Lithium Gets Power Boost From China
LOS ANGELES, October 10, 2017 /PRNewswire/ --
An announcement by China's Xin Guobin, the country's industry and information technology vice minister stating that China plans to ban new vehicles powered by gasoline and diesel has given lithium a real boost.
Companies in the lithium mining and production space already feeling the wave of enthusiasm include Orocobre Ltd. (TSX: ORL) (OTC: OROCF), FMC (NYSE: FMC), Galaxy Resources (OTC: GALXF) and NRG Metals Inc. (TSX-V: NGZ) (OTC: NRGMF).
Lithium, the white powdery metal that has been dubbed the "new gasoline" by Goldman Sachs, is in major demand and expected to rise even more as initiatives like China's take hold.
China is the world's fastest-growing market for alternatively fueled vehicles, and it is predicted that demand in the country will hit 6 million units a year by 2025.
Electric Vehicles (EVs) depend on lithium-ion batteries for efficient storage and operation, and increased demand is creating what is already looking like a significant shortfall for the foreseeable futures.
On the plus side, there are some very promising lithium companies who are ready to step in and create more lithium and new or previously untapped supplies.
And while the big producers have the upper hand now, some smaller companies are using the current positive market momentum to move fast and capture the prize.
One early entrant that has gone to the most likely source for lithium is NRG Metals Inc. (TSX-V: NGZ.V [https://web.tmxmoney.com/quote.php?qm_symbol=NGZ ]) (OTCQB: NRGMF [https://finance.yahoo.com/quote/NRGMF?p=NRGMF ]), who have positioned themselves with a potentially huge lithium brine project in South America's productive "lithium triangle".
Existing producers already seeing their share prices rewarded for upping their stake in the lithium game include Australia's Orocobre Ltd. (TSX: ORL.TO) (OTC: OROCF) who just rallied 14% after announcing maiden year profits, FMC (NYSE: FMC) the diversified chemical company that rallied 87% in 2017 based largely on its lithium unit, as well as Galaxy Resources (OTC: GALXF), also an Australian mining concern that just rose 7% on revenues of $14.1 million for the half-year ending June 2017.
LITHIUM DEMAND SOARS
China's new mandate, coupled with existing plans by Tesla, BMW, Volvo and now Volkswagen have sent the expected demand for lithium soaring.
Consultants Roskill estimate 785,000 tonnes of lithium carbonate equivalent a year will be needed by 2025, amounting to a 26,000-tonne shortfall from anticipated supply, compared to 217,000 tonnes of demand versus 227,000 tonnes of supply this year.
Others expect an even larger deficit.
There are several major producers of lithium who are increasing their production and refining capabilities, but even they will not be able to fulfill the massive appetite for lithium needed to power these new markets.
GETTING FROM HERE TO THERE
To meet the rapidly growing demand, analysts say that one new lithium mine will need to come on line each year through 2025. That's just to answer existing demand.
About two-thirds of proven reserves of lithium are concentrated in a small, high-elevation area of South America called the "Lithium Triangle", located at the intersection of Argentina, Bolivia, Chile.
That's the area where NRG Metals has begun rolling out its lithium strategy in the Puna Region, considered one of the most productive in a country that produces about 50% of the world's lithium.
Most lithium appears as tiny particles suspended in briny solutions that have to be pumped to the surface, and extracting lithium through evaporation, which can take months.
In reality, just four companies account for 86% of global lithium production with over 70% of lithium production based South America, mostly in or around the Lithium Triangle.
NRG METALS' PERFECT POSITION
NRG is a Canadian based mining company, but its lithium interests are located in Argentina. It makes good sense based on Canada's strong track record for global mining.
This small, but well-run company has put itself right at the heart of the lithium trend. Its two primary projects are the Salar Escondido lithium project, a well-developed project heading into drilling, and the Hombre Muerto North lithium project in the province of Salta, now under exploration.
The region is also host to the Hombre Muerto Salar, where FMC is producing approximately 20,000 tonnes of lithium carbonate equivalent per year, as well as Galaxy Resources' large development stage Sal de Vida project.
NRG Metals recently released news of its "Vertical Electrical Sounding (VES) geophysical survey that has identified a highly conductive horizon that is interpreted to represent a brine target with potential to host lithium."
Basically, the sophisticated technology has outlined what it is like a salt lake, about 4 kilometers by 6 kilometers in size located at depths from 70 to 300 meters below the surface.
NRG Metals has been approved to drill and define the actual lithium resources on their property.
At this stage of the game the field is still wide open. As initiatives to increase the EV market emerge, new producers and near term producers of lithium will surely benefit from the surge.
While it is one of the relatively new entries to South American lithium development, NRG Metals has rapidly advanced two significant projects. Focusing on its promising salars in the lithium rich region, NRG Metals appears in step with the serious lithium companies and looking to immediately join their ranks.
POTENTIAL COMPARABLES
Orocobre Ltd. (TSX: ORL.TO) (OTC: OROCF)
Orocobre Limited operates primarily in Argentina in the mining industry. The Company engages in the production ramp up of its Olaroz Lithium Facility and the operation of Borax Argentina S.A. (Borax Argentina). Its segments include Corporate, the Olaroz project, South American Salars and Borax Argentina. Its primary focus is on exploration for and development of lithium, potash and salar mineral deposits. The Company's assets also include boron mines and processing facilities of Borax Argentina and a portfolio of brine exploration projects. Its Olaroz Lithium Facility is located in the Puna region of Jujuy Province in northern Argentina, over 230 kilometers northwest of the capital city of Jujuy.
FMC (NYSE: FMC)
FMC Corp. is a Philadelphia-based chemical company which is swiftly ramping up its lithium production. Last year, FMC said it was planning to triple lithium hydroxide production capacity by 2019. The first phase of the plan has already started. FMC management also said that it was not ruling out the possibility to spin-off FMC's lithium segment as a separate publicly owned company. BofAMerrill Lynch recently upgraded FMC stock to "Buy" from "Underperform," increasing the price target to $103.00 from $66.
Galaxy Resources (OTC: GALXF)
Galaxy Resources Limited is a lithium-focused resources company, with assets spanning Australia, Canada and Argentina. Galaxy is currently advancing plans to develop the Sal de Vida Lithium and Potash Brine Project ("Sal de Vida") in Argentina, which is situated in the Lithium Triangle, a region where Chile, Argentina and Bolivia meet. Sal de Vida is a proven high quality resource has excellent promise as a future low cost production facility. Galaxy also owns the Mt Cattlin Spodumene Mine near Ravensthorpe in Western Australia and the James Bay Lithium Pegmatite Project in Quebec, Canada.
For a more in-depth look into NRG Metals Inc. you can view the in-depth report at USA News Group: http://usanewsgroup.com/2017/10/09/how-south-americas-lithium-triangle-is-gearing-up-to-feed-our-battery-addiction-1-2
http://usanewsgroup.com
info@usanewsgroup.com
Legal Disclaimer/Disclosure: This piece is an advertorial and has been paid for. This document is not and should not be construed as an offer to sell or the solicitation of an offer to purchase or subscribe for any investment. No information in this Report should be construed as individualized investment advice. A licensed financial advisor should be consulted prior to making any investment decision. We make no guarantee, representation or warranty and accept no responsibility or liability as to its accuracy or completeness. Expressions of opinion are those of USA News Group only and are subject to change without notice. USA News Group assumes no warranty, liability or guarantee for the current relevance, correctness or completeness of any information provided within this Report and will not be held liable for the consequence of reliance upon any opinion or statement contained herein or any omission. Furthermore, we assume no liability for any direct or indirect loss or damage or, in particular, for lost profit, which you may incur as a result of the use and existence of the information, provided within this Report.
DISCLAIMER: USA News Group is Source of all content listed above. FN Media Group, LLC (FNM), is a third party publisher and news dissemination service provider, which disseminates electronic information through multiple online media channels. FNM is NOT affiliated in any manner with USA News Group or any company mentioned herein. The commentary, views and opinions expressed in this release by USA News Group are solely those of USA News Group and are not shared by and do not reflect in any manner the views or opinions of FNM. FNM is not liable for any investment decisions by its readers or subscribers. FNM and its affiliated companies are a news dissemination and financial marketing solutions provider and are NOT a registered broker/dealer/analyst/adviser, holds no investment licenses and may NOT sell, offer to sell or offer to buy any security. FNM was not compensated by any public company mentioned herein to disseminate this press release.
FNM HOLDS NO SHARES OF ANY COMPANY NAMED IN THIS RELEASE.
This release contains "forward-looking statements" within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E the Securities Exchange Act of 1934, as amended and such forward-looking statements are made pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. "Forward-looking statements" describe future expectations, plans, results, or strategies and are generally preceded by words such as "may", "future", "plan" or "planned", "will" or "should", "expected," "anticipates", "draft", "eventually" or "projected". You are cautioned that such statements are subject to a multitude of risks and uncertainties that could cause future circumstances, events, or results to differ materially from those projected in the forward-looking statements, including the risks that actual results may differ materially from those projected in the forward-looking statements as a result of various factors, and other risks identified in a company's annual report on Form 10-K or 10-KSB and other filings made by such company with the Securities and Exchange Commission. You should consider these factors in evaluating the forward-looking statements included herein, and not place undue reliance on such statements. The forward-looking statements in this release are made as of the date hereof and FNM undertakes no obligation to update such statements.
Media Contact Information:
FN Media Group, LLC
editor@financialnewsmedia.com
+1(954)345-0611
SOURCE USA News Group
