Brine Truth20 Mar 2018 22:15
The electric car revolution is driving a lithium-ion battery boom that could be worth $67 billion by 2022 - as long as a supply crunch doesn't choke it to death.
Traditional solar evaporation technology takes up to 24 months to extract lithium from metal heavy brine.
Not only that - traditional methods only recover 40 percent of the resource.
The Lithium Megaboom
We're witnessing an explosion in global demand for Lithium, and supply isn't even close to keeping up. That's why Lithium spot prices have nearly tripled since 2015.
The price per metric ton in Chinese spot markets is up from $6,500 to over $20,000.
Lithium's wild ride is just beginning. Demand for the metal is set to soar in coming years, and we believe that represents a massive investor opportunity.
The global battery market is set to hit $120 billion in less than two years.
Electric car production is expected to increase more than thirtyfold by 2030, hitting 24.4 million in annual vehicle sales - up from under 1 million today.
The Tesla (NASDAQ:TSLA) 70kWh Model S battery pack contains 63Kg of lithium, equivalent to the amount of lithium in 10,000 cellphones.
The problem? Production capacity is now at a critical juncture. Unfortunately, recovery of Lithium from brine deposits is a painfully slow process.
Traditional solar evaporation technology is an extremely time-intensive process, with a lengthy production cycle that can exceed 18 months.
It takes a minimum of 4 years for an average Lithium brine mine to come online-- and another 3-4 years to reach full capacity.
The total investment in new mines will likely range from $350 billion to $750 billion, according to analysts at researcher Sanford C. Bernstein & Co.
Even that won't bring enough capacity online.
Lithium is currently produced through a grueling 18-24-month solar evaporation process that entails slowly extracting all other elements from the brine until only lithium remains. The biggest problem with this reality is that the expansion of plants to produce more lithium will be painfully slow and require construction of thousands of acres of new evaporation ponds.
Globally, demand for lithium is skyrocketing. With battery demand forecast to rise 7.7 percent to $120 billion already in 2019, this is a market on the move.
What the world needs right now is plentiful supply of high-grade lithium to power that growth, and it won't wait 12-24 months for evaporating ponds.
With electric vehicles rapidly soaring in popularity, the lithium battery market could be at $46 billion by 2022.