Where To Look As The Lithium Boom Unfolds In 2017 (Sponsored Post)

TM editors' note: This article discusses a penny stock and/or microcap. Such stocks are easily manipulated; do your own careful due diligence.

The sweetest spot in the Lithium rush is now definitively Chile: It’s the world’s biggest venue, and it’s about to explode as Tesla (TSLA) flips the switch on its battery gigafactory, Chinese-Korean investors prepare to drop $2 billion on a new Chilean gigafactory, and the government has a change of heart that has lithium at its core.

Against this backdrop, we’re not just looking at the new ‘Who’s Who’ of lithium. We’re beyond that. Now we’re looking at who’s going to advance to new production first, with the highest grades of low-cost lithium.

Bearing Resources Ltd. (BRGRF), acquired a world-class resource in Chile that gives it the second-most advanced lithium project in the world, is a front-line contender.

While 2017 was ushered in with the euphoric fanfare of Tesla’s new gigafactory, which is now operational, the coming years will be all about lithium; and all about finding and developing new supply.

Tesla already has some 330,000 orders for its Model 3 electric vehicle—100,000 of which it has promised to deliver by the end of the year—and securing lithium supplies has never been more critical.

According to Macquarie Bank, the share of lithium demand from electric and hybrid vehicles is due to surge from 10 percent in 2015 to 33 percent by 2021.

Lithium expert Joe Lowry says demand should double between now and 2020, driven by the massive battery market, producers are in no position to keep up with this in the medium or long term.

Today’s global lithium-ion cell production is only enough to supply around 900,000 to 1 million electric vehicles—or, in other words, a meager 1 percent of the demand considering 100 million light EV sales, according to Evercore ISI analyst George Galliers.

PriceWaterhouseCooper also agrees that “supply will continue to trail until new projects come online in the next five years.”

Lithium prices tripled even before the battery gigafactories got off the ground. Tesla’s has already opened in Nevada, and 11 more are in play. The battery supply chain is exploding, and the math is brilliant.

As Lowry puts it: “No matter what certain “experts” say – supply and demand are NOT in balance. If the market is adequately supplied, why are we having the current price run-up?”

Everyone is preparing for a bull market that will be one of the longest bull runs of the century. But this time around, there’s a new ‘cartel’ in town, and it’s full of small-caps like Bearing Resources. Though 90 percent of global lithium production is now controlled by four players—Albermarle Corporation (22 percent), FMC Corp (10 percent), Chile’s SQM (21 percent) and Chinese Sichuan Tianqui Lithium Industries (21 percent)—it’s time to move over for new players.

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Derek Snyder 2 years ago Member's comment

Thanks. How can I learn more about additional lithium investment opportunities?

Mad Money 2 years ago Member's comment

Had no idea #Chile was such a hotspot for #Lithium!

Alexa Graham 2 years ago Member's comment

Agreed, I'll be looking more closely into these #lithium opportunies.

Cristian Montecinos 2 years ago Member's comment

Interesting article. As a #Tesla owner I can appreciate the steps towards innovation that $TSLA are taking.

David B. Johnson 2 years ago Member's comment

$BRGRF certainly looks interesting.

Bill Johnson 2 years ago Member's comment

"#BearingResources Ltd. ($BRGRF), acquired a world-class resource in Chile that gives it the second-most advanced lithium project in the world, is a front-line contender." Which company has the most advanced project? #Tesla $TSLA?

Angry Old Lady 2 years ago Member's comment

Couldn't agree more.

Barry Hochhauser 2 years ago Member's comment

Lots of opportunities in #lithium these days!

Joe Economy 2 years ago Member's comment

Two thoughts: its true that any scarce commodity will increase in price the higher the demand gets for that commodity (bullish argument for lithium mining stocks) BUT lithium is only a small component of Tesla's lithium ion battery, and with increasing giga factories comes greater economies of scale and therefore cheaper production costs to produce said car batteries. For this reason, I question whether lithium stocks will directly benefit from Tesla's expansion. Interesting to see how things play out though.