Lithium Mining
Investing in lithium
Among its several industrial uses, lithium is an integral component in the production of rechargeable batteries. These batteries are used to power portable devices, such as smartphones and tablets, feeding the increasing demand for ‘energy on the go’ products. Lithium is also used in developing batteries for electric vehicles , such as cars and scooters, which has seen production levels increase greatly since it first began. There are many other uses for lithium, such the creation of ceramics and glass.
Lithium is mainly sourced from spodumene mines or extracted from brine deposits. As one of the world’s largest producers of lithium, Australia contains the most spodumene mines. Brine production is mainly concentrated in South America. The two main types of lithium produced by companies are lithium carbonate and lithium hydroxide.
As expectation grows, developers are focused on trying to create lighter and faster products and are concerned about the types of lithium used in the production of their products. Where renewable technology is growing rapidly and huge companies like Tesla are relying on lithium as a key ingredient of its products, the demand for lithium has increased greatly.
Where some traders are worried by possible volatility in the market, other traders view investing in lithium as a great opportunity to gain potential reward from a market that has seen a rapid rise in demand.
Going Forward, the Market Is Looking White - Hot
Pretty much everything takes a battery these days, but lithium has a few other uses than just batteries.
Heavy industries use lithium as a flux additive to iron and steel, and lithium carbonate can even be prescribed by doctors as a mood stabilizer. Certain oxides of lithium can be used to purify the air, and lithium fluoride in particular is used in high-end telescopes.
In 2020, the world mined a combined total of 82,000 tons of the precious white metal. At $8,000 per ton, that's a sizable market even during the height of the pandemic.
Slightly above 0.41 million metric tons of LCE were produced; in 2021, production exceeded 0.54 million metric tons (a 32 percent year-on-year increase). Our current base-case analysis sees lithium demand of 3.3 million metric tons or a compounded 25 percent growth rate. Due to the short lead times associated with new lithium production, we only have visibility of 2.7 million metric tons of lithium supply in 2030; we expect the remainder of the demand to be filled by newly announced greenfield and brownfield expansions.
Investing in lithium with Wealth Elite
Given that lithium is a key component of producing rechargeable technology, the demand for the precious metal has grown rapidly.
With the hope that the demand will continue to rise, Wealthelite view lithium as an attractive investment right now.