Long-term horizon, Growth, momentum, Deep Value


Demand for lithium based products continue to increase in both existing and new applications.

Review of the public players in the lithium oligopoly.

A new pure play junior lithium focused mining company enters the group.

Since Sony Corp. (NYSE:SNE) launched their lithium battery in the early 1990s the world has moved towards an increasingly mobile society where consumer electronics have dominated the consumer markets. Everything from laptops, tablet PCs, mobile and smartphone, digital cameras and many other consumer electronics have benefited from the rapid advancements in the lithium battery.

In one way or another, lithium battery technologies have already dramatically impacted nearly every individual’s life. The greatest opportunities for lithium to benefit society is in the mass adaption of electric vehicles and stationary energy storage systems.

It is my personal opinion that every investor should have either a direct or indirect exposure to lithium batteries. Investment options include less than a handful of key lithium suppliers with some being publicly traded on global stock exchanges, recently established specialty ETFs such as the Lithium Global X Fund (LIT) and various battery technology companies. For investors who are generalist the Lithium Global X Fund can provide direct exposure to the entire supply chain while active investors should focus on companies who are actively producing lithium carbonate. Junior exploration companies are not of interest as new salt ponds take around a decade to bring online while batteries have already been commoditized making battery manufactures less appealing. Therefore, in my opinion a lithium ETF and existing lithium producers could be of interest to investors.

Demand for lithium products has taken flight

Today, lithium batteries are now in demand more so than ever due to an increase in the number of consumer products that have integrated the technology. For example, low cost mobile phones are being widely deployed in third world and developing parts of the world. Next, the number of product applications which utilize lithium batteries are increasing and the amount of lithium per device is increasing. A mobile phone, camera, laptop or tablet require a small amount of lithium carbonate while an electric vehicle requires a significant amount of the white metal. Stationary energy storage systems are also gaining significant traction, primarily in mature solar PV markets such as Hawaii, Germany, California, and Japan. Companies such as Tesla Energy (NASDAY:TSLA) have already constructed a massive 52MW battery power plant which consumes approximately the same storage capacity as 1,000 full electric vehicles. This is just the beginning as Tesla Energy has announced plans to construct a 100MW battery power plant in Australia which would be the largest in the world.