Lithium Boom: The Rush For White Petroleum

May 18, 2016 | By Business Wire News

LONDON

Tesla is supercharging the market for electric vehicles, forcing other automakers to rush to beat Elon Musk to the market.

The manufacturing boom for EVs is sparking a staking rush for lithium, the key element that is critical to all the batteries needed for the EV renaissance. But with few lithium miners in the market, lithium prices are shooting through the roof, tripling from $7,000 to $20,000 per ton over the past year.

The interesting thing about the unfolding lithium boom is that while lithium is plentiful, quality reserves are located in only a handful of places – China, Argentina, Chile and Australia, for example. But one other place where lithium production is set to ramp up quickly is Nevada, which, as it happens, means a lot of lithium production may take place not too far from the Tesla Gigafactory.

The rush for so-called “white petroleum” is an investors dream, but there are precious few publicly-listed companies to invest in. One lithium explorer situated near the Tesla Gigafactory is Nevada Energy Metals.

Nevada Energy Metals made news on May 13 when it announced that it had acquired lithium brine exploration assets in Black Rock Desert, 177 kilometers north of Reno. It also has two highly prospective properties in and near the lithium-rich region of the Clayton Valley. And in a sign of the company’s progress, a day earlier the lithium explorer announced that it has begun the process to have its ticker upgraded to the OTCQB Venture Market. It has other lithium brine targets on its acquisition list, both in Nevada and elsewhere.

Nevada Energy Metals has raised $1 million and is looking to advance these projects. It is also located near several other lithium explorers, including Dajin Resources and Lithium X. With several companies in geographical proximity, their work tends to de-risk the assets of the other, all working to prove the viability of the region as a whole.

It is early days, but the lithium sector appears on the verge of dramatic growth. Lithium supply is tight, demand for EVs set to rapidly climb over the next decade, and there are just a handful of companies that have astutely positioned themselves at the front end of the boom.

By James Burgess of Oilprice.com