18,000 a tonne, while international prices remained around $11,500 to $12,000.
It is now expected that prices outside China will gradually catch up with prices inside China.
In the coming year, the main driving force to increase lithium in China will be related to the increase in battery production in various applications, in addition, the new factory needs inventory, to ensure that there is enough lithium raw material in the new battery plant to maintain production.
China is already the world\'s largest user of lithium in industrial applications, power transportation, fixed energy storage and consumer equipment.
However, the country produces only a small amount of lithium from the British and is not expected to increase annual production in the next few years.
It is clear that due to the lack of technical expertise in the development of lithium assets, China is looking out to meet their lithium supply requirements.
China has taken a number of ways to purchase strategic chemicals, including acquisitions and investments.
Lithium hard in Australia at 2012-
Talison Lithium, acquired for $0. 847 billion, recently announced plans to increase production through a $0. 4 billion investment in the Greenbush project in Western Australia.
In early 2017, lithium America announced a financing and offshore arrangement with China\'s Gan Feng lithium industry.
Under the terms of the agreement, Ganfeng\'s total investment of £ 19 was $0. 174 billion.
9% of lithium-American tradable shares have the right to purchase a fixed portion of lithium carbonate produced by the Cauchari project and provide a project debt financing of $0. 125 billion.
At the end of 2017, China Investment Group NextView acquired Canada-
Lithium exploration company based in lithium X (OTCMKTS:LIXXF).
Lithium X focuses on the development of the 2 million-ton LCE Lithium brine project in Salta Province, north of Argentina.
The picture above shows China\'s positive plan to increase lithium battery capacity, mainly due to the requirement that automakers produce 10% of the fleet in the form of electric vehicles.
This will help increase global production from 28 GWh in 2016 to 174 GWh in 2020.
Panasonic, LG Chemical, Boston electric power, CATL, Lisboa, CALB, BYD and Samsung are now adding capacity in China.
As China increases its battery manufacturing capacity to meet new demands for new energy vehicles and a variety of other applications, it is expected that at the same time as these activities, the demand for input materials will also increase.
Even if lithium hard increases
Rock production from Western Australia is still not expected to meet short-term demand
Semester requirements.
This will ensure that prices continue to rise in the next 12 months.
Argentina could be the hottest topic in 2017, with retail investors hoping to reach the booming lithium market.
After five years of reporting on the Argentine lithium business, I had the opportunity to visit the famous Lithium Triangle located in the mountainous northwest.
Two key macroeconomic factors have created demand in Argentina.
First, lithium demand soared as the automotive industry announced new energy vehicle products, triggering a series of activities downstream.
Second, on 2015, populist president Kristina Fernández de Kirchner was defeated in the general election.
New business in Argentina
Friendly leader mac Theo macry has been actively trying to attract investment into the overall economy, which has stimulated the activities of the lithium exploration and production market.
Political and economic action allowed for more favourable currency controls, which devalued the peso and began to shift to the cancellation of export taxes.
Favourable actions have also been taken in the maintenance and access of land claim information, coordination of tax regulations, and standard royalties, which clearly make it easier for exploration and existing mining companies to shorten their development and construction schedules.
The overall impact is that the world can expect to see some relief in bringing meaningful lithium capacity to market in the coming years.
With Argentina now open, the timing is no better as the country has the world\'s largest reserve of low-cost lithium products.
Today, there are only a few lithium production companies operating in Argentina, including FMC. (NYSE: FMC)and Orocobre (
See \"lithium mine-
Examine Opportunities in the monopoly of the productive oligopolies \").
FMC works well
Lithium saline was established in Salar de hombré Muerto, which has been successfully expanded in recent years.
Today, the factory produces 22,000 tons of LCE, an increase of 17,000 over 30% Tons of LCE.
2016. Yabao company (NYSE: ALB)
Venture into Argentina by acquiring exclusive exploration and acquisition rights for Anto Farra lithium resources.
The Company believes that the lithium resources of antofala will be certified as the largest lithium resource in Argentina.
Over the past year, prices for these diversified chemical producers have more than doubled, so demand for high-risk stock options has been high.
Some companies have identified shell listings as a good tool to quickly raise funds and travel to Argentina in order to obtain land parcels.
Now that dozens of small lithium exploration companies have raised millions of dollars and secured land parcels in the prolific lithium basin, preliminary drilling projects are underway.
It is clear that almost all of these companies have not advanced the technical expertise of the project by completing the feasibility study, so in the next few years Argentina may need some form of integration.
From a quality investment perspective, it is important to identify the companies that have established relationships with key players in the region, as well as partners who have committed to purchasing lithium materials produced, and there is a technical partner to help the development of the project, he can also bring the necessary construction financing to promote the development of the project.
Looking ahead, Argentina will attract foreign investment in lithium exploration, mining and processing.
The country created more than $1 in 2016.
Lithium investment will continue to grow 5 billion as existing producers, such as Orocobre, will increase production and other near-production
Regular producers such as lithium America plan to invest hundreds of millions of dollars in the region in the coming years.
The Argentine government now expects an annual output of 145,000 tons in 2022;
This will ensure that Argentina remains a hot spot.
Both retail and institutional investors want to make a profit in the emerging world.
The focus of Argentina is mainly on the examination-
The Olaroz basin, which attracts a lot of money from companies such as Orocobre (OTCMKTS:OROCF)
Lithium America (OTCMKTS:LACDF)
Advantage Lithium (OTCMKTS:AVLLIF), SQM (NYSE:SQM)
Toyota Trading Co. , Ltd (OTCMKTS:TYHOF).
At present, only Orocobre is operating in the Central American region, and lithium batteries are planning to build facilities with square meters and a sense of abundance.
Essentially the dominant lithium of spin
Orocobre has been established to further define the Basin and to mobilize plans to increase the production of lithium brine in Cauchari or to build a third independent brine facility within the basin.
With the removal of non-basins by Orocobre, the role of all parties in the basin is still emerging
Core assets will be fully focused on the Olaroz project while being upstream in the chemical business.
The dominant lithium company, which is currently conducting exploration activities, has announced a number of positive drilling results across the Lithium Americas website.
It is expected that Advantage Lithium will complete the drilling and pressure test in the first half of CY 2018, which will pave the way for the completion of the resource estimation and SCOPE study.
In my opinion, along with these efforts, the company will announce an Asian partner who has funds to support the construction of independent facilities and consume lithium materials produced on site.
While it is too early to draw a conclusion, the company is well funded and has the necessary technical expertise and local relationships to advance the project to the first half of CY 2018.
In 2016, a 50% stake in Minera Exar SA, a local operating business of lithium America, was acquired in net cash of $25 million.
Since the end of the transaction, these companies have begun to update the final feasibility study with the aim of outlining plans for 40,000 t lce per year. Cauchari-
Olaroz is expected to become the world\'s largest 3rd lithium salt water resource with construction and development permits.
In early 2017, lithium America, a lithium exploration company focused on its flagship lithium project, made significant progress in production.
Due to the unfavorable political environment in Argentina, the company\'s activities for many years stalled and finally successfully recruited the Chinese lithium giant Ganfeng as a project partner.
Established in 2000, Ganfeng Group is China\'s largest comprehensive producer of lithium, with an annual output of 30,000 tons.
Ganfeng\'s products include lithium metal, lithium hydroxide, lithium carbonate, lithium fluoride and lithium chloride.
Olaroz, the flagship project of Orocobre, is built with a nameplate capacity of 17,500 tons of LCE per year.
2017 was the first year of production by the company, with a total output of about 11,500 tons, which is still far from Olaroz\'s nameplate capacity.
The company has told shareholders that the vast majority of startups
The bottleneck has passed.
It is expected that the company will start to reach a level close to the nameplate capacity by the end of fiscal 2018. over-
Year-on-year growth in production.
Toyota has outlined a positive three-
A two-pronged expansion plan that will be fully implemented by the end of the decade.
First, the company will increase the nameplate capacity to 35,000 tons of LCE through a $0. 16 billion investment, thus doubling the annual production of Olaroz.
At present, the license for the second phase of the expansion of Olaroz is in place, which greatly reduces
The timing of risk development.
Second, a 10,000 ton/year lithium hydroxide plant will be built in Japan, using the government\'s strong incentives to offset a large part of the cost of capital.
Third, the proposed annual portfolio of lithium carbonate will be 17,500 T batteries
Existing business and 17,500 T industrial grade
Class, of which 9,000 tons will be allocated for the supply of the hydrogen oxide plant to be put into production in Japan.
In March 2017, Orocobre and superior lithium batteries announced the sale of certain non-
Core, exploration, Performance Advantage Lithium in Argentina.
Taking into account the land package, Advantage issued more than 46 million ordinary shares to Orocobre, retained 25% shares in the project and paid production royalties.
In the first half of 2017, the company successfully completed a $20 million round of financing aimed at advancing Cauchari real estate.
According to the forecast of 2018$7-$19 budget
10 million. The company has sufficient capital to conduct a feasibility study.
The company recently announced that it has reached its spending target of $5 million at Cauchari, giving the company a 75% interest on the project.
With this group of companies investing a lot of new money in the basin, it is clear that they will be the main focus of the lithium Saline market.
It is expected that in 2018, Olaroz-
The Cauchari Basin will continue to grow into the world\'s leading region with low cost, high quality batteries
Lithium carbonate grade.
Disclosure: I am/We are long orkov, avlf.
This article was written by myself and expressed my views.
I received no compensation (
In addition to Seeking Alpha).
I have no business relationship with any stock company mentioned in this article.
Editor\'s note: This article discusses one or more securities that are not traded on major US securitiesS. exchange.
Please note the risks associated with these stocks.
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