A rocking EV industry, and the quiet energy storage sector,will gobble uptens of billions of tons of lithium during the next decade
Not since coal has there been a moment in history that it seemed as if human advancement hinged on a single mineral.
But that is now the case for lithium, a mineral that everyday life suddenly revolves around.
The reason being is that lithium is now at the heart of vital industries such as lubricants, communications, transportation, and – perhaps its most important use now – energy storage. Currently, there is enough lithium production capacity around the world to meet demand needs.
But… the demand for the energy metal is about to explode.
Citigroup estimates worldwide lithium demand will increase 64% in the next five years alone.
Longer-term lithium demand forecasts are even stronger. Multinational advisory firm Global Lithium LLC estimates that lithium demand will nearly quadruple in the next 10
That means 2018 will likely be remembered as the year lithium mining emerged as a mature industry and a highly prized investment sector.
The Age of Lithium Has Arrived at Full Throttle
How important is lithium to modern life?The mere mention of a shortage creates gut-wrenching anxiety with a market that feels major pressure to get on board with the unstoppable trend.
That was readily apparent during the past decade.Supply fears drove a price spike that saw lithium soar from $5,180 a metric ton in 2010, to more than $6,000 per metric ton in 2012 and $24,750 in March 2018… a 377% increase over 2010 levels.
Supply began to catch up with demand in late 2018 with lithium’s price per metric ton stabilizing around $16,000, which is still a 208% jump in eight years.
The news only gets better for lithium miners and investors. That’s because there are two surprise demand factors that should keep lithium prices high.
They are the mass expansion of electric-powered vehicles, and well as the rapidly expanding energy storage industry. Potential Winners Are Starting to Emerge
The runaway trends are why investors should keep their eyes on three well-run lithium miners – Clean Commodities Corp.(TSXV:CLE), Nemaska Lithium (TSX:NMX) and QMC Quantum Minerals Corp. (TSXV: QMC, OTC: QMCQF). QMC, as you’ll see, may have the highest upside though the trend favors each.
Electric vehicles of course, are headline makers that area driving the lithium trend.
Their acceptance across the globe is about to explode because EVs are forecast to reach parity with internal combustion vehicles – in both price and performance – during the next four years.
Shortly after that happens, at least half the vehicle sales worldwide will be made up of electric vehicles, according DNV GL, an energy consultancy.
125 Million EVs Will Need Billions of Tons of Lithium
In all, the number of electric vehicles on the road around the world will hit 125 million in the next 11 years, forecasts the InternationalEnergy Agency.
And this is what is driving supply anxiety. For example, the smallest EV, the Nissan Leaf, uses 20 pounds of lithium in its battery, while a big EV, such as a Tesla uses more than 350 pounds of lithium.
On the low end, demand for lithium for EVs alone could be 5 billion tons.
China and India, with nearly 4.5 billion citizens combined, will drive demand for EVs.
Tesla, though a big name in EV’s, will be a small player compared to General Motors, Volkswagen, Mercedes, and Ford—all of which see China and India as massive market opportunities.
GM needs to be the one of the most aggressive because it currently only has one EV, the Bolt. The company recently restructured its management in order to play catch up. GM plans to introduce 20 EV models in China during the next 14 years. Estimates are that it will be making 1 million EVs a year by 2020 or 2021.
Ford plans to invest $11 billion over the next three years with a goal of making 16 fully electric vehicles by 2023.
Pressing Demand Favors Large and Small Miners Alike
Of course, Ford’s investment pales in comparison to Volkswagen, which is dedicating $50 billion over the next five years to its EV line of vehicles.
VW’s massive investment should yield 50 all-battery EV models, which it will crank out at a rate of 2 million to 3 million vehicles a year, by 2025.
The world’s largest automaker has started to introduce its first wave of electric cars, including next year’s Porsche Taycan.
The rollout across its stable of 12 automotive brands is forecast to comprise about 15 million vehicles over the next five years as VWtransforms into a maker of self-driving, electric cars.
Junior lithium miners, such a Quantum, and majors such as Albermarle (NYSE:ALB), will likely be running three shifts of workers in order to meet soaring demand.
Energy Storage is a Major Emerging Trend
One of the most exciting trends driving lithium demand is residential energy storage. These are compact units that store solar (rooftop) generated energy. They can power a home for three to four days if need be.
This market is exploding at a record-setting pace growing 9 fold between 2017 to 2018, according to Wood Mackenzie Power & Renewables, an energy consultancy.
So far, in 2018, 24 states and the District of Columbia have passed or started action to make it easier for homeowners to install storage units.
The two prominent lithium-ion based units on the market today are Tesla’s 13.5-kilowatt-hour (kWh) Powerwall 2.0, and LG’s 9.3 kWh Chem RESU battery.
They won’t have an exclusive market for long. GE and Lockheed Martin are investing hundreds of millions of dollars in research, development, and commercialization of lithium-based energy storage.
This is why lithium could be one to the top investments for the foreseeable future.
In fact, Bloomberg New Energy Finance predicts that in the next 12 years, energy storage will mirror solar energy’s growth between 2010 and 2015, which was 700%.
Moreover, demand for lithium storage batteries is growing so quickly that supply cannot keep up.
Wood Mackenzie reported that “Over the last few months, we’ve heard consistently from residential installers and distributors that they’re unable to receive residential storage systems in the quantities ordered. This outcome is heavily influenced by lithium-ion battery supply constraints.”
Energy supply looks destined to be a mega trend driven by how much supply lithium exploration and development companies such a QMC Quantum Minerals (TSXV: QMC, OTC: QMCQF) can deliver to the market in the future.
The biggest winners will be the junior lithium exploration and development companies who are ready to expand. QMC Quantum Minerals fits that bill.
These Three Companies Will Thrive Meeting the New Demand for Lithium
As noted, Quantum is one of three small North American companies that could be the big winners as demand for lithium explodes.
If you are looking for a truly small junior with big potential Clean Commodities Corp. (TSXV:CLE) could be a very interesting find. It has five potential mine sites comprising more than 78,000 acres near successful mines owned by Nemaska; however, it has no defined proven and probable resource estimates yet. But…wait for those estimates before investing. Nemaska Lithium (TSX:NMX, OTC:NMKEF) has 24 million tonnes of proven and probable reserves at its Whabouchi mine in Quebec. It plans to mine ore there and haul it to its own nearby plant to produce lithium hydroxide and lithium carbonate. NMX could become one the world’s cheapest producer of these battery compounds. But only a fraction of the intended plant will be up and running this year. Nemaska will be fully ready for the surge late next year.
Meanwhile, we believe QMC Quantum Minerals(TSXV: QMC, OTC: QMCQF) is the most exciting and least risky of the small Canadian lithium exploration and development juniors. Not only does it have the advantage of reopening a former lithium mine for a fast startup, QMC is an undiscovered gem for multiple reasons.
QMC Quantum MineralsCan Jump Ahead of the Pack
Lithium investors did well playing the increased lithium demand thanks to laptops and cellphones. Then Tesla upped the game tenfold.Miners adjusted again.
Now, with the forecast for 125 million new EVs, and the fast expanding energy storage market, the miners will need to go into overdrive.
Now we look to QMC to fast-track its production in time to meet this new surge in lithium demand. QMC is reopening a historic lithium mine in Manitoba that was mothballed in 1957 when lithium prices were low. It is perfectly placed for access to rail and highways in a province that welcomes mining.
But the best news is that QMC began stripping the overburden to proceed with re-testing and reopening the mine last year. That means it can be ready to deliver lithium into growing demand very quickly. Great Property, Superb Prospects
QMC has claims to 22 areas covering 11,325 acres near Cat Lake in Manitoba.
According to QMC, “…the property covers the former Irgon Mine and several known pegmatite dikes of which currently the largest and best exposed is the spodumene-bearing Irgon Dike.”
Let’s break that down. Pegmatites are intrusions of richly crystalized rock that were formed when hot magma cooled. In this case, the pegmatites are of spodumene, which is the name for the mineral lithium aluminum inosilicate. Usually spodumene is dull and ashy gray, but sometimes it appears as the clear gemstones hiddenite and kunzite. Spodumene that is rich in lithium is a potentially rapid source of lithium.
The big point to know about QMC is that the Irgon Lithium Mine area it owns is possibly the best lode of lithium in the entire huge province. The four Cat Lake claims that QMC acquired in 2016 comprised1.2 million tons of ore grading 1.51% lithium oxide. This grade is higher than any other company’s lithium deposits in the province.
So,the Cat Lake/Irgonwas already exceptionally rich. But it just got richer, as QMC staked out additional 18claims to bring its holdings to 22 claims covering 11,325 acres. The Big Upside Is Wide Open to Small Producers
QMC’s ready-to-work holdings make it a surprisingly important company for its size.
The lithium industry is dominated by unfriendly and unstable sources. China and Chile now produce two-thirds of world supplies. Australia is third, but with only 12 percent.
You can easily see that a small increase in production for these large-scale producers isn’t likely to be a windfall for investors. Another ton of lithium to them is like adding a teaspoon of water to a gallon bucket.
But the majors shot themselves in the foot in an even worse way… To keep lithium prices from crashing, they decided not to expand production. Now they’re not ready and they cannot gear up rapidly for the coming surge. How China and Chile Gave QMC a Head Start
This is the most important reason QMC should be a big mover this year. It has the potential to get lithium to market faster than the big companies.
This is because there are two ways to produce lithium for manufacturers. The big Chinese and Chilean companies use the brining method. They flood large areas and allow the water to evaporate, leaving lithium salts behind.
For QMC, increasing production is a four-year processne year to build new dikes and flow systems and three more years for the water to evaporate. QMC is exploring for hard-rock lithium. As soon as it updates the mine’s historical resource estimate of 1.2 million tons grading 1.51% lithium oxide, it can begin the process to start moving some rock! QMC believes that report is accurate, all it needs to do is confirm.
9 Solid Reasons QMC Is the Best Lithium Play for 2019 and Beyond
1. QMC Is Working in a Mining Sweet Spot — In 2016, the Fraser Institute of Mining Companies rated Manitoba the Second Most Favorable spot for mining in the world. Friendly government, good roads and rails… and rich properties bring it all together. 2. Credible Practices, Believable Numbers Rule in Canada —Canada is a helpful government when it comes to mining, but not careless with investor’s money. A NI 43-101 reportwith exacting specifications and disclosures helps to protect investors but is not required. 3. 125 million EVs in the Next Decade — Volkswagen will lead the market with a goal of building 15 million EV in the five years. GM want to build 1 million EVs a year. 4. Residential Energy Storage — The forecast is for this market to grow as much as 700% in the next five years. The industry is already experiencing tight lithium supply against high demand. 5. Even Miners Are Making Lithium More Urgent — It may be ironic, but one other company likely to increase lithium demand is Komatsu. Komatsu, formerly International Harvester, makes mining equipment. It just tested its first 45-ton all-electric mine dump truck, which can haul 65 tons of rock. It’s NMC lithium battery pack weighs 4 ½ tons—yes, tons! 6. Technology Keeps Moving the Needle in Lithium’s favor —EV’s are here. But other technologies are increasing Li demand, too. Samsung has developed a new Li battery that can recharge 5X faster, in just 12 minutes, because it uses graphene balls in both the anode and cathode. The use of graphene will enable batteries with 45% more capacity than today’s batteries. 7. Buses Will Get There Faster — The move to electric buses is going even faster than with trucks. Chinese electric manufacturer BYD’s new Los Angeles factory will produce 1,500 e-buses annually. The company is also making Shenzen, China, the first major city in the world with an all-electric bus fleet. BYD has introduced e-buses in 21 European countries. 8. Pegmatites Mean Speed — Geological jargon can be daunting, but here’s what matters. QMC’s claims are on landsrich in pegmatites—formations of igneous rock that contain large crystals. Once a claim is established and mill is set up, production of lithium carbonate can begin within days. 9. Juniors Explore, Majors Buy — There could be a buyout to amply reward early investor in the future as QMC proves its Irgon Lithium Mine is championship quality.
Position Yourself for the New Lithium Surge Today with QMC Quantum Minerals
Most people think lithium miners are ready for all the new EVs, cell phones and laptops that will hit the market for the next few years, but 125 million new EVs is massive demand.
Moreover, very few analysts follow the fast expanding lithium-based storage battery market. It is a market that could grow 700% in the next five years.
This is why the most conservative forecast call for lithium demand to more than double over the next 10 years. Other forecasters suggest the market could quadruple.
Take your position in QMC Quantum Minerals (TSXV:QMC OTC: QMCQF) to put yourself among the earliest and biggest winners.
PLS Price at posting:
70.0¢ Sentiment: Hold Disclosure: Held
125 Million EVs Will Need Billions of Tons of Lithiumne year to build new dikes and flow systems and three more years for the water to evaporate.
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