Tesla Completes World's Largest Lithium Battery Ahead of Schedule
LOS ANGELES, December 5, 2017 /PRNewswire/ --
Tesla announced this week that the company had fabricated the world's largest lithium-ion battery in less than 100 days.
This new movement to faster lithium cell production ups the ante for all lithium companies including Albemarle (NYSE: ALB), Sociedad Quimica y Minera de Chile (NYSE: SQM), Lithium Americas Corp. (TSX: LAC) (OTC: LACDF) and NRG Metals Inc. (TSX: NGZ) (OTC: NRGMF).
Rechargeable lithium batteries have been on the market since the 70s, but lithium is finding a new foothold in battery technology. With the demand for large scale applications for rechargeable batteries, lithium batteries are being used in electric vehicles (EVs) and other major clean energy products.
Market watchers predict that the massive increase in demand brought on by automakers, power storage systems and new applications will create a potential significant shortfall by 2020.
Few expected that manufacturers and power supply companies would reach these heights so quickly.
Lithium companies that have seen their share prices rising with demand include leading producers Albemarle (NYSE: ALB) and Sociedad Quimica y Minera de Chile (NYSE: SQM), along with other junior miners such as Lithium Americas Corp. (TSX: LAC) (OTC: LACDF), that has lithium projects in Argentina and Nevada, USA.
One of the newer, developers on this sector is NRG Metals Inc. (TSX: NGZ [https://finance.yahoo.com/quote/NGZ.V?p=NGZ.V ]) (OTCMKTS: NRGMF [https://finance.yahoo.com/quote/NRGMF?p=NRGMF ]) that is on track in the most prolific region for lithium. NRG Metals has a potentially huge lithium brine project in South America, right alongside the major producers there.
TESLA RINGS THE BELL
Tesla proudly announced this week that they had fabricated the world's largest lithium-ion battery in less than 100 days. This huge lithium-ion battery is being called the "Powerpack", and it's being used to power thousands of South Australian homes during periods of blackout. It's a major breakthrough for lithium, serving nearly 30,000 people from one backup source. This is great news for the lithium-ion power cell developers and manufacturers, since longer manufacturing times could be one of the drawbacks of the new energy source. Tesla is apparently out to dispel any concerns about being able to deliver product in a timely way.
SPEEDY MANUFACTURE ADDS TO DEMAND
A number of very large manufacturers of products that could utilize lithium-ion power cells have been reluctant to adopt the technology due to timing and manufacturing concerns. Based on Tesla's ahead-of-schedule delivery on the world's largest lithium battery, the market for lithium-ion batteries could see additional expansion over the next several years as timing improvements come in to play. Lithium is increasing in demand all over the world. The fact that Tesla is building and testing new lithium technology only lends to the future of rechargeable batteries. In fact, there's such a high demand for the metal that supply has been a debatable concern in the future forecast. Roskill, the industry watcher calculating supply stocks, estimate 785,000 tonnes of lithium carbonate equivalent a year will be needed by 2025. That amounts to a 26,000-tonne shortfall from anticipated supply. Demand this year was 217,000 tonnes compared to 227,000 tonnes of supply. Lithium companies are moving quickly to increase their ability to deliver more pure lithium, but so far the forecast demand is outpacing producers. The solution is going to also require new sources of pure lithium. Based on the current sources for lithium, analysts suggest we'll need one new lithium mine coming into production every year through 2025. That only accounts for the demand prior to new EV developments this year and any added demand driven by better Li-ion technology.
NRG METALS's SIMPLE ANSWER
South America and Australia are the two big regions for new or near-term producers in the lithium market. And while Australia currently produces more lithium, South America's "Lithium Triangle" holds considerably more lithium reserves. Logically, emerging lithium company NRG Metals is developing its lithium prospects in the Puna Region of Argentina. The area is considered to be one of the most productive in a country that produces about 50% of all lithium. NRG Meta's two lithium projects - The Salar Escondido and the Hombre Muerto North - which could both be perfectly timed to provide new lithium resources. At the Hombre Muerto North lithium project in the province of Salta, the company's prospect is in the same basin as the existing FMC Lithium Fenix Mine that has been producing lithium carbonate during the past 20 years. It is also adjacent to the Galaxy Resources Sal de Vida Project which is rated as a best undeveloped lithium project in the region. The Salar Escondido is a well-developed project that NRG Metals is now drilling to establish what it counts as a large brine type lithium deposit. The company is releasing results continuously showing advances toward production. In a big step, NRG just entered an agreement with Chengdu Chemphys Chemical Industry Co., Ltd. of Chengdu, China, regarding the further exploration and development of the Hombre Muerto North Lithium Project, including a Lithium Offtake Sales Agreement. This could mean that NRG Metals could end up selling lithium before it's even mined.
FASTER, BETTER LITHIUM TECHNOLOGY
Tesla is just one of several majors that are sending the Lithium market rocketing. News of major innovations toward better performing, more stable Li-ion batteries is also emerging and helping push the need for a metal that was little-known less than a decade ago, but now is front and center. It's also putting the producers and near-term producers of lithium in the spotlight right now. The likely producers, especially those in South America, will have to step up now in order to offset demand. Since the rise of lithium, consistent research and development has led to better lithium use. We're constantly finding out new ways to use lithium and better ways to harness the high energy density it offers. Companies around the world, such as Tesla, have helped push forward the demand for lithium, and new innovations in rapid manufacturing, safer batteries and longer cell life can only add to the demand for this growing green power source.
POTENTIAL COMPARABLES
Albemarle (NYSE: ALB)
Albemarle Corporation develops, manufactures, and markets engineered specialty chemicals worldwide. The company offers lithium compounds, including lithium carbonate, lithium hydroxide, lithium chloride, and lithium specialties and reagents for applications in lithium batteries, high performance greases, thermoplastic elastomers for car tires, rubber soles and plastic bottles, catalysts for chemical reactions, organic synthesis processes, life science, pharmaceutical, and other markets; cesium products for the chemical and pharmaceutical industries; and zirconium, barium, and titanium products for pyrotechnical applications. Albemarle Corporation was founded in 1994 and is based in Charlotte, North Carolina.
Sociedad Quimica y Minera de Chile (NYSE: SQM)
Sociedad Quimica y Minera de Chile S.A., is a producer of potassium nitrate and iodine. The Company produces specialty plant nutrients, iodine derivatives, lithium and its derivatives, potassium chloride, potassium sulfate and certain industrial chemicals. Its segments include specialty plant nutrients, industrial chemicals, iodine and derivatives, lithium and derivatives, potassium, and other products and services Lithium and its derivatives are used in batteries, greases and frits for production of ceramics. Potassium chloride is a commodity fertilizer that is produced and sold by the Company across the world.
Lithium Americas Corp. (TSX: LAC) (OTC: LACDF)
Lithium Americas Corp., a resource company, engages in the acquisition, exploration, and development of mineral properties in Nevada. The company explores for lithium deposits. It primarily holds interests in the Cauchari-Olaroz Project located in Jujuy province of Argentina; and the Lithium Nevada Project covering approximately 15,233 hectares of area located in northwestern Nevada. The company was formerly known as Western Lithium USA Corporation and changed its name to Lithium Americas Corp. in March 2016. Lithium Americas Corp. was incorporated in 2007 and is headquartered in Vancouver, Canada.
For a more in-depth look into NGZ you can view the in-depth report at American News Group: http://usanewsgroup.com/2017/11/27/junior_lithium_players_are_soaring-2-2
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