Remarkable growth in the Lithium-Ion battery market will see the sector surpass $53 billion by 2024, according to new research. The 2017 report put out by Global Markets Insights highlighted the Lithium Ion Battery market’s growth from USD $23 billion in 2015, at a rate of over 9% CAGR to blow past the $53 billion mark by 2024.
The influx in demand for lithium has made its positive impact across the lithium market, especially for lithium companies such as NRG Metals Inc. (TSX.V: NGZ) (OTC: NRGMF), Albemarle (NYSE: ALB), Sociedad Quimica y Minera de Chile (NYSE: SQM), FMC Lithium (NYSE: FMC), and Lithium X Energy Corp. (TSX.V: LIX) (OTC: LIXXF).
With the prevalence of Lithium-ion batteries in use across all types of consumer goods around the world, it’s becoming safer each year to say that the lithium boom is going to sustain for quite a while. Popular items such as laptops, smartphones, portable audio and video equipment, as well as several toys, are being made with the Li-Ion battery powering them from the heart. But most recently, the boom has also come from the roads, as institutional pushes have been effectively pushing consumers towards the booming Electric Vehicle (EV) market.
"You’ve got a scramble for deposits, a demand side that looks very impressive, the question is always around the supply," said Paul Gait, an analyst at Sanford C. Bernstein Ltd. in London recently told Bloomberg.
The struggle for supplies to keep up with demand is a very real concern. According to the US Geological Survey, global lithium production increased approximately 12% last year, with the Lithium-ion battery market consuming approximately 39% of it. However, suppliers aren’t asleep at the wheel.
Among the potential suppliers pushing to meet that growing demand, one of the most aggressive is currently NRG Metals Inc. (TSX: NGZ) (OTCMKTS: NRGMF). NRG Metals is ambitiously targeting and developing a potentially massive South American lithium brine project, directly near the majors.
Other lithium companies that have seen their share prices rising with the tide of demand include giants Albemarle (NYSE: ALB), FMC Lithium (NYSE: FMC) and Sociedad Quimica y Minera de Chile (NYSE: SQM), along with Lithium X Energy Corp. (TSX.V: LIX) (OTC: LIXXF), a junior company with lithium projects in Argentina and Nevada’s Clayton Valley.
CONTINUED GROWTH FOR THE FORESEEABLE FUTURE
Adoption of lithium-ion as the primary battery type is still increasing, as ionized lithium has demonstrably higher stability and heat resistance properties. The result of these beneficial properties is a much lowered risk of explosion or equipment damage, and further compliments the electronics industry’s favourability towards this type of battery.
Coupling in faster recharge efficiency, compared to other available alternatives, and truly the lithium-ion battery has become the undisputed darling of the consumer electronics world.
And governments have also had their hand in pushing lithium-ion battery demand to new heights. By writing favourable regulations, and by piling on subsidies and tax rebates, governments across the developed world have effectively fostered significant growth in the adoption of plug-in hybrid electric vehicles (PHEVs).
The push hasn’t just come on the roads, either. Homes and general infrastructure have been improved with the lithium-ion boom, as the renewable and grid storage applications of the technology are expected to surpass the USD $12 billion mark by 2024.
Europe in particular has seen a major drive towards adoption, with an increase in infrastructure required for renewable energy storage also propelling the lithium-ion battery market size. In particular, Germany saw its annual electricity demand from renewable energy sources grow to 30% of the country’s total output in 2015.
So while this is great news for manufacturers and developers of lithium-ion power cells, and for consumers as well, concerns about the supply of the raw materials required to make them is entirely justified. The pressure is duly being put onto the suppliers of lithium to square up the demand gap.
NRG METALS SEIZING ON THE OPPORTUNITY
Today’s lithium supplies primarily are coming from two places—Australia and South America. Australian lithium is mostly produced from traditional hard rock mining, whereas the South American producers are extracting their lithium supplies from brines.
Australian production is currently higher, however, bulk of the future’s lithium production will be coming from South America’s “Lithium Triangle”, which undoubtedly holds a considerably higher amount of lithium reserves.
So when Chinese high-purity lithium manufacturer Chengdu Chemphys Chemical Industry Co., Ltd (“Chemphys”) sought out a strategic alliance to secure a significant supply for its future lithium needs, it put its faith in NRG Metals and the massive potential of its Argentinian assets.
How much faith did Chemphys put in to NRG’s project? For starters, over CAD $1.215 million in the first tranche.
The funds will be directed towards the exploration and development of NRG’s Hombre Muerto North Lithium Project (“HMN Project”), which is one of two major projects the company is working on in the region.
“We are very pleased with the investment in NRG by Chemphys and establishing a relationship with a high purity lithium manufacturer in China that supplies its products to the battery and energy markets,” said Adrian Hobkirk, President and CEO of NRG Metals upon the announcement of the latest fundraising.
“With the completion of this private placement, and the financial support of warrant and option holders, the Company is now fully funded to carry out its planned work program on the HMN Project.”
NRG has strategically set up camp in Argentina’s prolific Puna Region, considered to be one of the country’s most productive.
Along side the HMN Project is NRG’s other lithium project, the Salar Escondido. NRG is also putting significant effort into Salar Escondido, which the company is currently drilling in order to further establish what NRG’s management team believes is a very large brine type of lithium deposit. Results on this project are being released quite frequently.
But it’s the HMN Project that’s likely going to get the most attention for NRG, now that Chemphys has helped to truly ramp things up, ahead of the attached Lithium Offtake Sales Agreement embedded in the alliance.
The HMN Project is in a valuable real estate district, especially as it shares the same basin with FMC’s Ltihium Fenix Mine, that has already produced lithium over the past two decades. And even Australian explorers Galaxy Resources are directly adjacent with their Sal de Vida Project, previously rated as the best undeveloped lithium in the region.
So for NRG Metals as it moves forward, it is now appropriately cashed up to carry forward the HMN Project with its generous Chinese partners, all while still holding a very high-potential wildcard in the Salar Escondido for even more blue sky to look forward to.
The company is a textbook example of the type of outfits that stand to benefit as the world opens up for current and near-term lithium producers for the prime lithium boom years ahead.
In order for the lithium demand gap to be appropriately met, the most likely producers, especially those with the most room to grow in South America, will have to carry the torch for the world. NRG Metals is in a position to be noteworthy thanks to its recent developments on its swiftly progressing lithium projects.
POTENTIAL COMPARABLES
Albemarle (NYSE: ALB)
Albemarle Corporation globally develops, manufactures, and markets engineered specialty chemicals. The company offers lithium compounds, including lithium carbonate, lithium hydroxide, lithium chloride, and lithium specialties and reagents for applications in lithium batteries, high performance greases, thermoplastic elastomers for car tires, rubber soles and plastic bottles, catalysts for chemical reactions, organic synthesis processes, life science, pharmaceutical, and other markets; cesium products for the chemical and pharmaceutical industries; and zirconium, barium, and titanium products for pyrotechnical applications. Albemarle Corporation was founded in 1994 and is based in Charlotte, North Carolina.
FMC Lithium (NYSE: FMC)
FMC Lithium is a subsidiary of the FMC Corporation, which is a diversified chemical company, that provides solutions, applications, and products for the global agricultural, consumer, and industrial markets. FMC Lithium offers lithium for use in batteries, polymers, pharmaceuticals, greases and lubricants, glass and ceramics, and other industrial uses. FMC Corporation was founded in 1884 and is headquartered in Philadelphia, Pennsylvania.
Lithium X Energy Corp. (TSX.V: LIX) (OTC: LIXXF)
Lithium X Energy Corp., is a resource company operating as a lithium explorer and developer in Argentina and the United States. The company owns a 50% interest in the Sal de los Angeles project comprising 8,156 hectares located in Salta Province, Argentina. It also owns a 100% interest in the Clayton Valley South project consisting of 477 federal placer mining claims covering approximately 9,540 acres located to the southwest of Tonopah, Nevada; and holds an option to acquire a 100% interest in the NSP Lithium claims covering approximately 5,480 acres located in northern Clayton Valley, Nevada. The company was formerly known as Royce Resources Corp. and changed its name to Lithium X Energy Corp. in November 2015. Lithium X Energy Corp. was founded in 1997 and is headquartered in Vancouver, Canada.
Sociedad Quimica y Minera de Chile (NYSE: SQM)
Sociedad Quimica y Minera de Chile S.A., is a producer of potassium nitrate and iodine. The Company produces specialty plant nutrients, iodine derivatives, lithium and its derivatives, potassium chloride, potassium sulfate and certain industrial chemicals. Its segments include specialty plant nutrients, industrial chemicals, iodine and derivatives, lithium and derivatives, potassium, and other products and services Lithium and its derivatives are used in batteries, greases and frits for production of ceramics. Potassium chloride is a commodity fertilizer that is produced and sold by the Company across the world.
For a more in-depth look into NGZ you can view the in-depth report at American News Group: http://usanewsgroup.com/2017/11/19/junior_lithium_players_are_soaring-2/
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