Updated: Sep 8
We Want Lithium to be Sizable by 2030; what if it needs to be there by 2025?
It's labor day 2021. While we are roasting all those things on the grill you have been wondering about Lithium. How do I know? You are reading a Lithium article again. Hey, I'm writing a Lithium article on Labor day so no judging here.
The news has been incredible in just the last few weeks. Even GOEV is trying to start production. Ford keeps pushing up numbers with the Mach-E seeing high sales on both sides of the Atlantic; while the F-150 Lightning is wowing people. Tesla is moving product as expected and Nissan is giving a facelift to their offering.
If trends continue we may have a problem. For Lithium stocks that is fine I guess, but the industry needs Lithium. This is the frustrating part of the Lithium Hydroxide vs Lithium Carbonate debate. Companies will require more lithium product to build batteries. This will force the changes in the company capabilities.
Take a look at the Lithium Americas Thacker's Pass project. That project is waiting for a judge to decide it's future. Once that is done, the actual production timeline will seem instant. These projects and others like them will produce battery quality spodumene. Unfortunately, this will not be enough if the market moves faster than a decade.
Piedmont Lithium has finally presented its mining plan to the Gaston County Commission. This is time. Again, it will produce spodumene, but again it really doesn't move that needle much.
The legal challenges to new Lithium projects drive up capital requirements and push out the date of production even further into the future.
That's hard rock, solar evaporation projects are limited to very dry climates and a new pond is months from evaporating enough to produce product is 8 or more months. This is more responsive, but again not as reactive.
This gets us to the new kid, direct lithium extraction. (DLE). There is really only one that does this and that is Standard Lithium (SLI). A word of caution here, no two brines are the same. South Arkansas brine is different than the 'hot brine' in California and Germany. All of them are different from the Bolivian brine. Each one is a different chemistry or in hot brine terms a different technical solution. That being said, once the chemistry or technical issues are handled it becomes an issue of scaling.
SLI merely needs to increase capacity of flow from the brine below. To circle back for a moment, DLE produces Lithium Carbonate, therefore it can be converted to Lithium Hydroxide.
Maybe that will be a big boom industry. A lithium hydroxide conversion plant in Arkansas or Bolivia.
Where I am going? If the market demands more EV's, the cutover will be faster. The current capacity is driving the value of Lithium through the roof, but this will cause further innovation in sodium ion batteries and potassium ion batteries. It will create a world that really looks at the iron oxide batteries. Right now, these don't hold the energy density.
This could cause a blowback. There is the one thing that can save Lithium in these situations, and that is DLE. DLE can expand. This makes companies like SLI in a very enviable situation.
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