By Kishori Krishnan Exclusive To Lithium Investing News

One more player has joined the lithium club.  Canaccord Adams, an international independent financial services firm that draws focus on potential global investment opportunities in metals, mining, energy among other fields, has now decided to initiate coverage on a group of small lithium exploration plays.

The spotlight has been turned on lithium after investments in the rare metal have shown a steady northward movement, even in these adverse times.

Even before the economic recession hit the world, the demand for lithium grew by 7.2 per cent every year between 2001-08.

Canaccord Adams, the international capital markets division of Canaccord Capital Inc,  has decided to jump in. The report of the firm’s interest in lithium exploration appeared in the Financial Post.

Analyst Eric Zaunscherb had picked out Canada Lithium Corp, Lithium One Inc, and Western Lithium Corp, calling each one a “speculative buy.”

According to Canaccord, these three juniors met its criteria for potential investors getting exposure through one senior producer and a basket of junior explorers and developers.

All three fit well into Canaccord’s philosophy of the junior players either having good projects that allow them to force their way into the lithium “club,” or be advanced enough to get into production rapidly.

Lithium fires

Even as lithium’s power grows, offering a new tool in the hunt for planets beyond our solar system, plans are already afoot to addresses the issue of lithium battery fires.

In a bid to prevent lithium batteries from exploding, a common occurence these days, news wire Reuters on November 11 reported that a new invention to prevent lithium-ion batteries from exploding in laptops and mobile phones is bound to hit the market soon.

This could happen as early as the first quarter of 2010, the report said.

The invention is called Stoba has been developed by the Industrial Technology Research Institute (ITRI), Taiwan’s national research organization. The way Stoba works is simple – it sits between the positive and negative terminals of the battery. When the battery heats up to 130 degrees centigrade (266 degrees Fahrenheit), Stoba transforms from a porous material to a film and shuts down the reaction that otherwise could lead to internal short circuit and subsequent fire.

“We have introduced a totally new material in the battery,” said Alex Peng, the senior researcher who led a team that developed the new material, over four years.

The danger of exploding lithium batteries is so great that last month the US Transportation Department issued a “hazardous materials” notice.

Peng said battery makers in Taiwan are in the testing stage and have ramped up manufacturing of Stoba-equipped cells by the thousands.

Deal scrapped

Things have not materalized between Western Lithium Canada Corporation (CVE: WLC) and Rocky Mountain Resources Corp (CVE: RKY). The duo have decided to terminate their planned C$ 9.1 million merger, announced late October 2009.

Western Lithium is developing its Nevada lithium deposit to support the new generation of hybrid and electric vehicles With one of the world’s largest known deposits of lithium, the company is ideally positioned to enter the market as a major long term supplier of high quality lithium carbonate.

Western Lithium was to acquire all of the outstanding shares of Rocky Mountain. Though no details were available as to the exact reasons, questions are being raised as to why the deal got scuppered.

Since 2007, Rocky Mountain’s share price has climbed from around C$ 1.00 per share to a peak of $ 2.50 earlier this year.

Though mainstream commodities like gold, copper, nickel, oil and platinum enjoyed strong runs up until early 2008, they have lost over 50-75 per cent in their share price since. Not so for molybdenum, vanadium, tungsten, chromium and some other ‘minor metals’.

All the four are used to enhance the characteristics of steel. And Rocky Mountain is one of a handful of listed companies where vanadium production is an ambition.

Western Lithium, on the other hand, is positioning itself as a major US-based supplier to support the rising global demand for lithium carbonate, that is expected from the increased use of mobile electronics and hybrid/electric vehicles.

Since vanadium has the potential to become an important element for future battery chemistries together with lithium-ion chemistries, the deal could have been a win-win for both.

So, what exactly went wrong?

Company news

Perhaps in tune with Canaccord Adams to track Canada Lithium Corp as  a future lithium production company with potential, the latter has initiated a pre-feasibility study on its Quebec Lithium Project near Val d’Or, Quebec.

The company said if on-going environmental, engineering, metallurgical, and geological studies were positive, the project could provide a secure North American supply of lithium. to feed the growing demand for lithium in hybrids and electric vehicles.

Mine construction is expected to begin in 2011.

Canada Lithium also said it had relinquished its interest in the Nevada brines joint venture with Gold Summit Corporation (TSXV: GSM) to focus exclusively on the Quebec Lithium Project.

Canada Lithium held a 75 per cent interest while Gold Summit held the remaining 25 per cent.

A123 Systems Inc, one of the world’s leading suppliers of high-power lithium ion batteries using the patented Nanophosphatetechnology that was founded in 2001, has released its third quarter 2009 results ending September 30, on November 9.

The company has completed its initial public offering, which raised $391 million in net proceeds. The firm has also been selected for a $249 million grant by the US Department of Energy, which was one of the largest grants awarded by the DOE to manufacturers of advanced batteries and battery systems.

A123 Systems disclosed that total revenue for the third quarter was $23.6 million, an increase compared to $22.9 million over the same period last year. For the nine months ending September 30, 2009, A123 Systems reported total revenue of $66.5 million, an increase of 48 per cent compared to the same period in 2008. Net loss was $22.8 million, or $1.78 per share.

Galaxy Resources (GXY) which is into exploration and development projects covering a range of commodities with a focus on tantalum/lithium, base metals, gold, iron ore, rare earth and uranium, has secured mining approval from the Department of Mines and Petroleum o commence mining at the Mt Cattlin Spodumene Project, Ravensthorpe, in Western Australia.

Most GXY’s projects are located in Western Australia.