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Lithium and the Quest for Efficiency: The Benefactors of the High Tech Boom

COMMENTARY–ProspectingJournal.com–In unveiling its latest Ipad, Apple has once again epitomized an unmistakable trend in consumer electronics; that we subside in an electronic era in which we demand greater content but even greater efficiency. It is a demand that inevitably forces us to develop products of such quality that both capacity and battery life is improved with each new model. It is this demand that is naturally driving for greater reliance on green and clean technologies, because in terms of efficiency, such energy sources are unmatched. Without much notice we are setting a stage in which rare earth metals such as lithium, a key ingredient in the clean tech push, will be devoutly called upon. Like many other rare earths, lithium is playing a central role in the push for efficiency. So in a consumer electronics industry that strives for such, demand for lithium is poised to grow. But lithium is by no means restricted to any single industry in particular. In fact, it has such wide-ranging properties that many believe it will prove stable and profitable throughout the next several decades.

Lithium is extremely light and boasts a very high energy density. It also holds an unmatched advantage in energy storage, meaning lithium batteries lose very little of their capacity with each cycle of charging. Such attributes have already made it the number one choice in the production of portable devices. With no substitutes of the same quality and efficiency, lithium batteries will likely continue to prove essential in the growth of this key market. But it also holds other properties. Demand for the metal will also likely run parallel to our thrust towards greener alternatives. For instance, it is being used as a main ingredient in the production of electric cars and hybrid vehicles. And as governments continue to push their rhetoric towards cleaner and greener consumption habits, it is likely to benefit from a greater concentration on such markets. In truth, Lithium is currently used in a number of crucial markets, ranging from electric cars and alternative energy production to batteries and ceramics, providing a measure of guarantee about its perceived demand. It explains why a number of companies have been making a lot of noise of late.

Given the growing importance and reliance on lithium and other rare earths, many companies must now consider themselves fortunate to be involved in such a promising industry. But few have stamped down an authority of the likes of Australia-based Galaxy Resources Limited. Last week the company announced they would take over Canada’s Lithium One, in a deal worth $109.10 million. The merger will have given Galaxy Resources a new status as the largest pure-play lithium producer in the world, based on market value. And the purchase of Lithium One will provide the company with secondary benefits: the Sal de Vida project in Argentina. As a result, Galaxy Resources will benefit from the advantage of producing two resources at one site. Iggy Tan, managing director of Galaxy Resources, claimed, “we are interested in the brine lithium side because it also produces a lot of potash…Potash is an excellent by-product, it is used in agriculture and there is high demand”. And according to Tan, current lithium carbonate consumption levels of 140,000 are likely to triple within the next decade.

It is hard to not believe it. In lithium there is a growing portable electronics industry that completely relies upon its efficiency. Its growth will also enjoy a progression in tandem with our efforts to become cleaner, greener consumers. And given the lack of alternatives for the metal, it is likely to enjoy a degree of exclusivity.  Those who have taken strides to ensure a greater share of output are only likely to benefit enormously. Because, in truth, there are very few reasons to doubt it isn’t on the brink of a boom.

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Jason Staeck
ProspectingJournal.com

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