The Best Lithium Companies for 2017… and Beyond
Tesla Motors Inc (NASDAQ:TSLA) is building a $5.0-billion “Gigafactory” in Nevada to make lithium-ion battery packs for its current production line of cars, its newly announced “Model 3” sedan, and its “Tesla Energy” product line. To meet the company’s voracious demand for lithium, it would essentially need to corner the market on the entire world’s lithium-ion production. But Tesla isn’t an island and, unfortunately, it needs to compete with every other industry (e.g. medical, electronics, ceramic, aluminum, and cement) and every other company that uses lithium technology. Over the next few years, demand for lithium is going to soar… and these three top lithium companies could be the big winners.
Lithium Technology: The 21st Century Gold Rush
Unlike gold, which is one of the heaviest metals, lithium (Li), as you’ll recall from the periodic table in high-school chemistry (hydrogen, helium, lithium!), is the lightest metal on earth.
Also unlike gold, lithium is plentiful. Unfortunately, lithium deposits are in remote areas that are hard to access. And because of the challenging geography, it is difficult to mine. But necessity is the mother of invention, so businesses will find a way to get what it needs.
The problem is, the demand for lithium is finally about to skyrocket. I say finally because Tesla’s Gigafactory is going to begin cell production in 2017. By 2020, the Gigafactory will reach full capacity (unlike the U.S. economy). To meet its target of 500,000 cars annually, Tesla will need to, according to Musk, “absorb the entire world’s lithium-ion production.” (Source: “Tesla Shakes Up Market for Lithium, Other Metals,” The Wall Street Journal, May 5, 2016.)
But Tesla’s lithium technology will have some competition. By 2020, the same year Tesla wants to be at full capacity, it is expected that China will build twice as many new lithium-ion batteries as the United States. In fact, Tesla’s ballyhooed Gigafactory is only one of at least 12 such projects—seven of which are in China—are currently under construction around the world. (Source: “Graphite Demand from Lithium Ion Batteries to More Than Treble in 4 Years,” Benchmark Mineral Intelligence, May 4, 2016.)
This might be why Goldman Sachs Group Inc suggests that demand for lithium could triple by 2025 to 570,000 tons per year. And why lithium and other raw materials could be the new gold for the 21st century. Except lithium isn’t a hedge against economic uncertainty. Quite the opposite.
In the meantime, it looks as though 2017 is going to be the year that lithium prices start to sprint down the runway. And by 2020, the prices of lithium mining stocks could be soaring.
Below is a list of three top lithium companies to watch in 2017.
3 Top Lithium Companies for 2017
There are three major lithium mining companies which most investors are aware of: Sociedad Quimica y Minera de Chile (ADR) (NYSE:SQM), Albemarle Corporation (NYSE:ALB), and FMC Corp (NYSE:FMC).
All three have made serious moves in 2016: Sociedad Quimica y Minera de Chile is up 35% year-to-date near $25.00 per share; FMC Corp’s share price has increased 26% to around $47.55; while Albermarle’s share price has advanced 50% since the start of 2016 to $81.50 per share.
Read More: List of Major Lithium Mining Companies
There is every reason to think that this momentum will continue into 2017 and beyond.
But there are a lot of other lithium mining stocks out there for investors to consider. Lithium mining stocks with more attractive entry positions could provide investors with even greater gains in 2017 and beyond.
List of Major Lithium Mining Companies
LiTHIUM X Energy Corp
LiTHIUM X Energy Corp (CVE:LIX): LiTHIUM X is a lithium exploration mining company with two projects: Sal de Los Angeles in Argentina, and Clayton Valley, Nevada. (Source: “Projects,” LiTHIUM X Energy Corp, last accessed August 20, 2016.)
Its 8,156-hectare Sal de los Angeles project is situated in the prolific “Lithium Triangle” in Salta Province, Argentina.
The company also has the largest land package in Clayton Valley, Nevada, covering over 15,040 acres. The two parcels are next to the only producing lithium operation in North America: “Silver Peak,” owned and operated by Albemarle.
Since the LiTHIUM’s stock launched in November 2015, it has been one of the top performers on the Toronto Stock Exchange (TSX). Since the start of the year, LiTHIUM’s share price has soared 365%.
On July 28, LiTHIUM announced that it had started the “Phase 1” exploration program at its Clayton Valley North Lithium Project. Following initial results, Lithium X may add a third drill site. (Source: “Lithium X to Commence Drilling at Clayton Valley North, Nevada,” LiTHIUM X Energy Corp, July 28, 2016.)
LiTHIUM may only be a development-stage company, but it has great potential. And positive results from the Clayton Valley drill sites could enable a resource estimate for the project, which would put the company on Wall Street’s radar.
Orocobre Ltd (TSE:ORL): Based in Brisbane, Australia, Orocobre is a lithium mining company with two revenue-generating operations (“Salar de Olaroz Lithium Facility” and “Borax Argentina”) and three other operations in various stages of development.
The company has built the first large-scale, de-novo-brine-based lithium facility in Argentina’s Lithium Triangle in over 20 years—at its flagship Salar de Olaroz resource.
The Olaroz Lithium Facility began as a joint venture project built in partnership with Japanese trading giant Toyota Tsusho Corp and the mining investment company owned by the provincial government of Jujuy: Jujuy Energia y Mineria Sociedad del Estado. (Source: “Salar de Olaroz Lithium Facility,” Orocobre, last accessed August 20, 2016.)
The operation consists of 63,000 hectares of tenements over a salt lake that contains high values of lithium and potash in brine. The property has measured and indicated resources equivalent to 6.4 million tonnes of lithium carbonate.
Orocobre’s share price has been bullish in 2016; up 72% year-to-date and 160% year-over-year.
In July, Orocrobre announced its financial results for the quarter ended June 30, 2016. During the June quarter, the company produced 2,971 tonnes of lithium carbonate, a 640-tonne increase—or 27% over the previous quarter—and in line with expectations. Production for the third quarter is forecast to be between 3,300 and 3,600 tonnes. (Source: “Quarterly Report of Operations for the Period Ended June 30, 2016,” Orocobre, July 19, 2016.)
Bacanora Minerals Ltd.
Bacanora Minerals Ltd (CVE:BCN): Bacanora Minerals Ltd, a development-stage company, explores for and develops industrial mineral projects, with a primary focus of becoming a large-scale producer of batter-grade lithium carbonate.
Its primary assets include the “Sonora Lithium” project, which consists of 10 contiguous mining concessions, covering approximately 104,064 hectares in the northeast Mexican state of Sonora; and the “Magdalena Borate” project that cover 16,503 hectares in Sonora state. (Source: “Sonora Lithium,” Bacanora Minerals, last accessed August 20, 2016.)
With an “indicated mineral resource” estimate of 4.5 million tonnes of lithium carbonate equivalent and an “inferred mineral resource” of 2.7 tonnes of lithium carbonate equivalent, Sonora is regarded as one of the world’s larger-known clay lithium deposits.
A mining feasibility study has been completed and suggests that the company could produce up to 35,000 tonnes annually of battery-grade lithium cobalt.
The company also owns the “Magdalena Borates” project, also in Mexico, which has the potential to provide near-term cash flow to the company as it advances its lithium assets. (Source: “Magdalena Borate,” Bacanora Minerals, last accessed August 20, 2016.)
The Bottom Line on Lithium Technology
Lithium truly is the new gasoline. With the boom in lithium technology, demand for this wonder commodity is poised to shoot through the roof. Early investors in the top lithium companies and the best lithium stocks could make a fortune.
All of the lithium stocks in this report will do well in such a scenario… but they’re not the only lithium companies poised to do well. Our top tech analyst just released a new report outlining his No. 1 lithium play, which he believes could deliver triple-digit gains for early investors. Click here now to get all the details.